CITY OF LITTLETON, COLORADO

Assistance Listing Number, Federal Agency, and Program Name ALN 21.027, Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year ALN 21.027: 2024 Pass through Entity None Finding Type: Material weakness and material noncompliance with laws and regulations Repeat Finding Yes 2022 001 Criteria Uniform Guidance 2 CFR 200.320. requires the City to have a procurement policy that requires open competition for contracts funded with federal grants. Condition The City's procurement policy does not comply with Uniform Guidance 2 CFR 200.320. Questioned Costs $144,900 Identification of How Questioned Costs Were Computed Questioned costs were the amounts expended under a contract that was not was procured through competitive process. Context Of our seven procurement samples, one of the contracts was not procured through a competitive process as outlined in Uniform Guidance. Cause and Effect The City's procurement policy for professional services was not in compliance with Uniform Guidance, which resulted in the noncompliance noted in one out of the seven contracts selected for testing. Recommendation The City should review its procurement policy and ensure that it complies with the federal procurements standards outlined in Uniform Guidance. Views of Responsible Officials and Corrective Action Plan There is no disagreement with the audit finding.

Federal Agency: Department of Treasury Federal Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Award Period: March 3, 2021 ? December 31, 2024 Compliance Requirement: Procurement Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Recipients may use award funds to enter into contracts to procure goods and services necessary to implement one or more of the eligible purposes outlined in sections 602(c) and 603(c) of the Act and Treasury?s Interim Final Rule and Final Rule. As such, recipients are expected to have procurement policies and procedures in place that comply with the procurement standards outlined in the Uniform Guidance. All other entities under the program, including subrecipients of a state, must follow the procurement standards in 2 CFR sections 200.318 through 200.327, including ensuring that the procurement method used for the contracts are appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320. Condition: During our testing of internal control over procurement for CSLFRF, we noted the City did not have effective control over compliance. Questioned costs: None. Context: In our sample of five cases, there was one instance where the City did not follow its procurement policies and procedures. Cause: The City did not have adequate controls in place to ensure contracts it entered into followed its procurement policies and procedures. Effect: The City could obtain property and services in a manner that does not allow for cost-effectiveness nor providing full and open competition. Repeat Finding: No. Recommendation: We recommend the City implement controls to ensure its procurement policies and procedures are followed prior to entering into contracts. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: Department of Treasury Federal Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Award Period: March 3, 2021 ? December 31, 2024 Compliance Requirement: Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: 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 section 180.220. All non-procurement transactions entered into by a passthrough entity (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. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking SAM exclusions, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: During our testing of internal control over suspension and debarment for CSLFRF, we noted the City did not have effective control over compliance. Questioned costs: None. Context: In our sample of five cases, there were five instances where the City did not have evidence of verification the entity was not suspended or debarred prior to entering into a covered transaction with the entity. The County did provide evidence that the verification occurred subsequent to payment. Cause: The City did not have adequate controls in place to prevent it from entering into covered transactions with entities that may be suspended or debarred. Effect: The City could enter into a transaction with an entity that is suspended or debarred and inappropriately distribute program funds. Repeat Finding: No. Recommendation: We recommend that the City utilize standard forms or templates for its Requests for Qualifications and contracts with vendors to document verification that parties are not suspended or debarred prior to entering into a covered transaction with a vendor or subrecipient. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: Department of Transportation Federal Program Name: Highway Planning and Construction Cluster (HPCC) Assistance Listing Number: 20.205 Award Period: January 1, 2022 ? December 31, 2022 Compliance Requirement: Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: 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 section 180.220. All non-procurement transactions entered into by a passthrough entity (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. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking SAM exclusions, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: During our testing of internal control over suspension and debarment for HPCC, we noted the City did not have effective control over compliance. Questioned costs: None. Context: In our sample of five cases, there were five instances where the City did not have evidence of verification the entity was not suspended or debarred prior to entering into a covered transaction with the entity. The County did provide evidence that the verification occurred subsequent to payment. Cause: The City did not have adequate controls in place to prevent it from entering into covered transactions with entities that may be suspended or debarred. Effect: The City could enter into a transaction with an entity that is suspended or debarred and inappropriately distribute program funds. Repeat Finding: No. Recommendation: We recommend that the City utilize standard forms or templates for its Requests for Qualifications and contracts with vendors to document verification that parties are not suspended or debarred prior to entering into a covered transaction with a vendor or subrecipient. Views of responsible officials: There is no disagreement with the audit finding.