Protect your jurisdiction and thwart bid manipulation by: you suspect bid manipulation, contact the Office of the Inspector Generals fraud, waste and abuse hotline at (800) 322-1323. In this article, we delve into two specific techniques for creating and using data visualizations, which can further aid a jurisdiction in detecting waste or fraud. If a recipient seeks to use SLFRF funds to satisfy match or cost-share requirements for a federal grant program, the recipient should first confirm with the relevant awarding agency that no waiver has been granted for that program, that no other circumstances enumerated under 2 CFR 200.306(b) would limit the use of SLFRF funds to meet the match or cost-share requirement, and that there is no other statutory or regulatory impediment to using the SLFRF funds for the match or cost-share requirement. We are working on detailed roadmaps to implementing these UG policies and templates for different potential expenditure items. Determine if billings are accurate and in compliance with contract terms. c. 30B, 1(f). All other recipients must follow 2 CFR 200.318, General procurement standards, through 200.327, Contract provisions. The UG requirements are in addition to those imposed by the Final Rule related to project eligibility. For example, a roadway repair and maintenance contract should not include unrelated supplies or services, such as classroom IT equipment or roadway paving in a location not specified in the contract. February 2019 Procurement Bulletin Article. If a local government partners with another government, nonprofit, or other private entity to carry out an ARP/CSLFRF award project, it must follow the subaward process. 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. If this fails, contact your local jurisdictions legal counsel because the vendor may have breached the contract. [1] These requirements outline the general standards and regulations for the procurement of goods and services for recipients and subrecipients of federally awarded funds. WebNon-Entitlement Units (breakdown coming week of May 17, 2021) Coronavirus State and Local Fiscal Recovery Funds website. The executive order requires that every goods or services contract or agreement must incorporate an auditing provision permitting the government to audit the vendors books, records and other compilations of data relative to the performance of any provision or requirement of the contract or agreement. The state agency or municipality should first identify the goal of the audit, which will determine the type of audit to perform. Knapp-Sanders Building Generally, Chapter 30B applies even when a local jurisdiction uses federal funds to pay for supplies or services. Tie grant disbursements to deliverables, milestones or other reportable actions when possible. endstream endobj startxref Kara Millonzi has posted her initial take on the final rule in her Coates Canons post, available here. All other non-Federal entities, including subrecipients of a State, must follow the procurement standards in 200.318 through 200.327. The vendor deducted the administrative fee from the monthly payment it made to the housing authority even though this was not part of the contract between the housing authority and the vendor. 200.317, 200.322, and 200.326. This blog post highlights the UG requirements and provides several sample policies and other implementation tools. January 14, 2022 ARPA Final Rule and Procurement Requirements for Audit Services *REVISED January 28, 2022* As many of you already know, the US There is no sure-fire method to uncover vendor fraud; therefore, it is the audit teams responsibility to remain alert and practice professional skepticism throughout the engagement. 0 Jurisdictions therefore must dedicate staff to evaluate documents and completed work reports from contractors to make sure that they have followed the contract before issuing payment. It is easy to become overwhelmed when determining how best to use this untapped resource. To use data in decision making, the data must exist in a format that can be analyzed. 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 We will use this information to improve this page. The following are a sample subaward policy, risk assessment, subaward agreement template, and subrecipient monitoring tool (they are all in a single Word file): Although there is a lot of federal red tape to navigate regardless of how a local government expends its ARP/CSLFRF funds, there are some opportunities to reduce a local units compliance burden. 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. Thank you for your website feedback! As an example, the Infrastructure Investment and Jobs Act provides that SLFRF funds may be used to meet the non-federal match requirements of authorized Bureau of Reclamation projects and certain broadband deployment projects. 794; Title IX of the Education Amendments of 1972 (Title IX), 20 U.S.C. The following is the schedule for the next several weeks. We also will be holding at least two courses this spring: April 4, 2022: Basics of ARP/CSLFRF and UG for Local Government Attorneys and Grant Managers. The vendor provided supporting documentation for the items or services on the invoice. Including appropriate federal requirements or language in the executed contract, including bonding provisions, Contract Provisions for Non-Federal Entity Contracts Under Federal Awards. See, e.g., 2 C.F.R. 4. The particular industry, the types of goods or services involved, the size and complexity of the contract, and the applicable regulatory requirements are just a few factors that can increase an organizations risk of fraud, waste and abuse. 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. Confirm that the vendor billed at the rates stated in the contract or purchase order. Confirm that someone from the jurisdiction has inspected the work or supplies and determined that they meet the terms of the contract. For example, when reviewing payroll records, you notice that one employee reports working more hours than personnel have access to the building. WebThe Buy American requirements apply to all Recovery Act funds used for a project for the construction, alteration, maintenance, or repair of a public building or public work. This page is located more than 3 levels deep within a topic. Is the contract active and does it include the goods or services being sought? October 2017 Procurement Bulletin Article, Recently, our Office learned that a vendor included administrative fees in invoices issued to a housing authority under a revenue-generating contract. One key oversight tool is the vendor audit. Most audits involve overcoming at least some animosity by parties who are resistant to having their work reviewed. 9-10). Within that broad term, common types of vendor audits (ranging from a less-narrow scope to a more-narrow scope) include process compliance audits, financial compliance audits, regulatory compliance audits, general compliance audits, and fraud audits. These guidelines are not a comprehensive list, but a reminder that organizations should remain cautious when disbursing funds. Has the vendor demonstrated capacity and financial responsibility to provide the goods or services being sought? The contract did not entitle the vendor to charge an administrative fee and the housing authority rightly refused to pay it. Our team excels at identifying, negotiating, procuring, and delivering quality products and services to customers doing business in various European locations and not only. Jurisdictions should only make payments after reviewing all invoices and supporting documentation for accuracy and completeness. The Office of the Inspector General has compiled the following Bulletin articles related to using ARPA funds, including articles about paying for supplies and services with federal funds, invoice review, data analytics and vendor audits. 0 Suggestions are presented as an open option list only when they are available. The words data and data-driven decision-making sound daunting; however, neither is something new. Through a vehicle towing and storage contract with a local jurisdiction, a vendor stands to generate substantial revenue by regularly towing and storing vehicles. The audit team must explore and understand the vendors policies and procedures to adequately perform their assessment. Two signature programs of the ARPA are the Coronavirus State Fiscal Recovery Fund (SFRF) and the Coronavirus Local Fiscal Recovery Fund (LFRF). %%EOF Now is the time for school districts and municipalities across the Commonwealth to develop bid documents that are tailored to address the additional compliance requirements These awards are as follows: The record retention requirements for ARP/CSLFRF-related records are more stringent than those imposed under State law. Governmental entities must vigilantly oversee their vendors to prevent fraud and waste in the expenditure of their limited financial resources. One of the biggest errors that an audit team can make is not adequately understanding the vendors processes, especially the transaction process. People often make business decisions based on intuition, anecdotes or institutional lore. There are no requirements for contracts or expenditures of less than $10,000. However, using ARPA funds for contracts in excess of $10,000 triggers the mandatory contract provisions in 2 CFR Part 200, Appendix II. Most contract provisions are required only on those exceeding $100,000 or those for construction projects of any amount. Please remove any contact information or personal data from your feedback. The OIG is developing classes to introduce local officials to specific data analysis techniques. Noncompetitive procurement is only allowed if certain criteria are met. The goal of a vendor fraud audit is to determine whether the vendor intentionally acted to defraud the contracting organization. Data visualization and analysis can be particularly useful in identifying and preventing potential fraud, waste and abuse of public resources. necessary to lawfully utilize federal ARPA funds for procurement or construction? (Please note the email notification for new blog posts from the SOG is not functioning correctly at this time.). [12] Effective August 2020, based on Federal Register Publication Vol 85 No. To promote accountability, ARPA includes requirements for the administration, monitoring and reporting of funds. 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. 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. Impaired independence can hinder an auditors professional judgment or create the appearance that his professional judgment has been compromised. Volume of transactions or business: the volume of transactions or contracts alters the risk the government assumes in doing business with the vendor. American Rescue Plan Act of 2021: Sample Uniform Guidance Policies and Implementation Tools, -Boards of Mental Health, Developmental Disabilities, & Substance Abuse, -Affordable Housing & Minimum Housing Codes, -Professional Responsibility for Government Attorneys, Purchasing, Construction, Property Transactions, -Purchasing / Purchase Contracts / Purchase Orders, Assistance Listing: Coronavirus State and Local Fiscal Recovery Funds, US Treasury State and Local Fiscal Recovery Funds Compliance and Reporting Guidance, Subpart C, Pre-Federal Award Requirements and Contents of Federal Awards, Subpart D, Post Federal; Award Requirements, Project and Expenditure Report Tracking Template, Blog post explaining allowable cost and cost principles, Sample Allowable Cost and Cost Principles Policy, Sample Employee Effort Certification Form for 100% Covered Employees, Sample Employee Effort Certification Form for Less Than 100% Covered Employees, as outlined in paragraph 4.c. ARPA Expenditure Category 2.15 and 2.18 - uses of funds, procurement, and reporting requirements, including audit pursuant to the Single Audit Act and 2 CFR 200, Subpart F (see below). This policy sets up procedures for making project requests, approving those requests, and documenting that approval and any required justifications and other records. ) or https:// means youve safely connected to the official website. The short answer is: it depends. If you are still unclear about the requirements for your particular source of funding, we recommend that you contact the grantor or federal funding entity for clarification. Jurisdictions should always require the vendor to provide sufficient supporting documentation before making payment. The Uniform Guidance outlines the requirements that pertain to program income at 2 CFR 200.307. The majority of these goods and services are purchased using the Uniform Procurement Act, M.G.L. If you need assistance, please contact the Office of the Inspector General. BenfordsLaw is a mathematical observation about the frequency distribution of the first digits within a set of naturally occurring numbers. There are several techniques you could use to identify vendors to audit. Pertinent documents may include invoices, payment information, purchase orders, requisitions, general ledgers, cash disbursements, check registrars, transactional data histories and contract bid documents. Becoming overly friendly threatens the auditors independence in performing their review. Your local jurisdiction creates a demand for towing services because local officials have the authority to have vehicles towed when there are parking violations on public property or drivers need emergency roadside assistance. The smallest incongruity could lead to the discovery of a large fraud. This requirement builds on the eligible use determination. contact the Office of the Inspector General. Sole-source contractors: is the vendor really the only company who can provide a particular good or service? Most Commonwealth agencies and municipalities rely on vendors to supply the goods and services they need to operate. We welcome non-English speakers to contact us. For example, per 2 CFR 200.425, a reasonably proportionate share of the costs of audits required by the Single Audit Act Amendments of 1996 are allowable; however, costs for audits that were not performed in accordance with 2 CFR Part 200, Subpart F and the Compliance Supplement are not allowable. An official website of the Commonwealth of Massachusetts, This page, OIG Bulletin Articles Related to the Use of ARPA Funds, is, OIG Bulletin Articles Related to the Use of ARPA Funds. WebStates are required to follow their own procurement procedures as well as the Federal requirements for procurement of recovered materials and inclusion of required contract provisions per 2 C.F.R. Properly documented. As you may know, under Section 1(b)(21) of Chapter 30B contracts for the towing and storage of motor vehicles are exempt from the Uniform Procurement Act. Please do not include personal or contact information. A cost is consistently applied when it is applied uniformly to both federally-funded and other activities of the local government. Registration closes twoweeks before the class start date. There is a visible correlation between the number of change orders and the contract length, which makes intuitive sense: generally, longer contracts have more change orders. As part of its contract administration process, the housing authority discovered the improper charges when it reviewed its invoices closely. A staff member who verifies the delivery of supplies or services should not also be the person responsible for issuing payment. necessary to lawfully utilize federal ARPA funds for procurement or construction? Recently, our Chapter 30B hotline has received a number of calls asking whether Chapter 30B applies when a local jurisdiction pays for supplies or services with federal funds. two (2) subrecipients to carry these programs. However, the Office of the Inspector General (Office) recommends that local jurisdictions use an open, fair and competitive process to acquire automobile towing and storage services. This includes setting specific requirements and expectations, providing an audit timeline, including when and where you will visit, who you will interview, and which documents you will need. UNC Chapel Hill Financial compliance audits examine whether the vendor is billing appropriately. There are many reasons to audit contracts with vendors and suppliers. Webthe provision of police, fire, and other public safety services (e.g., purchasing a fire truck or police vehicles, purchasing other equipment, covering salaries of public safety personnel). Our confidential hotline is for public employees and individuals with Chapter 30B procurement questions. If the vendor has subcontracted out any work, the audit team should also distinguish whether it will be reviewing the contractors or subcontractors performance. To browse a complete catalog of School of Government publications, please visit the Schools website at www.sog.unc.edu or contact the Bookstore, School of Government, CB# 3330 Knapp-Sanders Building, UNC Chapel Hill, Chapel Hill, NC 27599-3330; e-mail [email protected]; telephone 919.966.4119; or fax 919.962.2707. A good way to start is by identifying data that would help you do your job. WebARPA Policy and Procedures Manual. This outlier may warrant further investigation. Recipients should note that NEUs and Non-UGLGs are not subrecipients under the SLFRF program. They are SLFRF recipients that will report directly to Treasury. Maintain open and direct communication with grantees. Fraud, waste and abuse can occur even when comprehensive contracts are in place. ARPA-funded projects must also adhere to North Carolina state law, WebDesigns and oversees valid and systematic programs for assessing the effectiveness of talent acquisition activities that meet the organization's needs. WebGeneral Requirements for Procurement Programs . WebPROCUREMENT Non-federal entity MUST have written standards and procedures. Require regular and thorough reporting from grantees relating to expenditures. If not, many of the bid documents your jurisdiction retains can be used as data sources. You skipped the table of contents section. Are there other vendors or organizations that could also reasonably and responsibly provide the good and/or service that may object to the lack of competition available for federal funds? Also, remember the following: 1. For example, you can analyze vendor performance using vendor quotations, proposal evaluations and past invoices. A contracting agency is free to decide that a particular award need not be restricted to professional engineering firms. Historical and external data sources might not provide the complete picture for your analysis. In this case, the subaward to a nonprofit is based on the services that the recipient intends to provide (assistance to households experiencing homelessness), and the nonprofit is serving as the subrecipient, providing services on behalf of the recipient. hb```nB eaXT00.I T~hHZIs).oIuhJOJ-= Insufficient reportingrequirements or processes, or lack of attention to grant administration, can lead to a wide range of negative results, including project mismanagement, inappropriate use of funds and failure to comply with legal requirements. Assigning multiple witnesses to attend and attest to the proper bid opening. 128, 40064-40068. With more complete information, local government officials are now looking to finalize (at least some) expenditure decisions. 9-10). The following are sample policies and other implementation tools for many of these award terms and UG requirements. Check to make sure that the supplies and services that the vendor provided met the contract terms and followed the defined scope of work. 6. 559 0 obj <> endobj The contract calls for reimbursement on a time-and-materials basis or scheduled fixed payments. By now, Ohio municipalities, counties, and townships are well aware that the federal government passed significant coronavirus relief funding in the American Rescue Plan Act (ARPA). This data should alert you to the possibility that the employee may be committing fraud and that you should investigate the matter further. It will be equally problematic from a compliance standpoint to have a policy your unit cannot or does not follow than to not have one at all. Many of the UG provisions require that the local government adopt and implement policies and procedures to ensure compliance with its requirements. Those requirements include ensuring that entities receiving Federal financial assistance from the Treasury do not deny benefits or services, or otherwise discriminate To comply with this requirement, a local government must adopt and implement an Eligible Use Policy. Treasury intends to provide additional guidance regarding program income and the application of 2 CFR 200.307(e)(1). %PDF-1.6 % Web( a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this Further, the individuals who review and approve invoices must know the contract terms, conditions and specifications. 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. 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