CITY OF GREENWOODLocal Government

Subject: 2025-002 Material Weakness and Noncompliance – Procurement and Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness and Noncompliance – Procurement and Suspension and Debarment Criteria: In accordance with 2 CFR §200.214 and 2 CFR Part 180, the City is required to ensure that it does not enter into a covered transaction with a party that is suspended or debarred. Verification must be performed through one of the following: checking SAM.gov, collecting a certification, or adding a contract clause requiring compliance. Condition and Context: The City has a formalized procedure for verifying suspension and debarment status for covered transactions under the revenue loss category for the CSLFRF award but the verification process did not occur prior to payment of new vendors during 2025. All vendors paid through June 2025 were verified on June 26, 2025 and all vendors paid through December 31, 2025 were verified on January 26, 2026. Without advance verification, the City risks using federal funds to engage with ineligible vendors, which could result in questioned costs, repayment obligations to the federal government, or future audit findings that may impact continued federal funding. Cause and Effect: The City did not complete suspension and debarment verification prior to payment for each of the ten covered transactions tested, resulting in a material weakness of internal control over compliance and noncompliance with respect to the suspension and debarment requirements of the CSLFRF program and increased risk of using federal funds with ineligible vendors. This is a repeat finding of 2024-002. Recommendation: We recommend the City ensure suspension and debarment checks are performed on all CSLFRF transactions prior to payment to new vendors and documented appropriately. Views of Responsible Officials and Planned Corrective Actions: The City agrees with the recommendation and plans to implement a corrective action plan by December 31, 2026. City staff are in the process of updating internal policies to ensure the suspension and debarment checks are performed on all CSLFRF transactions prior to payment to vendors and documented appropriately.

Subject: 2024-002 Material Weakness – Procurement and Suspension and Debarment Noncompliance Federal Agency: Department of the Treasury Federal Program: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness – Procurement and Suspension and Debarment Noncompliance Criteria: In accordance with 2 CFR §200.214 and 2 CFR Part 180, the City is required to ensure that it does not enter into a covered transaction with a party that is suspended or debarred. Verification must be performed through one of the following: checking SAM.gov, collecting a certification, or adding a contract clause requiring compliance. Federal Award Findings and Questioned Costs (Continued) Condition and Context: The City lacked a formalized procedure for verifying suspension and debarment status for 1 covered transaction under revenue loss category for the CSLFRF award. This covered transaction paid for additional costs added onto the purchase of a fire engine with a change order related to increased manufacturing costs incurred as a result of the Coronavirus pandemic. The City did not verify suspension and debarment on this vendor prior to paying for these costs under CSLFRF. Without proper verification, the City risks using federal funds to engage with ineligible vendors, which could result in questioned costs, repayment obligations to the federal government, or future audit findings that may impact continued federal funding. Although no suspended or debarred vendors were identified in the sampled transactions, the lack of internal controls and documentation constitutes material noncompliance with 2 CFR §200.214. Cause and Effect: The City did not establish formal procedures on suspension and debarment requirements for one of the eleven covered transactions tested, resulting in material noncompliance with the suspension and debarment requirements of the CSLRF program and increased risk of using federal funds with ineligible vendors. Recommendation: We recommend the City develop and implement formal written procedures to ensure suspension and debarment checks are performed on all CSLFRF transactions and documented appropriately. Views of Responsible Officials and Planned Corrective Actions: The City agrees with the recommendation and plans to implement corrective action by December 31, 2025. Staff are in the process of drafting internal policies for adoption by the appropriate boards to address this item as soon as possible for any of our grant funds not managed by a third-party administrator.