Finding 964668 (2023-002)

Criteria: When a non-federal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: During our audit of the Coronavirus State and Local Fiscal Recovery Funds, we noted that internal controls related to compliance with federal requirements over procurement, and suspension and debarment could be enhanced. It was noted that there were no policies and procedures to ensure that an entity the Town entered into a transaction with is not suspended or debarred. Cause: The Town has not drafted policies and procedures to ensure vendors are not suspended or debarred. Effect: The Town is at a greater risk of using a vendor that is suspended or debarred which would put the Town at risk of noncompliance with program requirements. Recommendation: We recommend that the Town include in its policies and procedures additional procedures for the Town to verify vendors within the System for Award Management (SAM) Exclusions prior to engaging in a contract that is expected to equal or exceed $25,000. In addition, we recommend that the Town check the SAM Exclusions at least bi-annually for all vendors exceeding the threshold to ensure that no federal funds have been paid to excluded parties.