Town of Foster, Rhode IslandLocal Government

Criteria - When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal 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. “Covered transactions” include those procurement contracts for goods and services awarded under non-procurement transaction (e.g. grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR Section 180.220. This requirement applies to contracts entered into to procure goods and services with Coronavirus State and Local Fiscal Recovery Funds. Condition - The Town of Foster has a specific procedure in place for verifying that an entity with which it plans to enter into a covered transaction is not suspended, debarred or otherwise excluded. The procedure includes maintaining on file documentation to support that the verification was performed by accessing the System of Award (SAM.gov) website and confirming that the vendor is not suspended or debarred. For three of the five transactions selected for testing that were subject to the suspension and debarment requirements, the Town did not have documentation to support that the verification procedures were performed prior to entering into the transactions. Cause – The Town did not implement the procedure that includes maintaining documentation on file until April 2025. The transactions noted above were incurred prior to April 2025. Effect – Contracts for goods and service that were “covered transactions” were entered into prior to verifying that an entity was not suspended, debarred or otherwise excluded. Questioned Costs – None Recommendation- We recommend that the Town maintain documentation on file to support that the verification procedures were performed to ensure that an entity with which it plans to enter into a covered transaction is not suspended, debarred or otherwise excluded. Auditee’s Views/Corrective Action - Upon identification of the issue, the Town reviewed its existing vendor procurement and vetting policy. The contracts identified in this finding existed prior to the implementation of controls designed for compliance with this policy. The Town has implemented corrective actions to formalize and document the verification process. Specifically, verification of suspension and debarment status is now documented through the System for Award Management (SAM.gov) prior to contract execution, and applicable staff have been trained on the requirements to ensure ongoing compliance.As part of its commitment to maintaining full compliance with federal procurement standards, the Town will further enhance these procedures by requiring all department heads to notify the Finance Department of any vendor proposed for use prior to making a purchase or entering into a contract. This additional control will ensure that the required suspension and debarment verification is completed and documented before any contractual commitment is made, thereby reducing the risk of similar occurrences in the future.

Criteria - When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal 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. “Covered transactions” include those procurement contracts for goods and services awarded under non-procurement transaction (e.g. grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR Section 180.220. This requirement applies to contracts entered into to procure goods and services with Coronavirus State and Local Fiscal Recovery Funds. Condition - The Town of Foster has a specific procedure in place for verifying that an entity with which it plans to enter into a covered transaction is not suspended, debarred or otherwise excluded. The procedure includes maintaining on file documentation to support that the verification was performed by accessing the System of Award (SAM.gov) website and confirming that the vendor is not suspended or debarred.Cause - The Town did not fully implement the procedure during the 2024 fiscal year.Effect – Contracts for goods and service that were “covered transactions” were entered into prior to verifying that an entity was not suspended, debarred or otherwise excluded.Questioned Costs – None Recommendation- We recommend that the Town maintain documentation on file to support that the verification procedures were performed to ensure that an entity with which it plans to enter into a covered transaction is not suspended, debarred or otherwise excluded.Auditee’s Views -Management acknowledges the finding regarding the lack of verification of suspension or debarment status prior to entering into covered transactions for goods and services. While procedure were in place, they were not consistently followed throughout the entire fiscal year. Upon identification of the issue, the Town implemented corrective actions during the fiscal year under audit, including establishing a formal procedure to verify the suspension and debarment status of all vendors involved in covered transactions. Verification is now documented through the System for Award Management (SAM.gov) prior to contract execution, and applicable staff have been trained to ensure ongoing compliance. Although these corrective actions were implemented within the fiscal year under audit, they were not in place early enough to apply to all applicable transactions for the entire year. The Town is committed to maintaining full compliance with federal procurement standards going forward.

Finding: 2023-001-Material Weakness Agency: U.S. Department of the Treasury Program: Coronavirus State and Local Fiscal Recovery Funds Federal Assistance Listing Number: 21.027 SUSPENSION AND DEBARMENT Criteria - When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal 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. “Covered transactions” include those procurement contracts for goods and services awarded under non-procurement transaction (e.g. grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR Section 180.220. This requirement applies to contracts entered into to procure goods and services with Coronavirus State and Local Fiscal Recovery Funds. Condition - The Town of Foster does not have a specific procedure in place for verifying that an entity with which it plans to enter into a covered transaction is not suspended, debarred or otherwise excluded. Cause - The Town has not established suspension and debarment policies and procedures for federal awards. Effect – Contracts for goods and service that were “covered transactions” were entered into prior to verifying that an entity was not suspended, debarred or otherwise excluded. Questioned Costs – None Identification of a Repeat Finding- This is a repeat finding from the previous audit 2022-001. Recommendation- We recommend that the Town implement verfication procedures to ensure that an entity with which it plans to enter into a covered transaction is not suspended, debarred or otherwise excluded. Auditee’s Views- Management implemented a Corrective Action Plan for all future contracts awarded. These procedures include adding the required contract language to all contracts and obtaining the professional’s certification that they are not suspended, debarred, or otherwise excluded from participating in the transaction at the time of contract award. In addition, prior to award, the entity confirms through the System for Award Management (SAM.gov) website that the contractor is not suspended, debarred, or otherwise excluded from participating in the transaction. This process was not implemented until late in the 2023 fiscal year.

Agency: U.S. Department of the Treasury Program: Coronavirus State and Local Fiscal Recovery Funds Federal Assistance Listing Number: 21.027 SUSPENSION AND DEBARMENT Criteria - When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal 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. ?Covered transactions? include those procurement contracts for goods and services awarded under non-procurement transaction (e.g. grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR Section 180.220. This requirement applies to contracts entered into to procure goods and services with Coronavirus State and Local Fiscal Recovery Funds. Condition - The Town of Foster does not have a specific procedure in place for verifying that an entity with which it plans to enter into a covered transaction is not suspended, debarred or otherwise excluded. Cause - The Town has not established suspension and debarment policies and procedures for federal awards. Effect ? Contracts for goods and service that were ?covered transactions? were entered into prior to verifying that an entity was not suspended, debarred or otherwise excluded. Questioned Costs ? None Recommendation- We recommend that the Town implement verfication procedures to ensure that an entity with which it plans to enter into a covered transaction is not suspended, debarred or otherwise excluded.

Finding: 2022-002-Significant Deficiency Agency: U.S. Department of the Treasury Program: Coronavirus State and Local Fiscal Recovery Funds Federal Assistance Listing Number: 21.027 Criteria ? All non-federal entities, other than States, must have and use documented procurement procedures, consistent with State, local and tribal laws and regulations for the acquisition of property or services under a federal award or subaward and must follow the procurement standards in 2 CFR sections 200.318 through 200.327. CFR Section 200.318 (i) states that the non-federal entity must maintain records sufficient to detail the history of the procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of the contract type, contractor selection or rejection, and the basis for the contract price. The Town of Foster has written procurement procedures that include sole source procurement. The procedure requires a determination in writing that there is only one source of the required supply, service or construction item as permitted by the RIGL 45-55-8. Condition- During our test controls of the internal control over compliance with procurement requirements per the Uniform Guidance, we selected a purchase that was not competitively bid as it was determined to be a sole source purchase. The Town did not document in writing the rationale for the method of procurement in compliance with CFR Section 200.318 (i) and the Town?s written procurement procedures. Cause ? The Town did not follow established procurement procedures for purchases identified as sole source. Effect ? The Town did not adhere to established procurement procedures for sole sources purchases and had no documentation to support the procurement method as sole source. Questioned Costs ? None Recommendation ? We recommend that the Town adhere to its established procurement procedures for all sole source purchases to ensure the proper documentation is maintained to support the procurement method as sole source.