OPENLANDS

Assistance Listing Number, Federal Agency, and Program Name - 10.727, U.S. Department of Agriculture, Inflation Reduction Act Urban & Community Forestry Program Federal Award Identification Number and Year - 24 DG 11094200 194, 2024; 24 CA 11132544 013, 2024 Pass through Entity - U.S. Department of Agriculture (Direct Funded); GreenLatinos Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.303, the recipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should align with the guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control-Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition - Management did not have controls in place to ensure documentation evidencing the organization's verification that contractors are not suspended or debarred from participating in a federally funded activity was maintained. Questioned Costs - N/A If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported - N/A Identification of How Questioned Costs Were Computed - N/A Context - While gaining an understanding of Openlands' internal controls, we noted management was unable to provide documentation to support that checks for suspension and debarment occurred before the organization entered into a covered transaction. We were able to verify in our sample testing that management did not enter into contracts with individuals or organizations suspended or debarred from participating in federal programs. Cause and Effect - A lack of controls could result in material noncompliance with federal procurement standards. Recommendation - We recommend management retain documented evidence that checks for suspension and debarment that have occurred before entering into a covered transaction with outside contractors. Views of Responsible Officials and Corrective Action Plan - Management concurs with the finding. We acknowledge that, for the awards issued under the Inflation Reduction Act Urban and Community Forestry Program (Assistance Listing Number 10.727), the required suspension and debarment verification was performed; however, the supporting documentation evidencing this verification was not retained by the responsible department. This represents a documentation lapse rather than a deficiency in internal controls, as Openlands routinely performs suspension and debarment verifications for all applicable vendors, contractors, and subrecipients receiving federal funds in accordance with 2 CFR 200.214. This requirement applies to entities and individuals awarded federally funded contracts or subawards exceeding the micropurchase threshold and excludes routine commercial vendors for indirect administrative costs or purchases under $15,000. Management believes this was an isolated documentation lapse prior to the current audit period when the contractor was selected and is currently in the process of executing an update to internal control policies to ensure these checks are maintained prior to entering into a contract by the responsible department, as well as updating a clause to all standard vendor contracts requiring a self-certification that they are not excluded, debarred, or suspended from entering into covered transactions with the federal government.