City of Wells, NV

U.S. Environmental Protection Agency Passed through State of Nevada Division of Environmental Protection Sewer Overflow and Stormwater Reuse Municipal Grant Program, 66.447 Procurement, Suspension and Debarment Significant Deficiency in Internal Control over Compliance and Noncompliance Grant Award Number: Affects all grant awards under assistance listing number 66.447 on the Schedule of Expenditures of Federal Awards Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires contracts to include Disadvantaged Business Enterprise (DBE) Contract Terms and Conditions as specified by EPA regulations. Condition: Per review of the contract with the vendor, the required Disadvantaged Business Enterprise (DBE) Contract Terms and Conditions were missing. Cause: The City did not have adequate controls to ensure that DBE contract terms and conditions were included as required. Effect: The City may not be in compliance with EPA DBE requirements, potentially impacting eligibility for federal funding. Questions Costs: None reported. Context/Sampling: All contracts were selected for testing as there was only one contract during the year; the contract reviewed did not include the required DBE terms. Repeat Finding from Prior Year: No. Recommendation: We recommend the City enhance controls to ensure all required DBE contract terms and conditions are included. Views of Responsible Officials: Management agrees with the finding.

U.S. Environmental Protection Agency Passed through State of Nevada Division of Environmental Protection Sewer Overflow and Stormwater Reuse Municipal Grant Program, 66.447 Reporting Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards under assistance listing number 66.447 on the Schedule of Expenditures of Federal Awards Criteria: 2CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance the the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Cause: The City did not have adequate controls to ensure that all reimbursement requests were properly approved. Condition: Two out of five reimbursement requests had not evidence of approval. Effect: Reimbursement requests may be processed without proper authorization, increasing risk of improper payments. Questions Costs: None reported. Context/Sampling: All five reimbursement requests filed during the year were selected for testing; two lacked evidence of approval. Repeat Finding from Prior Year: No. Recommendation: We recommend the City implement procedures to ensure all reimbursement requests are properly approved and documented. Views of Responsible Officials: Management agrees with the finding.

2024-002 U.S. Department of Treasury Passed through State of Nevada’s Governor’s Finance Office COVID-19, Coronavirus State and Local Fiscal Recover Fund, 21.027 Procurement, Suspension and Debarment Significant Deficiency in Internal Control over Compliance and Noncompliance Grant Award Number: Affects all grant awards under assistance listing number 21.027 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires contracts greater than $25,000 to contain suspension and debarment provisions. Condition: During our audit testing of procurement and suspension and debarment over for the year ended June 30, 2024, we noted one contract did not contain a suspension and debarment clause as required for contracts greater than $25,000 per Federal Regulation - Appendix II to 2 CFR Part 200. We did note that the City checked sam.gov to ensure contractor was not suspended and debarred. Cause: The City of Wells did not have adequate controls to ensure that the required provisions over suspension and debarment were included in the contract. Effect: A contract may be awarded to a contractor that is suspended and debarred. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of three procurement transactions of three were selected for testing, one contract out of the three selected was missing the required provisions. Repeat Finding from Prior Year: No. Recommendation: We recommend the City of Wells enhance controls to include required contract provisions. Views of Responsible Officials: Management agrees with the finding.

2023-002 U.S. Department of Transportation COVID 19 - Airport Improvement Program Federal Financial Assistance Listing Number 20.106 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR Part 200 (Uniform Guidance) requires that reports submitted to the Federal Awarding agency include all activity of the reporting period and are presented in accordance with applicable program requirements. Condition: During our audit testing of reporting over the federal fiscal year ended September 30, 2022 SA-425, Federal Financial Report, we noted that two out of the three reports due 90 days after the federal fiscal year end of September 30th, were not submitted by the City of Wells’ during the fiscal year. Cause: The City of Wells did not have adequate controls to ensure that the required SF- 425s were submitted. Effect: The required SF-425s were not submitted in accordance with the program requirements. Questioned Costs: None reported. Context/Sampling: All reports were selected for testing. Repeat Finding from Prior Year: No. Recommendation: We recommend the City of Wells enhance controls to provide for the submission of required program reports. Views of Responsible Officials: Management agrees with the finding.

2022-002 U.S. Department of Treasury Passed Through State of Nevada Governor?s Finance Office COVID-19 Coronavirus State and Local Fiscal Recovery Fund CFDA 21.027 Procurement, Suspension and Debarment Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR Part 200 (Uniform Guidance) requires that a non-Federal entity must use its own documented procurement procedures which reflect applicable state and local laws and regulations, provided that the procurement procedures conform to applicable federal law and standards. Condition: We noted the City of Wells has not updated its procurement policies to conform to applicable federal laws and standards. Cause: The City of Wells did not adequate controls to ensure its procurement policies were updated to conform with the procurement requirements identified in the Uniform Guidance. Effect: Procurement may not follow federal laws and standards. Questioned Costs: None reported. Repeat Finding from Prior Year: No. Recommendation: We recommend the City of Wells implement controls to ensure its procurement policies are updated to conform with procurement requirements identified in the Uniform Guidance. Management's Response: Management agrees with the finding and procurement policies will be updated to conform with procurement requirements identified in the Uniform Guidance.