Many of our past reports highlight fraudulent or inaccurate vendor billing. BenfordsLaw should not be applied to data sets that have stated minimum and maximum values or are assigned numbers, such as interest rates, telephone numbers or social security numbers. The audit scope and appropriate approach depend on the type of audit performed. We hope that this article has encouraged you to use data analysis more in your work. 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. All rights reserved. Sole-source contractors: is the vendor really the only company who can provide a particular good or service? All other recipients must follow 2 CFR 200.318, General procurement standards, through 200.327, Contract provisions. Adhering to local procurement and contracting policies, standards, or procedures, including applicable local or state laws. Based on theAssistance Listing: Coronavirus State and Local Fiscal Recovery Fundsand Part 2 of theUS Treasury State and Local Fiscal Recovery Funds Compliance and Reporting Guidance(v3.0 February 2022) (Compliance Guide), the following UG provisions apply to the ARP/CSLFRF grant award: Most of these UG provisions impose process and internal control requirements, but some impose limitations on when, how, and for what purposes federal grant funds may be spent. 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. For more information about using COMMBUYS, contact the Operational Services Division at (617) 720-3300. Further, the individuals who review and approve invoices must know the contract terms, conditions and specifications. Costs must follow the requirements in 2 CFR 200 Subpart E, Cost Principles, including procurement standards. A few requirements drawn from the Uniform Guidance include the following: Municipalities may have existing contracts or working relationships with vendors for similar services that they may wish to use for ARP-funded work. The public expects that the local jurisdiction protected their interests, including ensuring that the vendor is qualified and that the towing charges are reasonable; and vendors expect open and fair competitive processes when a local jurisdiction contracts for a service that it needs. It is easy to become overwhelmed when determining how best to use this untapped resource. Please do not include personal or contact information. Implement internal controls to prevent fraud, waste and abuse. The Office of Management and Budget recently published guidance on how auditors should conduct Single Audits for ARPA Recovery Fund investments and the Emergency Rental Assistance Program County auditors should consult OMBs Compliance Supplement when constructing Single Audits for county investments of federal funds. We then use this data to improve the Massachusetts Certified Public Purchasing Official Program. 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. Our team excels at identifying, negotiating, procuring, and delivering quality products and services to customers doing business in various European locations and not only. Our confidential hotline is for public employees and individuals with Chapter 30B procurement questions. procurement, with 2 CFR 200.319(b) addressing engineering services procurement guidelines. 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. With more complete information, local government officials are now looking to finalize (at least some) expenditure decisions. The team needs the vendors support in order to get access to records and personnel, as well as to take action on findings. Remember that data is a broad concept, and that analyzing the many different kinds of data your jurisdiction collects every day can enhance your decision-making processes. Campus Box 3330 We also plan to give an overview of some of these techniques in the next article on data in an upcoming edition of the OIG Bulletin. There may be an acceptable explanation for the high number of change orders for that particular contract, but only further review can determine whether the change orders are reasonable. 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. This can lead to drawing incorrect conclusions about the data and documentation available. 3) Consider publishing all sole source requests for public notice. Webprocurement can be used. The question, therefore, is whether the project is for a public building or public work, not who is performing the work. Maintaining clear policies governing conflicts of interest for Each recipient should review program requirements, including Treasurys final rule and the recipients Award Terms and Conditions, to determine and record eligible uses of SLFRF funds. Through a vehicle towing and storage contract with a local jurisdiction, a vendor stands to generate substantial revenue by regularly towing and storing vehicles. Share sensitive information only on official, secure websites. When evaluating vendor invoices, jurisdictions may determine that some expenses require further review. Fraud audits encompass some or all of the elements of the above compliance audits, with a primary focus on the financial aspects and implications. With the upcoming Project and Expenditure Report deadline fast approaching on April 30, join NACo and Government Finance Officers Association for an overview of what you need to know when it comes to reporting for the American Rescue Plan Act (ARPA) Coronavirus State and Local Fiscal Recovery Fund. 12. Boilerplate audit clauses may inadvertently restrict the coverage of an audit or use vague terms that each party interprets differently, leading to disputes. Next, your organization will need to evaluate each subrecipients risk of noncompliance based on a set of common factors. February 2019 Procurement Bulletin Article. Benfords Law analysis: this analysis may highlight a vendor with billing discrepancies that warrant further review. Auditors should also be on alert for process owners who explain steps as they should be, or who respond using words such as usually, most of the time, supposed to or we try to. Commonwealth auditors should be cautious of auditees who are overly inquisitive and interested in what the audit team is looking for or why the vendor was selected for the audit. MOUs and MOAs should still include the required contract provisions, https://home.treasury.gov/system/files/136/SLFRF-Compliance-and-Reporting-Guidance.pdf, https://www.govregs.com/regulations/title2_chapterII_part200. Procurement and contracting requirements are in place as best practices to mitigate the risk of fraud, waste, or abuse of federal funds and are designed to ensure that federally funded contracts are competitive and fair. Is it something you can collect in the future? Copyright 2009 to Present School of Government at the University of North Carolina. Vendors may charge fees and raise prices over the course of a contract, only if the contract allows for the same. Ensure the agency received all of the purchased goods and services. 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. (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. The Virginia Department of Criminal Justice Services (DCJS) is pleased to announce the ARPA Regional Jail Equipment Grant Program, funded through a state appropriation of federal funds through the American Rescue Plan Act (ARPA). Use this button to show and access all levels. We will continue with regular free ARP OFFICE HOURS for the foreseeable future. For that reason it is not included in the Drop-in document. The Office of the Inspector General often reviews vendor invoices and other documents as part of its duty to prevent and detect fraud, waste and abuse. Our confidential hotline is for public employees and individuals with Chapter 30B procurement questions. The funds can be used to purchase equipment that improves or enhances the delivery of daily The OIG is developing classes to introduce local officials to specific data analysis techniques. For example, when reviewing payroll records, you notice that one employee reports working more hours than personnel have access to the building. 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. ARPA-funded projects must also adhere to North Carolina To use data in decision making, the data must exist in a format that can be analyzed. They are SLFRF recipients that will report directly to Treasury. Written procedures that do not meet UG standards must be revised to include these These are largely based on the type of contract, the goals of the audit, specific management concerns and other relevant variables. When people think of data, often electronic spreadsheets, number-crunching and data warehouses come to mind. The smallest incongruity could lead to the discovery of a large fraud. Some of the data within your organization may already be in an analyzable format. Before engaging with any vendor, do your research and review your contract closely. Quality of contracts and documents: identify vendors with poorly written contracts or payment documents. Justifying and documenting the selection of vendors, including: (1) that a vendor is responsive to the requirements outlined in the procurement, (2) responsible, (3) not debarred from doing business with the federal government, and (4) offering a reasonable, competitive cost, based on cost or price analysis completed by the municipality. 128, 40064-40068. It will include a detailed look at the various UG provisions and sample policies. A level and competitive playing field should exist for all service contracts, especially when a local jurisdiction creates a market for private vendors by prompting a demand. The contract did not entitle the vendor to charge an administrative fee and the housing authority rightly refused to pay it. Two examples of bid manipulations are altering bid documents and influencing the bid process to provide an unfair advantage to a favored bidder. If you determine a need for data that does notal readyexist, you can also create data. Incorporate by Ensuring that the contract structure is appropriate for the goods and/or services rendered, that prices are fair based on an independent cost or price analysis, and that a cost-plus-percentage-of-cost method is not used for federally-funded contracts. This blog post is published and posted online by the School of Government to address issues of interest to government officials. Proposals must be solicited from an adequate number of qualified offerors. 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. Share sensitive information only on official, secure websites. Webprocurement, with 2 CFR 200.319(b) addressing engineering services procurement guidelines. UNC Chapel Hill For example, someone from the public works department who supervises roadway paving should know whether the contractor completed the work and used the correct materials. Maintain open and direct communication with grantees. Every jurisdiction needs to review vendor payment requests to make sure they are accurate. 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 Additionally, establishing and maintaining open communication with grantees regarding grant requirements and expectations will help lead to successful project completion. See, e.g., 2 C.F.R. Publishing and documenting clear standards in procurement solicitations and evaluation criteria on how a municipality will determine a responsive and responsible. Municipalities should ensure that factors that may be overly restrictive to free and open competition are not included, such as placing unreasonable requirements on vendors to qualify or establishing any steps in the procurement process that are arbitrary or irrelevant to the award of contracts necessary and reasonable for the implementation of the use of funds under this award. We will update the policy if/when we receive more guidance from US Treasury. For example, a recipient may provide a subaward to a nonprofit to provide homeless services to individuals experiencing homelessness. See M.G.L. We will update the policy if/when we receive more guidance from US Treasury. c. 30B, 1(f). 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. Review the contract and be familiar with its terms. The record retention requirements for ARP/CSLFRF-related records are more stringent than those imposed under State law. Additional information about the definition of subrecipients is available in the section Distinguishing Subrecipients versus Beneficiaries. The feedback will only be used for improving the website. Review for overall risk mitigation, including insurance, indemnification, limitation and/or waiver of %PDF-1.6 % 2. Contracted work, as well as the delivery of goods and services, accounts for a large portion of the Commonwealths spending. Please do not include personal or contact information. If so, are there differences between the local and federal requirements that may be in conflict? People often make business decisions based on intuition, anecdotes or institutional lore. Massachusetts jurisdictions received over $25 billion through ARPA. ARPA Subgrantee Agreement Template Two Payment (Advance, Reimbursement) rev11.3.22, ARPA Subgrantee Agreement Template Reimbursement Based rev11.3.22, ARPA Subgrantee Agreement Template 100% Advance Payment (Very Rare-Special Circumstances) rev11.3.22, ARPA Subgrantee Agreement Template 25% Advance Payment rev11.3.22, ARPA Beneficiary Agreement Template rev11.3.22, SLFRF_Subgrantee_Budget_Exhibit 3_ 11.3.2022, SLFRF_Subgrantee_Invoice_Exhibit 4_11.3.2022. There are several techniques you could use to identify vendors to audit. Thank you for your website feedback! Knapp-Sanders Building That policy will accomplish three different goals: (1) General review that a cost item is reasonable, allowable, allocable, consistently treated, and properly documented; (2) Identification of cost item as direct or indirect; and (3) Specific review of certain identified cost items, for special treatment, justification, and/or documentation. 0 Assigning multiple witnesses to attend and attest to the proper bid opening. The right person to review an invoice depends on the type of contract, including its size and complexity. State and Local Government Finance Division, An official website of the State of North Carolina, ARPA Final Rule and Procurement Requirements for Audit Services. Various UG provisions and sample policies government at the various UG provisions and sample policies question. 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