The goal of a vendor fraud audit is to determine whether the vendor intentionally acted to defraud the contracting organization. The following ter ms and conditions apply to you, the contractor or vendor, as a contractor of the City of Madison, according to the Citys Award Terms and Conditions signe d on May 11, 2021; by ARPA and its Because ARP/CSLFRF in the revenue replacement category may be spent on any government service authorized under state law (assuming allowable cost items), a local government may use ARP/CSLFRF to supplant employees salaries and benefits during the award term, thus freeing up general fund or enterprise fund monies to be spent on more complex capital projects or programs. procurement policies pursuant to 2 CFR 200.317 as well as comply with the procurement standards set forth at 2 CFR 200.321 through 2 CFR 200.323, and 2 CFR 200.327. Please let us know how we can improve this page. If this fails, contact your local jurisdictions legal counsel because the vendor may have breached the contract. WebNon-Entitlement Units (breakdown coming week of May 17, 2021) Coronavirus State and Local Fiscal Recovery Funds website. For example, when reviewing payroll records, you notice that one employee reports working more hours than personnel have access to the building. The jurisdiction placed an order with the vendor for these supplies because of the competitive low per-unit price. WebWhen it comes to using ARPA funds, there are layers of rules towns have to follow (the U.S. Treasury says so right here on page 8): - Local procurement rules - New York State Top-requested sites to log in to services provided by the state. Additionally, establishing and maintaining open communication with grantees regarding grant requirements and expectations will help lead to successful project completion. If you need assistance, please contact the Office of the Inspector General. Confirm that someone from the jurisdiction has inspected the work or supplies and determined that they meet the terms of the contract. %PDF-1.6 % Also, remember the following: 1. Check to make sure that the supplies and services that the vendor provided met the contract terms and followed the defined scope of work. Massachusetts jurisdictions received over $25 billion through ARPA. Tie grant disbursements to deliverables, milestones or other reportable actions when possible. Ensure compliance with policies, procedures, rules, regulations and legal requirements. 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. Use this button to show and access all levels. Please remove any contact information or personal data from your feedback. This day course provides an overview of the legal requirements in managing the ARP/CSLFRF award. As mentioned below, we are working on detailed roadmaps to help local governments know when/how to implement each policy based on specific expenditure decisions. The course will have three parts, including brief overview videos, a 1-day live (Zoom) workshop, and extended daily Zoom Help Desk Office Hours the last two weeks of April (to help with implementation issues and completion of the Project & Expenditure report due by April 30). The jurisdiction became suspicious, researched the vendor and found no registration information on file with the Secretary of Commonwealth. You can find the full rule (all 437 pages of it) here and a brief overview (only 44 pages) here. Past performance: for example, businesses previously on state or federal suspension or debarment lists may pose a greater risk of noncompliance or poor performance. To promote appropriate and effective use of ARPA funds, jurisdictions should: Jurisdictionsshould also develop evidence-based methods of measuring performance and project goals to make sure that grantees meet those expectations. Once the audit team selects the type of audit to perform, the team must clearly prepare an audit plan and outline the expected audit procedures. In that case, the vendor offered to provide the jurisdiction with the towing and storage services at no cost. Exceptions to requirements for small purchase or formal method competitive rules. If not, many of the bid documents your jurisdiction retains can be used as data sources. To ensure that the cost items within an eligible project are proper, a local government must adopt and implement an Allowable Costs and Cost Principles Policy. This may include justification of exigent or emergency circumstances, imminent threat to public health and safety, or substantive demonstration that no alternatives were feasible. With the addition of the standard allowance, authorizing many NC local governments to expend their entire ARP/CSLFRF allocation for almost any purpose authorized by state law, counties and municipalities across the state have an even greater opportunity to make the best strategic investments for their communities with these one-time funds. Before engaging with any vendor, do your research and review your contract closely. 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. It is intended to change the course of the COVID-19 pandemic, provide direct relief to Americans, and build a bridge to equitable economic recovery. The data from these documents can be combined to help make decisions about the award of future contracts. WebSubpart F, Audit Requirements (UG single audit required when a non-Federal entity expends more than $750,000 in federal financial assistance in a fiscal year (the $750,000 threshold includes the total expenditures from all federal awards)). Finally, Kara hosted SOG Office Hours on Jan. 13, 2022, and the primary topic was the Final Rule and the change in lost revenue calculations. 200.319-320 (describing the competitive processes required for procurements made with federal funds). WebThe Department of Education posted final requirements on ARPA ESSER in July 2021. Alternatively, if the recipient does not have a NICRA, the recipient may elect to use the de minimis rate of 10 percent of the modified total direct costs pursuant to 2 CFR 200.414(f). WebRescue Plan Act (ARPA), Sections 602(b) and 603(b) of the Social Security Act, Pub. Extending the contract to include additional time may be deemed noncompetitive, because the contract expired before services began. After the official bid opening requiring a review of the bid submittals and verification of the bid results by a party not involved in the bid process. Including right-to-audit clauses in vendor contracts and then performing effective audits can help reduce these risks. And always be vigilant in reviewing invoices for appropriate charges as a standard part of your contract administration process. If you need assistance, please contact the Office of the Inspector General. Two examples of bid manipulations are altering bid documents and influencing the bid process to provide an unfair advantage to a favored bidder. Jurisdictions must remain vigilant in reviewing vendor documents to ensure that they get what they need and that public funds are properly expended. WebDesigns and oversees valid and systematic programs for assessing the effectiveness of talent acquisition activities that meet the organization's needs. Thank you for your website feedback! Is there a strategic way to expend CSLFRF funds (i.e., how do we make the best use of funds and trigger the fewest compliance requirements)? We will use this information to improve this page. If the vendor has subcontracted out any work, the audit team should also distinguish whether it will be reviewing the contractors or subcontractors performance. ARPA-funded projects must also adhere to North Carolina WebGeneral Requirements for Procurement Programs . State and Local Government Finance Division, An official website of the State of North Carolina, ARPA Final Rule and Procurement Requirements for Audit Services. The results of the survey can be transferred to a spreadsheet. Properly documented. x@AP,(Qm -R`PF%LGd8X1`ol: +t0@]-]~W,4 XC! $@a To learn more, view our full privacy policy. Appendix 1: Allowable Use Matrix Background On March 11, 2021, the American Rescue Plan Act (ARPA) of 2021 was signed into law. Some of the data within your organization may already be in an analyzable format. 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. 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. Confirm that the vendor billed at the rates stated in the contract or purchase order. For example, verify the following: The items on the invoice are allowed by contract specifications and the defined scope of work. This scope is different than what is included in the current contract and may be considered noncompetitive. of the Award Terms and Conditions, Accessibility: Report a Digital Access Issue, Allowable Costs and Cost Principles Policy, Financial Management and Internal Controls, Program Income Policy (if local government uses ARP/CSLFRF funds to establish a loan program or otherwise earns income related to an ARP/CSLFRF expenditure), Procurement Policy (if a local government contracts for goods or services paid for with ARP/CSLFRF funds, or must engage in a Single Audit (even if the audit is paid for with other funds)), Property Management Policy (if a local government uses ARP/CLSFRF to acquire or improve any real property, equipment, or supplies), Subaward Policy (if a local government partners with another government, nonprofit, or other private entity to carry out an ARP/CSLFRF-eligible project), Thursday, March 24, at 8:30am (focus on affordable housing). The ARPA program requires recipients to comply with the procurement provisions of Title 2, Part 200 of the Code of Federal The standard allowance is available to all counties, including ones with allocations under $10 million. Suggestions are presented as an open option list only when they are available. Once the data has been transformed into auser-friendlyformat, it can be used in a variety of ways to assist with future procurements and other business decisions. 9-10). Administrative costs: Recipients may use funds for administering the SLFRF program, including costs of consultants to support effective management and oversight, including consultation for ensuring compliance with legal, regulatory, and other requirements. These are common red flags for potential fraud and abuse. 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 The majority of these goods and services are purchased using the Uniform Procurement Act, M.G.L. Final approval for sole source procurement requests in most states resides with the Chief Procurement Official. Treasury may request that recipients submit data for post-award compliance reviews, including information such as a narrative describing their Title VI compliance status. The feedback will only be used for improving the website. 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. Noncompetitive procurement is only allowed if certain criteria are met. WebA nonfederal entity with federal expenditures in excess of $750,000 is required by law to have a single audit completed. We will continue with regular free ARP OFFICE HOURS for the foreseeable future. ARPA REQUIREMENTS TO BE INCLUDED IN To comply with this requirement, a local government must adopt and implement an Eligible Use Policy. WebARPA established the Coronavirus State and Local Fiscal Recovery Fund (CSLFRF), which is a a program that provides funding over a two-year period to all states, counties, and After reviewing and analyzing data, managers can follow up and review more information, identify issues and resolve them. There are several techniques you could use to identify vendors to audit. This blog post highlights the UG requirements and provides several sample policies and other implementation tools. Review the contract and be familiar with its terms. The audit team should also obtain buy-in and support from the vendors management before initiating the audit. When procuring goods or services, the state agency or municipal department typically executes a contract with the vendor to outline the scope of the parties agreement. ARPA-funded projects must also adhere to North Carolina state law, Then you can compile this information into a data-friendly format, like a spreadsheet. hbbd```b`` DHl"Yn H2|+H3$00M 2@ o. This page is located more than 3 levels deep within a topic. If you are used to having a financial statement audit, a single audit can be much more comprehensive. Consistent with 2 CFR 200.311 and 2 CFR 200.313, any equipment or real property acquired using SLFRF funds shall vest in the non- Federal entity, consistent with any guidance that Treasury may issue. First, your organization must clearly identify to the subrecipient: (1) that the award is a subaward of SLFRF funds; (2) any and all compliance requirements for use of SLFRF funds; and (3) any and all reporting requirements for expenditures of SLFRF funds. 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 most cases, city procurement Each category of cost should be treated consistently in like circumstances as direct or indirect, and recipients may not charge the same administrative costs to both direct and indirect cost categories, or to other programs. The contract calls for reimbursement on a time-and-materials basis or scheduled fixed payments. Restricting access to the submitted bids. Per 2 CFR Part 200.303, your organization must develop and implement effective internal controls to ensure that funding decisions under the SLFRF award constitute eligible uses of funds, and document determinations. State Government websites value user privacy. Request vendor timekeeping records if needed. Jurisdictions should only make payments after reviewing all invoices and supporting documentation for accuracy and completeness. 3. Procurement data can also help detect fraud, such as bid splitting and potential bid rigging. A lock icon ( 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. 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. 2. 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. We welcome non-English speakers to contact us. [1] These requirements outline the general standards and regulations for the procurement of goods and services for recipients and subrecipients of federally awarded funds. Generally, Chapter 30B applies even when a local jurisdiction uses federal funds to pay for supplies or services. (For instance, the Department of Justice (DOJ) publishes a guide to procurements using DOJ grant funds.). For example, a municipality may have an engineering and construction firm contracted to build a new community center and wants to use the same firm to perform citywide water and sewer infrastructure projects as permitted by the CLFRF. 6101 et seq., and the Department implementing regulations at 31 CFR part 23. Some information may be in spreadsheets or in existing databases or electronic systems. 200.317, 200.322, and 200.326. Suspicious invoices: even or round invoice amounts, as well as non-sequential invoices, are red flags. 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. Municipalities may explore utilizing existing MOUs or MOAs, or establishing new MOUs or MOAs, with non-profits and public entities to provide additional services utilizing existing MOUs or MOAs, or establishing new MOUs or MOAs, with non-profits or public entities to provide additional services utilizing ARP funding. Fraud audits encompass some or all of the elements of the above compliance audits, with a primary focus on the financial aspects and implications. Requirements for bidders and contractors under this order are explained in the specifications. Note: This language must be included in the Bid solicitation. Is the contract active and does it include the goods or services being sought? 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. 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. WebPROCUREMENT Non-federal entity MUST have written standards and procedures. If so, are there differences between the local and federal requirements that may be in conflict? WebARPA Policy and Procedures Manual. 4. Next, your organization will need to evaluate each subrecipients risk of noncompliance based on a set of common factors. 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. The policy should be drafted with Chapter 30B principles in mind and should ensure that you allow for an open, fair and competitive process. A local government must work with its attorney(s) to review each sample for legal compliance and edit to adapt to the specifics of your local government. Requirements for bidders and contractors under this order are explained in the specifications. Note: This language must be included in the Bid solicitation. The prevention and detection of fraud, waste and abuse of public funds always an important issue for government entities is even more critical now that jurisdictions are receiving billions of additional dollars in ARPA funding. Please let us know how we can improve this page. Suggestions are presented as an open option list only when they are available. The non-Federal entitys documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. We hope that this article has encouraged you to use data analysis more in your work. Incorporate by reference any federal rules that apply to the grant award. If your contract does not permit the vendor to charge a specific fee, then your jurisdiction has a basis for contesting the application of any additional fee. contact the Office of the Inspector General. (Please note the email notification for new blog posts from the SOG is not functioning correctly at this time.). To use data in decision making, the data must exist in a format that can be analyzed. Most Commonwealth agencies and municipalities rely on vendors to supply the goods and services they need to operate. ApplyingBenfordsLaw is another way to find outliers in your data that should be flagged for further review. Can the municipality clearly document and justify the reasoning to utilize an existing vendor relationship in lieu of following normal procurement and contracting processes? 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. 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). If you would like to continue helping us improve Mass.gov, join our user panel to test new features for the site. The funds can be used to purchase equipment that improves or enhances the delivery of daily Look for those in the coming weeks. Many of our past reports highlight fraudulent or inaccurate vendor billing. 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. 165 0 obj <> endobj 1681 et seq., and the Departments implementing regulations, 31 CFR part 28; Age Discrimination Act of 1975, Public Law 94-135, 42 U.S.C. 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. Right-to-audit clauses should be specific, yet not overly restrictive, to allow the procuring entity the ability to interview key vendor personnel and review applicable documentation and records. 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. [2] 2 CFR 200.317-327, available at https://www.govregs.com/regulations/title2_chapterII_part200. Share sensitive information only on official, secure websites. 601 0 obj <>stream Please remove any contact information or personal data from your feedback. Bid manipulation can also include allowing a vendor to submit bid documents after the public deadline or disclosing offers made by one vendor to another before the bids are opened publicly. Further, costs must be reasonable and allocable as outlined in 2 CFR 200.404 and 2 CFR 200.405. 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. Some page levels are currently hidden. As required under 2 CFR 200, a local governments procurement program must address the following: Full and Open Those requirements include ensuring that entities receiving Federal financial assistance from the Treasury do not deny benefits or services, or otherwise discriminate [4] Department of Treasury, Coronavirus State and Local Fiscal Recovery Funds: Guidance on Recipient Compliance and Reporting Responsibilities, at 8, available at https://home.treasury.gov/system/files/136/SLFRF-Compliance-and-Reporting-Guidance.pdf and 2 CFR 200.318(a). Implement internal controls to prevent fraud, waste and abuse. You skipped the table of contents section. Likewise, auditors and investigators should be prepared for individuals who become angry or aggressive in response to routine questions, or key vendor personnel who disappear during a critical part of the audit. Within the Office, we have learned through experience that a wide range of staff with varied backgrounds can use data effectively. Are there existing sources for that data? %%EOF The question, therefore, is whether the project is for a public building or public work, not who is performing the work. 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). Public contracts account for a significant portion of every jurisdictions annual budget. The following is a sample policy to address any program income: Note that there are some grey areas related to how to identify program income, particularly fees for services assessed for water, sewer, or broadband assets constructed or improved with ARP/CSLFRF monies. If a vendor is not registered beware. This course is targeted to finance and management staff of smaller and mid-sized units that will be taking the standard allowance and spending most, if not all, of their ARP/CSLFRF as revenue replacement. Federal procurement laws and regulations typically require that you use a fair, open and competitive process, even though price thresholds, advertising requirements and contract award language may differ from the requirements of Chapter 30B.

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