TACOMA-PIERCE COUNTY CHAMBER OF COMMERCE

2025-001 Preparation of Schedule of Federal Expenditures of Federal Awards ("SEFA") Criteria The SEFA is required to be prepared in accordance with the Uniform Guidance to reflect expenditures of federal awards. Condition The original SEFA presented to the audit firm was overstated by $35,921 due to inclusion of nonfederal award expenditures. Context The SEFA included revenue amounts that the Chamber had received through revenue streams other than a federal award. Effect The SEFA did not properly reflect the amount of federal awards as required by Uniform Guidance and had the potential to have an incorrect major program selected. Cause The Chamber's internal control over the preparation of the SEFA was not effective to verify the proper amount of federal expenditures. Auditor's Recommendations We recommend implementation of procedures to provide oversight that ensures the completion of an accurate SEFA.

2025-002 Significant Deficiency in Internal Controls Over Noncompliance and Noncompliance over Major Programs Criteria Internal controls and other compliance knowledge should support the wages billed to the federal award. Per 2 CFR 200.430(g)(1), "charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed" and "be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated." Condition Internal control and adherence to compliance were not followed with regards to records that accurately reflect the work performed. Questioned costs Total questioned cost of $1,277 based on the payroll transactions tested for one employee that were not accurately supported with records that reflected the work performed. Context During our payroll testing, of the ten payroll transactions we tested, one employee had two payroll transactions that indicated the wages billed to the federal award were not accurately supported by the employee's timesheet. We expanded our payroll testing and sampled four additional transactions for this employee. Of the six total payroll transactions tested for this employee, none of them were accurately supported by their timesheet for hours worked on the federal award. Cause The error was caused by not applying adequate number of controls necessary for billing wage expenses to the federal award. Effect The Federal award was incorrectly charged with unreasonable wages. Repeat Finding No. Auditor's Recommendations We recommend that Chamber implement stronger internal controls over billing wage expenses to the federal award.

2024-001 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Federal Program Information Funding Agency: U.S. Department of the Treasury Federal ALN: 21.027 Criteria Per 2 CFR 200.214, non-federal entities are prohibited from contracting with parties that are suspended or debarred. 2 CFR 200.318(i) also states that "subrecipients must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price." Condition The Chamber has a procurement policy in place; however, the Chamber neglected to verify if vendors had been suspended or debarred, in accordance with stated regulations. The Chamber also did not maintain sufficient records to document the rationale for the procurement method used for a transaction exceeding the small purchase threshold. Questioned Costs $25,000 Context A sample of 3 vendors was made from a population of 3 vendors whose expenses exceeded the covered transaction threshold that were charged to the major program. Of the 3 sampled vendors, the Chamber neglected to check the suspension or debarment status of 1 vendor prior to entering a covered transaction of $25,000. A sample of 3 vendors was made from a population of 3 vendors whose total transactions exceeded the small purchase threshold. Of the 3 sampled vendors, the Chamber did not maintain sufficient records to document the rationale of using a noncompetitive procurement method for a small purchase transaction. Cause The Chamber claimed that they had been conducting business transactions with this vendor prior to having a procurement policy in place and did not implement the procurement policy on already developed business relationships. The Chamber also did not consider documenting its rationale for continuing to use the vendor for services that exceeded the small purchase threshold that were charged to the major program. Effect Purchases may have occurred that do not follow the policy, and contracts with vendors that had been suspended or debarred could have been awarded and not detected. The Chamber also did not conduct procurement transaction "in a manner that provides full and open competition," as defined in 2 CFR 200.319(a). Repeat Finding Yes - reference 2023-001. Auditor's Recommendations Tacoma-Pierce County Chamber of Commerce should include a provision in all contracts transacted in conjunction with using funds originating from a federal award grant, with respect to suspension and debarment, communicate all requirements for procurement to staff and establish procedures to verify that vendors are not suspended or debarred. Chamber staff should also perform an independent status check of vendors in sam.gov prior to entering into an agreement and retain the search results. The Chamber should also evaluate its current method of procurement and educate staff that if using funds from a federal award to enter into a transaction exceeding the small purchase threshold, that full and open competition must be facilitated, despite any prior relationships with vendors.

Funding Agency: U.S. Department of the Treasury Federal ALN: 21.027 Criteria Per OMB guidance, non-federal entities are prohibited from contracting with parties that are suspended or debarred, or whose principals are suspended or debarred. Condition The Chamber has a procurement policy in place; however, the Chamber neglected to verify if vendors had been suspended or debarred, in accordance with stated regulations. Context Per our review of vendors over the applicable threshold, there was no documentation of having been reviewed for suspension or debarment. Cause Staff claimed that they had been conducting business transactions with these vendors prior to having a procurement policy in place and did not implement the procurement policy on already developed business relationships. Effect Purchases may have occurred that do not follow the policy, and contracts to vendors that had been suspended or debarred could have been awarded and not detected. Auditor's Recommendations Tacoma-Pierce County Chamber of Commerce should include a provision in all contracts transacted in conjunction with using funds originating from a federal award grant, with respect to suspension and debarment, communicate all requirements for procurement to staff and establish procedures to verify that vendors are not suspended or debarred.

2022-001 Procurement, Suspension and Debarment Federal Program Information Funding Agency: U.S. Department of the Treasury Federal ALN: 21.027 Criteria Per OMB guidance, non-federal entities are prohibited from contracting with parties that are suspended or debarred, or whose principals are suspended or debarred. The guidance also requires the entities to follow documented procurement procedures. Condition There is no policy in place for procurement procedures to determine whether vendors are suspended or debarred. Context Per our review of vendors over the applicable threshold, there was no documentation of having been reviewed for procurement, suspension or debarment. Cause Staff were not aware of the specific compliance requirements and procedures for procurement, suspension and debarment status. Effect Purchases may occur that do not follow the policy, and contracts to vendors that had been suspended or debarred could be awarded and not detected. Auditor's Recommendations Tacoma-Pierce County Chamber of Commerce should include a provision in contracts with respect to suspension and debarment, communicate all requirements for procurement to staff and establish procedures to verify vendors are not suspended or debarred.