CITY OF TALLMADGELocal Government

2 CFR 180 - Procurement, Suspension, Debarment Finding Number: 2021-001 Assistance Listing Number and Title: AL # 20.205 Highway Planning and Construction Cluster Federal Award Identification Number / Year: 2021 Federal Agency: U.S. Department of Transportation Compliance Requirement: Procurement, Suspension, Debarment Pass-Through Entity: Ohio Department of Transportation Repeat Finding from Prior Audit? No 2 CFR 180.305 states that Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred or whose principals are suspended or debarred, unless the Federal agency responsible for the transaction grants an exception under 2 CFR ? 180.135. ?Covered transactions? include nonprocurement or procurement transactions at the primary tier, between a Federal agency and a person; or at the lower tier, between a participant in a covered transaction and another person. Procurement contracts for goods and services awarded under a nonprocurement transaction (e.g., grant or cooperative agreement) are covered transactions if the contracts are expected to equal or exceed $25,000 or meet certain other specified criteria outlined in 2 CFR ? 180.220s. All nonprocurement transactions (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless listed in the exemptions in 2 CFR ? 180.215. 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 is not suspended or debarred or otherwise excluded. This verification may be accomplished by checking SAM exclusions (https://sam.gov/SAM/pages/public/searchRecords/advancedEMRSearch.jsf);, collecting a certification from the entity, or adding a clause or condition to the covered transactions with that entity. The City's Uniform Guidance Procedures state, in part, in accordance with 2 C.F.R. ? 180.200, for contracts over $25,000, the City shall confirm that the vendor is not debarred or suspended by either checking the federal government's System for Award Management; collecting a certification from the vendor; or adding a clause or condition to the covered transaction with the vendor. The City did not have the proper internal controls in place to verify that all entities, with whom the City had entered into covered transactions, had not been suspended or debarred. During testing of on-behalf contract disbursements for the Highway Planning and Construction Cluster, we noted instances in which the program had payments to a vendor of more than $25,000 and there was no evidence the City checked the SAM exclusions, collected a certification from the entity, or added a clause or condition to the covered transaction with the vendor. Due to the deficient internal control structure, the required verifications were not completed for the covered transactions in the Highway Planning and Construction Cluster during Fiscal Year 2021. Failing to have the appropriate controls in place may result in vendors receiving federal funds that are suspended or debarred. Prior to contracting with vendors that will be paid with federal funds, the City should verify the vendor is not suspended or debarred by checking the SAM exclusions, collecting a certification from the vendor, or adding a clause or condition to the covered transaction with the vendor. Officials? Response: See Corrective Action Plan