Audit 16278

2022-001 U.S. Department of Housing and Urban Development Federal Financial Assistance Listing #14.134 Mortgage Insurance Rental Housing Procurement, Suspension, and Debarment Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CRF 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The non-Federal entity?s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327 which also requires documentation to be retained to detail the history of procurements. In addition, as outlined in 2 CFR 180, recipients must not utilize any vendor which is suspended or debarred or is otherwise excluded from the central contactor registry. Condition: The Project does not have a written procurement policy which conforms to Uniform Guidance as outlined above. During the year, management entered into transactions over the micropurchase threshold with eight vendors. Documentation was unable to be provided to support procurement compliance for seven vendors. In addition, there was one vendor with expenditures in excess of $25,000 and the Project did not verify the vendor against the central contractor registry prior to entering into the transaction or on a periodic basis to ensure that the vendor was not suspended or debarred. Cause: Management does not have a written procurement policy in accordance with Uniform Guidance. Certain procedures were in place; however, without a written policy to follow, the auditors were unable to determine if the procedures for procurement, suspension, and debarment compliance for the vendors was adequate. Effect: Inadequate controls over this area of compliance result in a reasonable possibility that the Project would not have the required documentation in place and would not be able to detect and correct noncompliance in a timely manner. Questioned Costs: We were unable to determine known questioned costs. During the year, management entered into transactions over the micropurchase threshold with eight vendors totaling approximately $92,000. Context/Sampling: No sampling was used. Procurement requirements were applicable to 8 transactions (all transactions were reviewed and tested) and suspension and debarment requirements were applicable to one vendor. Repeat Finding from Prior Year: No Recommendation: We recommend management review the procurement policy requirements under Uniform Guidance and adopt a procurement policy in accordance with Uniform Guidance requirements. In addition, we also recommend management implement formal procedures over procurement, suspension and debarment in accordance with that policy and retain sufficient documentation to support the process was followed. Views of Responsible Officials: Management agrees with the finding and recommendation.

2022-001 U.S. Department of Housing and Urban Development Federal Financial Assistance Listing #14.134 Mortgage Insurance Rental Housing Procurement, Suspension, and Debarment Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CRF 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The non-Federal entity?s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327 which also requires documentation to be retained to detail the history of procurements. In addition, as outlined in 2 CFR 180, recipients must not utilize any vendor which is suspended or debarred or is otherwise excluded from the central contactor registry. Condition: The Project does not have a written procurement policy which conforms to Uniform Guidance as outlined above. During the year, management entered into transactions over the micropurchase threshold with eight vendors. Documentation was unable to be provided to support procurement compliance for seven vendors. In addition, there was one vendor with expenditures in excess of $25,000 and the Project did not verify the vendor against the central contractor registry prior to entering into the transaction or on a periodic basis to ensure that the vendor was not suspended or debarred. Cause: Management does not have a written procurement policy in accordance with Uniform Guidance. Certain procedures were in place; however, without a written policy to follow, the auditors were unable to determine if the procedures for procurement, suspension, and debarment compliance for the vendors was adequate. Effect: Inadequate controls over this area of compliance result in a reasonable possibility that the Project would not have the required documentation in place and would not be able to detect and correct noncompliance in a timely manner. Questioned Costs: We were unable to determine known questioned costs. During the year, management entered into transactions over the micropurchase threshold with eight vendors totaling approximately $92,000. Context/Sampling: No sampling was used. Procurement requirements were applicable to 8 transactions (all transactions were reviewed and tested) and suspension and debarment requirements were applicable to one vendor. Repeat Finding from Prior Year: No Recommendation: We recommend management review the procurement policy requirements under Uniform Guidance and adopt a procurement policy in accordance with Uniform Guidance requirements. In addition, we also recommend management implement formal procedures over procurement, suspension and debarment in accordance with that policy and retain sufficient documentation to support the process was followed. Views of Responsible Officials: Management agrees with the finding and recommendation.