OTOE COUNTY, NELocal Government

Program - AL 10.923 ? Emergency Watershed Protection Program ? Suspension & DebarmentGrant Number & Year - NR206526XXXXC015, FFY 2021Federal Grantor Agency - U.S. Department of AgricultureCriteria - Title 2 of the U.S. Code of Federal Regulations (CFR) ? 180.300 (January 1, 2021) requires non-federal entities to verify an entity is not excluded or disqualified prior to entering into a covered transaction by, ?(a) Checking SAM Exclusions; or (b) Collecting a certification from that [entity]; or (c) Adding a clause or condition to the covered transaction with that [entity].? A good internal control plan requires adequate procedures to ensure the County has proper procedures in place to verify that contractors paid with grant funds are not suspended, debarred, or otherwise excluded from or ineligible for participation in Federal programs or activities.Condition - The County entered into a contract with Circle A Construction, for the construction of a channel rehabilitation project titled ?Otoe County EWP, Site 188,? for $110,475. At the completion of the project the County Board approved and paid $94,953 on March 9, 2021, to Circle A Construction for the work completed. Additionally, the County entered into a contract with High Plains Enterprises, for the construction of a channel rehabilitation project titled ?Otoe County EWP, Site 191,? for $49,598. At the completion of the project, the County Board approved and paid $65,605 on January 12, 2021, to High Plains Enterprises for the work completed. Per discussion with the County Highway Superintendent, after a project has been bid, but before the project is awarded, the County?s consultant, Mainelli Wagner & Associates Inc, reviews SAM exclusions online to verify the contractor the County may award the project to has not been disbarred, suspended, or otherwise excluded from participating in a Federal project. However, the County was unable to provide documentation that this procedure occurred prior to entering into contracts for the Emergency Watershed Protection Program projects with Circle A Construction and High Plains Enterprises. We noted that the two contractors in question were not suspended, debarred, or otherwise excluded from participation in Federal programs or activities as of the date testing was performed.Repeat Finding - NoQuestioned Costs - NoneStatistical Sample - NoCause - The County relies on the County?s consultant, Mainelli Wagener & Associates Inc, to review SAM exclusions online for contractors before a project is award to a contractor as part of the services provided by the consultant. However, these services are not documented in a formal agreement with the consultant.Effect - Without adequate procedures to ensure contractors are not suspended, debarred, or otherwise excluded from or ineligible for participation in Federal programs or activities, there is an increased risk for the misuse of Federal funds and noncompliance with Federal regulations.Recommendation - We recommend the County implement procedures to ensure, prior to entering into a covered transaction, that a contractor is not suspended, debarred, or otherwise excluded from or ineligible for participation in Federal programs or activities, and that procedure is adequately documented.View of Officials - The County has discussed the finding and will implement a policy to ensure suspension and debarment is both verified and adequately documented prior to awarding any contact or agreement paid with Federal funds. As noted, neither of the Emergency Watershed Protection Program transactions tested included parties which were excluded by the Federal Government.