BASIN TRANSIT SERVICE TRANSPORTATION DISTRICT

Condition: Equipment records do not include the source of funding which includes the federal award identification number, who holds the title, the federal participation rate, and the location, use and condition of the asset to be in accordance with the Uniform Guidance. Cause: This condition appears to be the result of a lack of internal controls designed to ensure compliance with Uniform Guidance. Auditor Recommendation: We recommend that the District develop policies to ensure that assets acquired with federal funds are properly identified in capital assets records. Plan of Action: The District's plan is a two-pronged approach to ensure that appropriate policies and procedures are in place and that recoding assets whose resources include federal funds will clearly indicate the federal award identification number, who holds the title, the participation rate, the location, use, and condition that the asset is to be put to in accordance with uniform guidance. A. The District will implement a robust Capital Asset Policy to be reviewed and approved by the District's Board of Directors, Standard Operation Procedures will accompany the policy and there will be the standard guidelines in which all capital assets will be treated, regardless of where the funding resources are generated from. B. The District plans to use its accounting software, SAGE 50, and capital asset software, FAS, to document funding resources, which should include all the required information as noted in Uniform Guidance. Additionally, capital asset invoices will include proper documentation showing the funding resources and required information. Date of implementation: Corrective actions began in October 2025 and are being implemented through June 2026. In October 2025, the District developed standardized documentation to accompany capital asset acquisitions and disposals to ensure required funding source information and asset details are consistently recorded. Beginning July 1, 2025, the District began using its accounting software (SAGE 50) to track purchases funded with State or Federal sources. The Finance Department will apply this procedure to earlier capital asset records as time permits in order to improve the completeness of historical records. On February 25, 2026, the District's Board of Directors formally reviewed and approved the District's Capital Asset Policy, which establishes consistent requirements for identifying, tracking, and reporting capital assets regardless of funding source. Supporting written procedures and process documentation are being finalized and are expected to be completed by June, 30, 2026.

2022-003

Condition: The District does not have an established policy or procurement protocol in place to ensure vendor verification through one of the three methods defined in federal compliance requirements. Cause: This condition appears to be the result of a lack of internal controls designed to ensure compliance with Uniform Guidance. Auditor Recommendation: We recommend that the District update their procurement policies and processes to ensure that suspension and debarment compliance requirements are being met and effective internal controls are in place. Plan of Action: The District updated its procurement policies and proceudres to ensure compliance with federal suspension and debarement requirements under Uniform Guidance. The revised procurement policy establishes procedures requiring verification that vendors are not suspended or debarred prior to entering into contracts or making purchases using federal funds. The policy requires the Finance Department to verify vendors eligibility through one of the approved federal methods, including review of the System for Award Management (SAM.gov), obtaining vendor certifications regarding suspension and debarment status, or incorporating suspension and debarment verification language infor applicable contracts. Documentation of the verification process will be maintained with procurements records. These procedures are designed to stengthen internal controls over procurement activities and ensure the District maintains compliance with both State and Federal procurement requirements. Date of implementation: Corrective action was implemented in February 2026 when the District presented an updated Procurement Policy to the Board of Directors, which was formally approved. The revised policy includes procedures to ensure compliance with federal suspension and debarment requirements. Following Board approval, the Finance Department began implementing the updated procedures for vendor verification and maintaining documentation of suspension and debarment checks as part of procurement records. There procedures are now incorporated into the District's procurement processes to ensure ongoing compliance with federal requirements.

Plan of Action: The District’s plan is a two-pronged approach to ensure that appropriate policies and procedures are in place and that recording of assets whose resources include federal funds will clearly indicate the federal award identification number, who holds the title, the participation rate, the location, use, and condition that the asset is to be put to in accordance with uniform guidance. A. The District will implement a robust Capital Asset Policy to be reviewed and approved by the District’s Board of Directors. Standard Operating Procedures will accompany the policy and will be the standard guidelines in which all capital assets will be treated, regardless of where the funding resources are generated from. B. The District plans to use it’s accounting software, SAGE 50, and capital asset software, FAS, to document funding resources, which should include all the required information as noted in Uniform Guidance. Additionally, capital asset invoices will include proper documentation showing the funding resources and required information. Date of implementation: The policies and procedures will be reviewed by the Board of Directors no later than December 10, 2025, and will be retroactive to July 1, 2025, in order to consistently apply the policy and procedures to FY 2026. The District, if time will allow, may retroactively apply the policy to prior Fiscal Years.