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City of Redwood City 6.1.F. - Page 179 Single Audit Reports Notes to Schedule of Expenditures of Federal Awards For the year ended June 30,2012 C. FINDINGS AND QUESTIONED COSTS - MAJOR FEDERAL AWARD PROGRAM AUDIT, Continued SA 2012-01 -Procurement,Suspension,and Debarment (Continued): Cause The City personnel were not aware of the requirement. Recommendation We recommend the City update their procurement policies and procedures, to include a process to verify contracts greater than$25,000 for non-construction contracts. Views of responsible officials and planned corrective actions The Public Works Division was not aware of the requirement to verify whether Sensus or Golden State Flow Measurement had been suspended or debarred. Since learning of this requirement, the Public Works Division has researched and verified that neither Sensus nor Golden State Flow Measurement is on the excluded parties list system (EPLS) as identified on the System for Award Management website, www.sam.�ov. To correct this problem going forward, the Public Works Division has created a "EPLS-SAM Self- Certification° form that will be required as part of the Public Works purchasing guidelines. Vendors will need to self-certify themselves and Public Works staff will also conduct a second verification on www.sam.gov after the form is submitted. The Public Works Division has also created a new administrative group that will review all contracts, bid specifications, competitive proposals, grant applications, and other documents for completeness before they go to the Assistant Public Works Director for approval. This new layer of management will ensure that the documents produced by each operating section(Water,Wastewater,Right-of-Way and Fleet) are correct and follow all City guidelines. The statutory requirement for debarment verification states "it may be met by including a clause or condition in contracts or agreements". The City's CDBG agreements with subrecipients, contractors and vendors include clauses required by Federal statutes and Executive Orders and their implementing regulations which include debarment. This was the method the City CDBG program used to meet the statutory requirement in past practice with subrecipients and vendors. Additionally the City's CDBG program has consistently completed debarment verifications on all prime construction contractors. The City's CDBG program procedure for debarment verification has now been updated to include a requirement to complete and maintain documentation of debarment verifications in all project files for subrecipients,contractors and vendors. 13