EAST CENTRAL ENERGY

Federal Program Coronavirus Capital Projects Fund (AL 21.029) Procurement Suspended and Debarred Parties Significant Deficiency Criteria 2 CFR Part 200.318 states that a non-Federal entity must have and use documented procedures, consistent with state, local, and tribal laws and regulations and the standards of 2 CFR part 200.317 through 200.327. Condition East Central Energy and Subsidiaries does not have a written procurement policy in place that adheres to Federal minimum standards. Cause East Central Energy and Subsidiaries does not have a written procurement policy that adheres to Federal minimum standards. Questioned Costs None Context Per inquiry with East Central Energy and Subsidiaries management, they do not have a procurement policy in place that adheres to Federal minimum standards. Effect Non-compliance with Procurement compliance requirements. This could result in East Central Energy and Subsidiaries not following state and local regulations as well as 2 CFR Part 200.317 through 200.327. Repeat Finding This is not a repeat finding. Recommendation Recommend for East Central Energy and Subsidiaries to create and implement a procurement policy that adheres to state and local regulations as well as 2 CFR Part 200.317 through 200.327. Views of Responsible Officials East Central Energy and Subsidiaries agrees with the recommendation.

Federal Program Coronavirus Capital Projects Fund (AL 21.029) Procurement Suspended and Debarred Parties Significant Deficiency Criteria Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a 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 part 180.220. Condition East Central Energy and Subsidiaries is not currently reviewing parties they are contracting with to ensure they are not suspended or debarred. It is noted, however, that no contractors hired by East Central Energy and Subsidiaries were listed on the suspended or debarred parties listing. Cause East Central Energy and Subsidiaries does not have written policies or procedures addressing contracting with suspended or debarred parties Questioned Costs None Context East Central Energy and Subsidiaries contracted with two contractors during the year. We tested both of these contractors and found both were not included on the suspended and debarred parties listing. Effect Non-compliance with Suspension & Debarment compliance requirements. This could result in East Central Energy and Subsidiaries contracting with a suspended or debarred party. Repeat Finding This is not a repeat finding. Recommendation Recommend for East Central Energy and Subsidiaries to create and implement a policy that to ensure all contracted parties are not included on the Federal suspended or debarred party listing, in accordance with 2 CFR part 180.220. Views of Responsible Officials East Central Energy and Subsidiaries agrees with the recommendation.