Finding Text
Information on the
Federal Program: Federal Agency: U.S. Department of Transportation
Program Name: Formula Grants for Rural Areas and Tribal Transit Program
AL: 20.509;
Federal Award Identification Number: 04-96-96-964010-2916-072-500575 Federal Award Year: Year Ended June 30, 2023
Specific Requirement: Required by 2 CFR, Part 200 for federally funded programs, when an institution enters into a covered transaction with an entity or individual, an institution must verify that the vendor or employee is not suspended or debarred or otherwise excluded from participating in federal programs. Generally, a covered transaction is a transaction expected to equal or exceed $25,000 and be funded with federal dollars. This verification may be accomplished by checking the System for Award Management (SAM), formerly the Excluded Parties List System, maintained by the General Services Administration, collecting a certification from the vendor, or by adding a clause or condition to the covered transaction.
Condition Found: In response to finding 2022-001, the Association reviewed SAM for vendors when they reached the covered threshold. During our audit, we noted the Association only reviewed the SAM for vendors when they reached the covered threshold rather than when they started being paid under the grant. The Association is at risk of paying a vendor that has been suspended or debarred because the check is not performed until they reach a specific threshold.
Context: Based on our testing, we noted that of the 6 vendors selected for tested, while they were checked against the SAM listing, this review was not performed until after the reached the covered threshold of $25,000.
Questioned Costs: None.
Cause and Effect: The Association was unaware of the risk associated with the payments to vendors leading up to the $25,000 threshold. The Association could identify a vendor that has been suspended or debarred from a federal program after they have already reached the $25,000 and been paid under through the specific grant. The Association could also miss a vendor due to human error when reviewing the payments to vendors on a quarterly basis vendors are only checked once they have been identified through the manual process of reviewing for payments to vendors over $25,000.
Identification as a
Repeat Finding,
if Applicable: Yes, 2022-001.
Recommendation: We recommend the Association implement a process to compare all vendors paid under federal grants to the SAM at least annually. The Association should maintain documentation that the comparison has been performed.
Views of a Responsible
Official and Corrective
Action Plan: Management agrees with the finding and the recommendation. See Corrective Action Plan on page 40.