Town of Camp Verde

2025 – 001 – Procurement and Suspension and Debarment

Federal Agency: U.S. Department of the Interior Federal Program Name: Outdoor Recreation Acquisition, Development and Planning Assistance Listing Number: 15.916 Pass-Through Agency: Arizona State Parks Board Pass-Through Number: ASP#4 Award Number and Period : 04-00769.2 September 7, 2021 through December 31, 2025 Statistically Valid Sample: No, and not intended to be a statistically valid sample. Type of Finding: Significant Deficiency in Internal Control over Compliance

Criteria or specific requirement: Per 2 CFR 200.303(a), the Town must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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 pass-through 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- ederal 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 the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov | Home (click on Search Record, then click on Advanced Search-Exclusions) (Note: The OMB guidance at 2 CFR part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (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).2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement, suspension, and debarment. Non-federal entities are prohibited from contracting with or making subawards under covered transactions that are suspended or debarred. Before entering into a covered transaction, the entity must verify that the contractor is not suspended, debarred, or otherwise excluded from participating in the transaction.

Condition: During our testing, we noted the Town did not have adequate internal controls designed to ensure vendors were not suspended or debarred. The Town did not retain documentation that the suspension and debarment status of contractors were verified prior to entering into the contract.

Questioned costs: None

Context: During our testing, it was noted that for all six items the Town successfully completed the suspension and debarment check as required by the uniform guidance. However, during the review, it was found that the city did not retain the documentation supporting the date when the check was performed.

Cause: The Town’s controls were not sufficient to ensure that contractors’ suspension and debarment status was documented prior to entering into the contract.

Effect: The Town could have entered into an agreement with a contractor that was suspended or debarred. Although the Town was able to demonstrate that contracts were not entered into with vendors who were suspended or debarred, the absence of documentation performed prior to contract execution presents a risk of noncompliance with applicable procurement regulations.

Repeat Finding: No.

Recommendation: We recommend the Town design controls to ensure an adequate review process is in place to review potential contractors to determine they are not suspended or debarred prior to entering into transactions with contractors.

Views of responsible officials: There is no disagreement with the audit finding.

Corrective Action Plan: See corrective action plan.

2025 – 002 - Reporting

Federal Agency: U.S. Department of the Interior Federal Program Name: Outdoor Recreation Acquisition, Development and Planning Assistance Listing Number: 15.916 Pass-Through Agency: Arizona State Parks Board Pass-Through Number: ASP#4 Award Number and Period : 04-00769.2 September 7, 2021 through December 31, 2025 Statistically Valid Sample: No, and not intended to be a statistically valid sample. Type of Finding: Significant Deficiency in Internal Control over Compliance

Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award recipients and subrecipients to comply with the federal award’s financial reporting requirements, including the timely and accurate submission of required reports.

Condition: During our testing, we noted the Town did not have adequate internal controls designed to ensure reports are accurate and complete. The Town did not retain documentation that the reports were reviewed prior to submission.

Questioned costs: None

Context: During our testing, it was noted that for all four quarterly reports the Town successfully completed and submitted the reports required by the uniform guidance. However, during the review, it was found that the Town did not retain the documentation supporting the review of when the approval was performed.

Cause: The Town’s controls were not sufficient to ensure that reports were timely submitted or accurate.

Effect: The Town could have misreported expenses or submitted reports late. Although the Town was able to demonstrate that the reports were submitted timely and accurately, the absence of documentation performed prior to submission presents a risk of noncompliance with applicable reporting regulations.

Repeat Finding: No.

Recommendation: We recommend the Town design controls to ensure an adequate review process is in place to review reports to ensure timely submission and accuracy.

Views of responsible officials: There is no disagreement with the audit finding.

Corrective Action Plan: See corrective action plan.