City of Idaho Falls

Criteria or specific requirement – Federal regulations require that grantees have controls in place to verify that vendors are not suspended or debarred prior to entering into contracts for goods and services exceeding $25,000. Condition – For five of the contracts tested, there was no evidence of verification from sam.gov being obtained to verify vendors were not suspended or debarred prior to conducting business. There was also no evidence in the City’s contract with the vendor that the appropriate language had been included. Context – Of the 17 vendors that had expenditures greater than $25,000, we selected seven vendors for procurement testing. Effect - The City could be transacting with parties that are suspended or debarred and may be subject to questioned costs or other sanctions from funding agencies. However, during the course of the audit we verified these vendors were not previously suspended or debarred. Cause - There were ineffective controls in place during the period, along with lack of management oversight. Repeat finding - No Recommendation - We recommend that before the City executes contracts with vendors that exceed $25,000, the vendor is compared to the listing of suspended and debarred vendors on the sam.gov website and that this verification is properly documented. Views of responsible officials –The City concurs with the auditor’s finding.

2023-004 U.S. Department of Transportation Federal Financial Assistance Listing 20.106 Airport Improvement Grant 3-16-0018-048-2020, 3-16-0018-049-2021, 3-16-0018-054-2021, 3-16-0018-055-2021, 3-16-0018-056-2022 Compliance Requirement - Reporting Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR §200.328, Financial Reporting, mandates that information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently than quarterly except in unusual circumstances. Condition: During our testing of the required annual reports, SF-425 report, it was noted some of the annual reports required to be submitted by December 31, 2022, were submitted late on January 3, 2023. Cause: During the period under audit, there was a changeover in personnel at the airport, including the individual who was responsible for reviewing and submitting the reports. Effect: The reports were submitted to and accepted by the FAA; however, they were late. Questioned Costs: None reported. Context/Sampling: Sampling was not used. 100% of the required reports were tested. Of the 11 reports required to be submitted by December 31, 2022, 5 of them were late. Repeat Finding from Prior Year(s): Yes, 2022-001 Recommendation: The City should review its current policies and processes to ensure that the controls operate effectively, even in the event of a change in personnel. Views of Responsible Officials: The City concurs with the auditor’s findings.

U.S. Department of Transportation; U.S. Treasury Department Federal Financial Assistance Listings 20.507 Federal Transit Cluster FTA 5307 CARES Act 2020 – Agreement #CA-17, ID-2021-027 Federal Financial Assistance Listings 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Compliance Requirement – Procurement, Suspension, and Debarment Material Weakness in Internal Control over Compliance Criteria: Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Condition: We noted that while the City does have a purchasing policy, elements required by Uniform Guidance are absent from the policy. This created a situation where the City did not verify vendors were not suspended or debarred before entering into contract with that vendor. In addition, elements that are required to be included in contracts with vendors who are paid using federal monies were missing from the contracts. Cause: The City had not reviewed its procurement policy to ensure that the policy and contracts included the provisions that were required by the Uniform Guidance. Effect: While our testing noted no instances of noncompliance, the absence of internal controls over compliance as it relates to having a Uniform Guidance compliant policy, could lead the City to enter into covered transactions that are not compliant with federal regulations. Questioned Costs: None reported. Context/Sampling: Sampling was not used to test compliance of the Policy. Repeat Finding from Prior Year(s): No Recommendation: The City should review the applicable provisions of the CFR to ensure their written procurement policy is compliant with Uniform Guidance requirements. Views of Responsible Officials: The City concurs with the auditor’s findings.

U.S. Treasury Department Federal Financial Assistance Listing 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Compliance Requirement – Reporting Material Weakness in Internal Control over Compliance Criteria: Non-federal entities may be required to submit performance reports at least annually but not more frequently than quarterly, except in unusual circumstances, using a form or format authorized by OMB (2 CFR section 200.329). They also may be required to submit special reports as required by the terms and conditions of the federal award. For the Coronavirus State and Local Fiscal Recovery Funds, the City is required to submit the Project and Expenditure Report quarterly. Condition: We noted that while the City submitted the reports as required, the reports contained errors including incorrect amounts and reporting information on the incorrect line items. Cause: The City did not have processes in place to ensure that amounts and information being reported to the Treasury contained accurate and complete information, and that the information being reported was on the correct line. Effect: The City submitted inaccurate reports to Treasury. While the City ultimately corrected the reports with their final annual report submission, the timing of the corrected report was outside the Treasury allowed timeframe of 60 days after the report. Questioned Costs: None reported. Context/Sampling: Sampling was not used as 100% of the reports that were required to be submitted were tested. Repeat Finding from Prior Year(s): No Recommendation: The City should review their current practices and procedures for federal compliance reporting to ensure that the information being reported is complete and accurate. Views of Responsible Officials: The City concurs with the auditor’s findings.

Department of Transportation Federal Financial Assistance Listing 20.106 Airport Improvement Grant 3-16-0018-044-2018, 3-16-0018-045-2019, 3-16-0018-046-2019, 3-16-0018-047-2020, 3-16-0018-050-2021, 3-16-0018-051-2021, 3-16-0018-052-2021 Compliance Requirement - Reporting Type of Finding ? Significant Deficiency in Internal Control Over Compliance Criteria: There is a general expectation that required reports are submitted to FAA timely, and that the reports are reviewed by the appropriate level of management before submission to FAA. Condition: During our testing of the required reporting of Forms SF 271-2021 and SF 425-2021, we noted that all of the annual reports due December 31, 2022, were filed late. In addition, three of the SF 425-2001 reports were not reviewed before submission. Cause: During this period, there was a changeover in management which caused the filings to be submitted late. This also created a situation were not all of the reports were reviewed before being submitted. Effect: The reports were submitted to and accepted by FAA, but they were late and not all of the reports were reviewed for accuracy before being submitted. Questioned Costs: None reported Context/Sampling: 100% of the required filings were tested Repeat Finding from Prior Year(s): No Recommendation: Processes should be in place and well documented so that future changeovers in management does not cause a disruption the preparation, review, and submission of the required reports. Views of Responsible Officials: Management agrees with the finding.