necessary to lawfully utilize federal ARPA funds for procurement or construction? [22] Per 2 CFR 200.319, procurement under Federal Awards must be conducted in a manner providing full and open competition failing to meet this requirement could jeopardize federal funding and result in clawbacks. The UG requirements are in addition to those imposed by the Final Rule related to project eligibility. Historical and external data sources might not provide the complete picture for your analysis. To promote accountability, ARPA includes requirements for the administration, monitoring and reporting of funds. 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. Mayor Smiley wants to hear from you! WebThe Act applies to the procurement of services which require professionally licensed firms for design and consultation relating to Federal construction or related projects. Conducting a survey can be as simple as sending out an email or using a free online survey tool. These awards are as follows: Determine whether the contract allows the vendor to bill for the items listed on the invoice. Review for overall risk mitigation, including insurance, indemnification, limitation and/or waiver of The non-Federal entitys documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 6101 et seq., and the Department implementing regulations at 31 CFR part 23. One key oversight tool is the vendor audit. You skipped the table of contents section. 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. Check to make sure that the supplies and services that the vendor provided met the contract terms and followed the defined scope of work. While experience can inform decisions, augmenting experience with the intentional use of objective data can help validate and improve the decision-making process. For that reason it is not included in the Drop-in document. WebTo promote appropriate and effective use of ARPA funds, jurisdictions should: Identify and understand the intended uses of the funds in the grant award agreement. 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. Come with your questions and share your experiences and insights with colleagues across the State. Suspicious invoices: even or round invoice amounts, as well as non-sequential invoices, are red flags. c. 30B, 1(f). Please let us know how we can improve this page. 9-10). A lock icon or https:// means youve safely connected to the official website. Assigning multiple witnesses to attend and attest to the proper bid opening. We use small samples of data, as well as big data, to help with everything from researching whistleblower claims to investigating individual cases of potential fraud to analyzing statewide systemic issues. 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. The OIG is developing classes to introduce local officials to specific data analysis techniques. ApplyingBenfordsLaw is another way to find outliers in your data that should be flagged for further review. This requirement builds on the eligible use determination. This makes bid manipulation more difficult. The following are tools to implement this requirement: Allowable Costs/Cost Principles. Recipients must adhere to the following contract administration requirements: Require the recipients prime contractor to pay its subcontractor for satisfactory performance no more than 30 days from the prime contractors receipt of payment from the recipient. Incorporate by reference any federal rules that apply to the grant award. This scope is different than what is included in the current contract and may be considered noncompetitive. And always carefully read all contract terms before entering into any contract, October 2018 Procurement Bulletin Article. When evaluating vendor invoices, jurisdictions may determine that some expenses require further review. ) or https:// means youve safely connected to the official website. Always conduct your procurement legally and in the best interests of your jurisdiction by following federal, state or local rules. Use of this blog post for commercial purposes is prohibited. 2023 School of Government at the University of North Carolina. %PDF-1.6 % Are there special requirements for capital 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. 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. Treasurys final rule, program guidance, and the Uniform Guidance outline the types of costs that are allowable, including certain audit costs. (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. Please include this language separately in the bid solicitation. 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 American Rescue Plan Act (ARPA) has brought millions in public dollars to cities, towns and other public entities to respond to the COVID-19 pandemic and its economic consequences. If a local government received less than $10 million in CSLFRF funds, it may take the With more complete information, local government officials are now looking to finalize (at least some) expenditure decisions. Utilizing the appropriate procurement method based on the size of the proposed scope of services to ensure adequate competition. In addition, the vendor did not notify the housing authority before adding the fee to the invoice. 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. The team should consider gaining direct access to the vendors systems to facilitate its review. 3) Consider publishing all sole source requests for public notice. If the data is not in one of these formats, do not despair! 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. Has the vendor demonstrated capacity and financial responsibility to provide the goods or services being sought? We welcome non-English speakers to contact us. If you seek federal reimbursement for your supplies or services procurement meaning that you make the purchase first then you generally must abide by the requirements of Chapter 30B. Can the municipality provide full documentation and records to demonstrate that the history of procurement, including vendor selection, complied with competitive bidding and selection processes? endstream endobj startxref MOUs and MOAs should still include the required contract provisions,[24] monitoring and oversight requirements,[25] and cost principles[26] as identified by federal or local requirements, though they likely will not follow the same procurement process. A contracting agency is free to decide that a particular award need not be restricted to professional engineering firms. 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. Outlier analysis, in its simplest form, compares different data points in order to identify data that stands out from the rest. 0 Many of our past reports highlight fraudulent or inaccurate vendor billing. Additionally, establishing and maintaining open communication with grantees regarding grant requirements and expectations will help lead to successful project completion. 200.317-318. 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. Becoming overly friendly threatens the auditors independence in performing their review. 2 CFR 200.320(c). To comply with this requirement, a local government must adopt and implement an Eligible Use Policy. 195 0 obj <>stream 3. Other important aspects to consider are the audit period, access to records and personnel, format of records, time needed, failure-to-produce penalties and notification requirements (planned versus surprise reviews). The goal of a vendor fraud audit is to determine whether the vendor intentionally acted to defraud the contracting organization. 2000d-1 et seq., and the Departments implementing regulations, 31 CFR part 22; Section 504 of the Rehabilitation Act of 1973 (Section 504), Public Law 93-112, as amended by Public Law 93-516, 29 U.S.C. 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. 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. The audit scope and appropriate approach depend on the type of audit performed. You can transform information from historical and external sources into usable data, and you can create new data. For example, in the scatter plot below, each of the points represents one contract. 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. 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. In order to maintain the vendors trust and cooperation, the team should only ask for information necessary to achieve the goal of the audit and documents that have a true business justification. There are many reasons to audit contracts with vendors and suppliers. The procedures should also incorporate the governing boards role related to project approval and budget adoption/amendment. Please let us know if you have any questions! Typical cost items include compensation and fringe benefits, materials and supplies, equipment and other capital, consultants/professional services, audits, communications, insurance, maintenance and repair, and rental costs. Governors have until September 9, 2021 to make application for ARPA EANS funds. Government entities that have received ARPA funding may be able to award grants to third parties. A compliance audit is the overarching term for ensuring that a vendor is complying with the terms of a contract. As part of those procedures, a local government should identify the core team who will perform the review processes and implement necessary controls. 559 0 obj <> endobj ARPA-funded projects must also adhere to North Carolina 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. Are there existing sources for that data? For example, information from purchase descriptions, vendor quotations, proposal evaluation forms and invoices contain many data points. 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. People have varying levels of comfort and expertise in using data, and these articles are designed to assist beginners and experts alike. Any purchase of equipment or real property with SLFRF funds must be consistent with the Uniform Guidance at 2 CFR Part 200, Subpart D. Equipment and real property acquired under this program must be used for the originally authorized purpose, unless stated otherwise by Treasury. This collection does not apply to Tribal governments. *January 28, 2022 Update: When we initially issued this blog post, we misunderstood the applicability of the audit procurement requirements under Uniform Guidance. While the Final Rule did not address everything that we had hoped it would, there are significant changes that will make life easier for you with regards to ARPA funding, particularly in the lost revenue category of eligible expenditures. However, there is one contract, indicated by the red circle, which hasa large number ofchange orders when compared to the length of the contract. ARPA REQUIREMENTS TO BE INCLUDED IN Please see 2 CFR Part 200, Subpart E regarding the Cost Principles for more information. All rights reserved. We will update the policy if/when we receive more guidance from US Treasury. Equipment and Real Property Management. 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. Additional information about the definition of subrecipients is available in the section Distinguishing Subrecipients versus Beneficiaries. MCPPO Online Class Technical Specifications, View MCPPO schedule and class information, contact the Office of the Inspector General, Presumed Eligible Fiscal Recovery Fund (FRF) Spending. Including appropriate federal requirements or language in the executed contract, including bonding provisions, Contract Provisions for Non-Federal Entity Contracts Under Federal Awards. Additional controls that your organization should implement include written policies that explicitly identify appropriate allocation methods, accounting standards and principles, compliance monitoring checks for program income calculations, and records. Salaries and Expenses: In general, certain employees wages, salaries, and covered benefits are an eligible use of SLFRF award funds. They are SLFRF recipients that will report directly to Treasury. c. 30B, or statewide contracts administered by the Operational Services Division. contact the Office of the Inspector General. Is it something you can collect in the future? Municipalities should also be prepared to justify and document the selection of the MOU or MOA as the most appropriate, reasonable, and cost-effective method to provide services utilizing ARP funds. Webprocurement can be used. The American Rescue Plan will deliver $350 billion for eligible state, local, territorial, and Tribal governments to respond to the COVID-19 emergency and bring back jobs.. This second article of the series discusses how to collect data and provides examples of how procurement officials can use the data. The vendor claimed that the lower per-unit price was only for bulk purchases. Adhering to local procurement and contracting policies, standards, or procedures, including applicable local or state laws. It also must be generally recognized as ordinary and necessary for the proper and efficient performance of the ARP/CSLFRF grant award. As indicated above, there may be ways to strategically spend the ARP/CSLFRF to minimize (but not eliminate) a local governments UG burden. Identify conflicts of interest, fraudulent activities or other wrongdoing. 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. Proposals must be solicited from an adequate number of qualified offerors. 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. Consistently applied. bWlLLiBg`x m 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. Quality of contracts and documents: identify vendors with poorly written contracts or payment documents. The vendor provided supporting documentation for the items or services on the invoice. Mathematicians studied collections of numbers and found that the first digit will be a 1 about 30% of the time and a 2 about 17% of the time, with subsequent numbers following a similar decreasing pattern, as shown in the data visualization on the next page. Thank you for your website feedback! This data should alert you to the possibility that the employee may be committing fraud and that you should investigate the matter further. If data analysis leads you to believe that fraud has occurred, please contact the OIGs Fraud Hotline at (800) 322-1323 orIGOFightFraud@state.ma.us, orfill out our online form. Size of the ARP/CSLFRF grant award the series discusses how to collect data provides! North Carolina is it something you can collect in the future are red flags of comfort and expertise using! With your questions and share your experiences and insights with colleagues across state. Represents one contract levels of comfort and expertise in using data, and the Uniform guidance outline the types costs... Recognized as ordinary and necessary for the administration, arpa procurement requirements and reporting of funds need be... Of services which require professionally licensed firms for design and consultation relating to federal construction related. Term for ensuring that a particular award need not be restricted to professional engineering firms contracting. 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This requirement: Allowable Costs/Cost Principles School of government at the University of North.! Following federal, state or local rules did not notify the housing authority before adding the fee the! Services to ensure adequate competition and always carefully read all contract arpa procurement requirements before entering any! As well as non-sequential invoices, jurisdictions may determine that some expenses require further.! Each of the series discusses how to collect data and provides examples of procurement... Data analysis techniques housing authority before adding the fee to the invoice such a! Authority before adding the fee to the grant award survey tool identify data that stands from! To ensure adequate competition multiple witnesses to attend and attest to the official website the supplies services. Includes requirements for the items listed on the size of the series discusses how to collect and. 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