THE LOOP WATER AUTHORITY

Criteria or Specific Requirement – Management is required to ensure that there are sufficient internal controls in place over program purchasing. This includes use of the Authority’s own documented procurement procedures which reflect applicable state and local law regulations, provided that the procurements conform to applicable federal law and standards. As well as, internal controls that ensure that documentation is maintained to support compliance with the procurement policy. Conditions – The Authority has a formalized procurement policy (the policy). However, the policy does not conform to applicable standards under Uniform Guidance because it does not include procedures to ensure the Authority does not enter into covered transactions with entities that are debarred, suspended, or otherwise excluded. We noted during our testing that there was limited documentation of the Authority's procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Context – During our testing of procurement, we sampled eight expenditures totaling $641,520 consisting of transactions with three companies. We noted that four of the selections with one company totaling $250,774 did not have SAMS.gov verification or compliance certification documentation. However, as part of our audit procedures, we determined that the expenditures were made with contractors which were not suspended or disbarred and were approved on the SAMS.gov website. Cause – Procurement policy was not sufficient to ensure full compliance. Effect or Potential Effect – The use of non-approved vendors could have occurred. However, as part of our audit procedures, we determined that the expenditures were made with contractors which were not suspended or disbarred and were approved on the SAMS.gov website. Recommendation – We recommend that management strengthen their formal procurement policy using the guidance of 2 CFR 200.317 –200.327. Additionally, management should follow this policy when procuring services or property and maintain the related documentation. Views of Responsible Officials and Planned Corrective Actions – Management agrees with the finding. Management is in the process of reviewing and revising its policies.