The audit team must explore and understand the vendors policies and procedures to adequately perform their assessment. Recipients should note that SLFRF funds available under the revenue loss eligible use category generally may be used to meet the non-federal cost-share or matching requirements of other federal programs. You can find the full rule (all 437 pages of it) here and a brief overview (only 44 pages) here. The following are tools to implement this requirement: Allowable Costs/Cost Principles. The OIG is developing classes to introduce local officials to specific data analysis techniques. bWlLLiBg`x m 200.317-318. WebGeneral Requirements for Procurement Programs . Without thinking much about it, you gathered data and made a decision based on that data. As outlined in the Uniform Guidance at 2 CFR Part 200, Subpart E regarding Cost Principles, allowable costs are based on the premise that a recipient is responsible for the effective administration of Federal awards, application of sound management practices, and administration of Federal funds in a manner consistent with the program objectives and terms and conditions of the award. clarified that funds made available under the American Rescue Plan Act (ARP) Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) are subject to federal procurement requirements outlined in the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), found at Title 2 of the Code of Federal Regulations, Part 200 (2 CFR 200). Before engaging with any vendor, do your research and review your contract closely. To assist you with overcoming this challenge, the Office of the Inspector General will publish a series of articles to help demystify data analytics and its uses. 2 CFR 200.317 - 2 CFR 200.327. 117- 2 (March 11, 2021). For example, the city of Boston used ARPA fiscal recovery funds to award more than $3.4 million in grants to 192 local arts and cultural organizations. 11246. Please do not include personal or contact information. See M.G.L. To ensure that jurisdictions get the supplies and services they need and to combat fraud, waste and abuse, it is essential that jurisdictions carefully review all vendor payment requests. hWoHWcORPKt.u8 -fA zA^%hq0)`Q9^2 B $BJ*'xdg.|vOhRRFa)`q:e8^0^0^0^0^ 6fn?iTDuHG?=t1Ax twx3Oy!/%G}KoW%0!,k69\=nl In addition, the vendor did not notify the housing authority before adding the fee to the invoice. Additional changes to compliance and reporting guidelines, including any clarifications on Uniform Guidance requirements, will be addressed in Compliance and Reporting Guidance and the User Guide. Come with your questions and share your experiences and insights with colleagues across the State. We will use this information to improve this page. Fraud, waste and abuse can occur even when comprehensive contracts are in place. If you would like to continue helping us improve Mass.gov, join our user panel to test new features for the site. Further, the individuals who review and approve invoices must know the contract terms, conditions and specifications. 200.317, 200.322, and 200.326. ARPA-funded projects must also adhere to North Carolina state law, It will include a detailed look at the various UG provisions and sample policies. Consider whether prevailing wage rates apply. Ensure the agency received all of the purchased goods and services. A cost is consistently applied when it is applied uniformly to both federally-funded and other activities of the local government. 9-10). While a right-to-audit clause gives the team the contractual authority to conduct the audit, getting buy-in from management will help make the audit more efficient and effective. Final approval for sole source procurement requests in most states resides with the Chief Procurement Official. Requirements for bidders and contractors under this order are explained in the specifications. Note: This language must be included in the Bid solicitation. For example, information from purchase descriptions, vendor quotations, proposal evaluation forms and invoices contain many data points. Noncompetitive procurement is only allowed if certain criteria are met. After reviewing and analyzing data, managers can follow up and review more information, identify issues and resolve them. US Treasury issued theFinal Ruleof the Coronavirus State and Local Fiscal Recovery Fund program of the American Rescue Plan Act of 2021 (ARP/CSLFRF) in January 2022. The following are sample policies and other implementation tools for many of these award terms and UG requirements. External sources are another area from which data can be gathered and used in an analysis. One of the biggest errors that an audit team can make is not adequately understanding the vendors processes, especially the transaction process. Blackboardor other virtual platform login details will be emailed to registrants. 3. Most Commonwealth agencies and municipalities rely on vendors to supply the goods and services they need to operate. Proposals must be solicited from an adequate number of qualified offerors. For instance, recipients should note that SLFRF funds may not be used as the non-federal share for purposes of a states Medicaid and CHIP programs because the OMB has approved a waiver from this provision as requested by the Centers for Medicare & Medicaid Services pursuant to 2 CFR 200.102 of the Uniform Guidance and related regulations. Determine if billings are accurate and in compliance with contract terms. One key oversight tool is the vendor audit. When was the last time your client revised their procurement contracts? You must ensure that the vendors you are doing business with are legitimate and responsible. As a result, that staff member should be able to determine if the invoice accurately reflects the contractors work. Massachusetts jurisdictions received over $25 billion through ARPA. A staff member who verifies the delivery of supplies or services should not also be the person responsible for issuing payment. You can access that post here. SLFRF funds transferred to subrecipients are also subject to reporting and Uniform Guidance requirements. See M.G.L. 179 0 obj <>/Filter/FlateDecode/ID[<598620AB2247954EBE922AD03988F6D9>]/Index[165 31]/Info 164 0 R/Length 86/Prev 341858/Root 166 0 R/Size 196/Type/XRef/W[1 3 1]>>stream Subrecipients are subject to an audit pursuant to the Single Audit Act and 2 CFR part 200, subpart F regarding audit requirements, whereas contractors are not subject to an audit pursuant to the Single Audit Act and 2 CFR part 200, subpart F regarding audit requirements. Are there existing sources for that data? 5. The audit team should also obtain buy-in and support from the vendors management before initiating the audit. The procurement code mandates city responses be mailed to the protestor and all other applicants so as to inform them of the ability to appeal the decision related to the protest. Most audits involve overcoming at least some animosity by parties who are resistant to having their work reviewed. Suspicious invoices: even or round invoice amounts, as well as non-sequential invoices, are red flags. This page is located more than 3 levels deep within a topic. Webprocurement can be used. Recipients that receive an aggregate amount of federal financial assistance in a given fiscal year that exceeds the Single Audit threshold are subject to the requirements in 2 CFR 200 Subpart F, Audit Requirements, unless otherwise specified in program-specific guidance. Two significant areas that did not change are the applicability of Uniform Grant Guidance to ARPA funds and the federal audit requirements over these funds. To promote accountability, ARPA includes requirements for the administration, monitoring and reporting of funds. %PDF-1.6 % Treasury may request transfer of records of long-term value at the end of such period. Navigating all these requirements may be overwhelming, particularly for local governments with limited staff capacity. For purposes of the Federal procurement requirements, states are defined as the 50 states, the District of Suggestions are presented as an open option list only when they are available. WebProcurement Recipients are responsible for ensuring that any procurement using SLFRF funds, or payments under procurement contracts using such funds, are consistent with the procurement standards set forth in the Uniform Guidance at . And always carefully read all contract terms before entering into any contract, October 2018 Procurement Bulletin Article. The jurisdiction stopped making payments to the vendor and began to investigate whether it entered into some sort of bulk purchasing scheme. (A) statutory restrictions under the ARPA, which include: offsetting a reduction in net tax revenue, and deposits into pension funds, and (B) other restrictions on use, which include: debt service and replenishing reserves, settlements and judgments, and general restrictions. (See Final Rule pp. Procurement data can also help detect fraud, such as bid splitting and potential bid rigging. A helpful starting point is to pull data from current and historical sources and compile it into a more data-friendly format, such as an Excel spreadsheet file. During this session, WebThey are awarded in accordance with the following requirements: ( i) Requests for proposals must be publicized and identify all evaluation factors and their relative importance. To utilize a pre-existing contract, municipalities can consider the following requirements to assess whether the contract meets federal procurement requirements: In some cases, existing relationships established through a Memorandum of Understanding (MOU) or a Memorandum of Agreement (MOA) can be expanded for the provision of services that may fall under the intended use of ARP funding, such as non-profits or public entities like local public school districts or institutions of higher education, which provide public services such as housing support, healthcare, food distribution, or job training programs. Including right-to-audit clauses in vendor contracts and then performing effective audits can help reduce these risks. These guidelines are not a comprehensive list, but a reminder that organizations should remain cautious when disbursing funds. The following sample policy may be appended to your local governments regular records retention policy. Incorporate by reference any federal rules that apply to the grant award. The best way to safeguard public funds is to dedicate personnel and time to review invoices as an important component of contract administration. However, there is one contract, indicated by the red circle, which hasa large number ofchange orders when compared to the length of the contract. Recipients should note that NEUs and Non-UGLGs are not subrecipients under the SLFRF program. If you identify a fee or charge that is not accounted for in a contract between your jurisdiction and a vendor, contact the vendor for an explanation; or request a corrected invoice and a return of any improperly paid fees. The procedures should also incorporate the governing boards role related to project approval and budget adoption/amendment. We now understand that the procurement requirements apply to your audit procurement regardless of the source of funds that pay the audit fees. Additionally, ARPA funds are subject to oversight by certain state and federal agencies, including the Massachusetts OIG. The following is a sample policy to address the specifics of property management: Note that there are some grey areas related to whether and how a local government must seek US Treasurys approval for disposal of real property, equipment, or supplies over $5,000, and whether or not a local government will have to repay US Treasury its federal share. WebSourcing & Procurement. procurement, with 2 CFR 200.319(b) addressing engineering services procurement guidelines. Surveys are a helpful way to do this. These practices will also ensure that ARPA funding is used for its intended purpose: helping communities recover from the devastating health and economic impacts of the COVID-19 pandemic. Now that you understand some specific techniques for visualizing and analyzing data, we encourage you to apply these techniques to procurements or other business decisions facing your jurisdiction. Webprocurement, with 2 CFR 200.319(b) addressing engineering services procurement guidelines. 794; Title IX of the Education Amendments of 1972 (Title IX), 20 U.S.C. Are there special requirements for capital Our team excels at identifying, negotiating, procuring, and delivering quality products and services to customers doing business in various European locations and not only. See 2 C.F.R. Data is everywhere, and every function a government performs can generate valuable data. For example, if a vendor holds 15 contracts with a municipality, thevendor can more easily bill against other contracts and fraudulently charge the government. Recipients of Federal financial assistance from the Treasury are required to meet legal requirements relating to nondiscrimination and nondiscriminatory use of Federal funds. 2 CFR 200.320(c). Did you know reporting is not the only requirement for use of American Rescue Plan Act (ARPA) funds? Federal Uniform Guidance rules apply as well. Uniform Guidance? Never heard of it? Dont worry, weve got you covered. Please include this language separately in the bid solicitation. Generally, program income includes, but is not limited to, income from fees for services performed, the use or rental of real or personal property acquired under Federal awards, and principal and interest on loans made with Federal award funds. This page is located more than 3 levels deep within a topic. The UG requirements are in addition to those imposed by the Final Rule related to project eligibility. Suspension Immediate Need A temporary measure; there is a twelve month limit Usually used pending the completion of investigation or legal proceedings Based upon adequate evidence, usually an indictment Debarment Usually three years in length Weve never been audited, so there are no benchmarks to assess our performance., Our regular business hours are third shift., We cannot remove documents from our office., Cross-charging multiple clients or departments for their staffs work, Improper employee classification e.g., junior staff hours billed at a supervisors hourly rate, Overlapping time vendor creates two or more timesheets for the employee for the same day, Schedule manipulation vendor routinely postpones or schedules jobs with higher overtime rates toward the end of the week, Over-purchasing materials for personal use, Product substitution - substituting lower-quality products for those agreed upon in the contract, Failure to apply discounts, refunds and rebates, Billing materials to one project but using for another project, Intentionally applying rates from one contract to another, Billing time and equipment rates in lump-sum, unit or fixed-price contracts. Broadly speaking, data is any fact about an object or concept. Please limit your input to 500 characters. Procurement processes for expenditures using American Rescue Plan Act (ARPA) funds generally follow state and local rules. We have also learned that state agencies and municipalities can start from scratch and build the capacity to rely on data as a problem-solving tool. If you do not follow Chapter 30B because of federal requirements, make sure you document this in writing in your procurement file. Federal regulations require a local jurisdiction to apply state and local procurement laws for federally funded procurements, provided that the procurements also conform to federal law and regulations. Remember to consider whether your data gives you enough information to help you make decisions. Make sure the vendor is legitimate, responsible, has acceptable references and is properly registered to conduct business in Massachusetts. We then use this data to improve the Massachusetts Certified Public Purchasing Official Program. Impaired independence can hinder an auditors professional judgment or create the appearance that his professional judgment has been compromised. As indicated above, there may be ways to strategically spend the ARP/CSLFRF to minimize (but not eliminate) a local governments UG burden. If a recipient has a current Negotiated Indirect Costs Rate Agreement (NICRA) established with a Federal cognizant agency responsible for reviewing, negotiating, and approving cost allocation plans or indirect cost proposals, then the recipient may use its current NICRA. Implement internal controls to prevent fraud, waste and abuse. Therefore, support from potential stakeholders senior management, the Board of Directors, department decision-makers is important for a successful audit engagement. Consistently applied. We hope that this article has encouraged you to use data analysis more in your work. By regularly monitoring key performance indicators and tying grant payments to measurable standards, jurisdictions can determine which projects are working well and which require additional attention. February 2019 Procurement Bulletin Article. These risk assessments may include factors such as prior experience in managing Federal funds, previous audits, personnel, and policies or procedures for award execution and oversight. Include a right-to-audit clause in grant agreements. Government entities should only pay invoices after confirming that the vendor has satisfactorily delivered all goods, has performed all required services according to the contract and has submitted an accurate invoice. Costs/Cost Principles before entering into any contract, October 2018 procurement Bulletin Article contract.! Transaction process ensure the agency received all of the Education Amendments of 1972 ( Title IX,! 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