City of OzarkLocal Government

Item 2022-005 ? Suspension and Debarment Coronavirus State and Local Fiscal Recovery Funds ? ALN # 21.027 U.S. Department of Treasury Passed through the State of Alabama Federal Award Year - 2022 Criteria ? 2 CFR 200.303 requires the non-Federal entity to ?(a) establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award.? Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include those procurement contracts for goods and services awarded under a nonprocurement 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 section 180.220. All nonprocurement transactions entered into by a recipient (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. Condition ? Adequate controls were not in place to provide for proper review of covered transactions for suspension and debarment. Covered transactions, over $25,000 paid with grant funding were not reviewed for suspension and debarment. Cause ? The City lacked sufficient controls to ensure evidence of compliance with suspension and debarment. Questioned Costs ? Not determinable Effect ? Failure to properly verify that a potential vendor has not been suspended or debarred could result in unallowable expenditures and disallowed costs. Recommendation ? We recommend that controls should be put into place to better monitor and document the compliance of vendors for suspension and debarment. Management?s Response ? The City will implement additional controls to ensure there is evidence of review of covered transactions over $25,000 for suspension and debarment prior to payment. City?s Financial Officer will be responsible for the corrective action and anticipates completion of corrective action will be taken before September 30, 2023.

2020-003 Equipment and Real Property CFDA 97.044 Assistance to Firefighters Grant EMW-2017-FV-02174 & EMW-2018-FO-05808 United States Department of Homeland Security 2017 and 2018 Funding Criteria: Grantees should have controls in place to ensure that equipment purchased through the grant is properly maintained and tracked. 2 CFR 200.303 requires the non-Federal entity to ?(a) establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award.? Condition: The equipment purchased through the grant was not added to the depreciation schedule and the asset input form was not created for proper tracking. Cause: Lack of sufficient controls over the additions of equipment to ensure proper tracking and documentation in accordance with the grant documents. Effect: Lack of proper tracking and documentation of the equipment purchased through grant money could lead to improper equipment management or disposal. Questioned Costs: Not determinable Recommendation: We recommend the implementation of controls to ensure assets are being properly added to the depreciation schedule and tracked through the input form packet. Management Response: The City is in agreement with the finding noted and will implement a formal process to ensure assets are properly added to the depreciation schedule and tracked.