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Idaho Falls auditors give city a clean opinion but flag procurement control gap
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Summary
Auditors reported a clean (unmodified) opinion for fiscal 2025 but identified a significant deficiency in procurement controls: staff did not document suspension/debarment checks (SAM.gov) for multiple contracts. Staff proposed policy edits and training; council directed staff to return the procurement revisions for Thursdayconsideration.
City auditors presented a largely positive report to the Idaho Falls City Council on April 20, issuing a clean opinion on the city's fiscal year 2025 financial statements while identifying one notable compliance control gap. Kevin, an audit director with Baker Tilly, told the council the firm issued the unmodified opinion on April 2 and found no audit adjustments or evidence of fraud, waste or abuse.
But auditors reported a significant deficiency in the city's controls over federal-award procurements. Kevin said auditors tested seven procurements and could not find documentation that the city had checked the federal suspension-and-debarment database (SAM.gov) for five of those vendors and that some contracts lacked required non-debarment language. "We found that the city didn't check 5 of those contractors for suspension in the department," Kevin said, recommending the city add the check and the contract language to its procurement workflow.
Municipal services staff acknowledged the lapse and described steps already taken. The municipal services director said staff had incorporated a set of Baker Tillysuggested clarifications into the procurement policy and a crosswalk matrix to make federal-grant requirements more visible. Staff recommended adding a federal-check step at the time departments award contracts rather than later in finance and creating a checklist and training for grant managers.
Finance staff briefed council on the audit's other findings and on general fund composition. City staff explained that of the roughly $32 million cited as fund balance, about $8.2 million is unassigned and available for any purpose; other amounts are restricted, committed, or assigned to specific projects and reserves. "It doesn't mean that that some of those fundings could be repurposed," a finance presenter said, adding that the larger number is not fully unobligated.
Councilors pressed about immediate exposure to federal grants and the speed with which staff could implement the procedural changes. Staff said adding the sam.gov check and required contract language is operationally straightforward and that they will return a redlined procurement policy for the regular council meeting on Thursday. The council gave staff direction to finalize the procurement edits, add implementation training, and bring a clear redline showing changes from the March 30 work session.
Next steps: staff will return the revised procurement policy and crosswalk on Thursday and recommended operational checklists/training will be phased in as departments prepare for federal-grant activity.
