Finding 2023-003: Suspension and Debarment
Information About the Program: All Programs
Criteria: As stated in 2 CFR §200.303, the non-Federal entity (i.e. NFHA) must establish and
maintain effective internal control over the Federal award that provides reasonable assurance that
the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations and terms and conditions of the Federal award. These internal controls should be in
compliance with guidance in “Standards for Internal Control in the Federal Government” issued by
the Comptroller General of the United States or in the “Internal Control Integrated Framework”
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
According to 2 CFR §200.214, the non-Federal entity is subject to the non-procurement debarment
and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The
regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are
debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance
programs or activities.
Condition: During our audit, we noted NFHA did not perform checks via SAM.gov to ensure that
potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such
parties increases the possibility that U.S. Government funds may inadvertently be provided to
individuals or organizations deemed to be excluded by the U.S. Government.
Cause: Management did not have effective internal controls in place to ensure that suspension and
debarment checks were being performed prior to entering into contracts with vendors or contractors/
consultants.Potential Effect: NFHA is exposed to an increased risk that future noncompliance could occur by
entering into transactions with vendors, contractors, or consultants that are suspended, debarred, or
otherwise excluded from contracting with the U.S. Federal Government. If a non-Federal entity
knowingly does business with an excluded person, the agency responsible for NFHA's funding may
disallow costs, annul or terminate the transaction, issue a stop work order, debar or suspend NFHA,
or take other remedies as appropriate.
Questioned Costs: None.
Context: NFHA failed to perform its due diligence with respect to these requirements. The issue is
considered systemic in nature.
Identification as a Repeat Finding: Not applicable.
Recommendation: We recommend NFHA implement internal controls to ensure that all vendors,
contractors, and consultants are screened for suspension and debarment prior to entering into any
executed contract. We further recommend that a policy be formalized and implemented that requires
an annual screening, at a minimum, of any current vendors, contractors, or consultants as well.
Finding 2023-004: Procurement
Information About the Program: All Programs
Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) Establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-
Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and
the terms and conditions of the Federal award. These internal controls should be in compliance with
guidance in Standards for Internal Control in the Federal Government issued by the Comptroller
General of the United States or the internal Control Integrated Framework, issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO).
Additionally, according to 2 CFR §200.318 Procurement standards, the non-Federal entity must
maintain records sufficient to detail the history of procurement. These records will include, but are
not necessarily limited to, the following: Rationale for the method of procurement, selection of
contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A
Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the
acquisition of property or services required under a Federal award must be conducted in a manner
providing full and open competition consistent with the standards of this section and §200.320. The
non-Federal entity must have written procedures for procurement transactions. These procedures
must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical
requirements for the material, product, or service to be procured. Such description must not, in
competitive procurements, contain features which unduly restrict competition. The description may
include a statement of the qualitative nature of the material, product or service to be procured and,
when necessary, must set forth those minimum essential characteristics and standards to which it
must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in
accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which
noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one
or more of the following circumstances apply:
1. The acquisition of property or services, the aggregate dollar amount of which does not exceed
the micro-purchase threshold (see paragraph (a)(1) of this section);
2. The item is available only from a single source;
3. The public exigency or emergency for the requirement will not permit a delay resulting from
publicizing a competitive solicitation;
4. The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive
procurement in response to a written request from the non-Federal entity; or
5. After solicitation of a number of sources, competition is determined inadequate.
Condition: During our testing over procurement, we determined NFHA did not clearly document the
rationale for the method of procurement, selection of contract type, contractor selection or rejection,
and the basis for the contract price. In addition, for noncompetitive procurements, there was no
documentation to support which of the five criteria was met to allow for the noncompetitive
procurement.
Cause: Management did not have effective internal controls in place to ensure that procurement
requirements were adequately documented and retained.
Effect: Procurement records were insufficient to meet the requirements noted in the Criteria section
above, as well as NFHA's internal procurement policy.
Questioned Costs: None.
Context: We noted that several items selected for testing did not document the rationale for the
method of procurement, selection of contract type, contractor selection or rejection, and the basis for
the contract price. In addition, we noted that several items selected for testing for noncompetitive
procurements did not maintain documentation of which of the five criteria were met to allow for the
noncompetitive procurement.
Identification as a Repeat Finding: Not applicable.
Recommendation: We recommend NFHA update its policies to treat Federal and non-Federal
procurement the same and ensure compliance with Uniform Guidance. NFHA should retain sufficient
procurement documentation to meet the requirements noted in the Criteria section above.
Finding 2023-005: Reporting
Information About the Program: All Programs
Criteria: Grantor requires NFHA to submit financial and programmatic reports in accordance with
the schedules indicated in its grant agreements. Internal controls should provide management with
the ability to report the measurement of the recipient's performance to show achievement of program
goals and objectives, share lessons learned, improve program outcomes, and foster adoption of
promising practices (2 CFR §200.301(a)). NFHA's financial management systems, including records
documenting compliance with Federal statutes, regulations, and the terms and conditions of the
Federal award, must be sufficient to permit the preparation of reports required by general and
program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate
to establish that such funds have been used according to the Federal statutes, regulations, and the
terms and conditions of the Federal award.
Condition: During our audit, we noted that there is no documented review specifically on
programmatic reports.
Cause: Programmatic reports are reviewed along with financial reports, but there is no formal
documentation to verify programmatic reports were reviewed before submission.
Effect or Potential Effect: The performance progress according to the Federal award(s) may not be
monitored, thus having potential unallowable costs or unallowable activities.
Questioned Costs: None.
Context: Programmatic reports did not have documented approval.
Identification as a Repeat Finding: Not applicable.
Recommendation: We also recommend NFHA implement a formal and documented review and
approval process over programmatic reporting.
Finding 2023-003: Suspension and Debarment
Information About the Program: All Programs
Criteria: As stated in 2 CFR §200.303, the non-Federal entity (i.e. NFHA) must establish and
maintain effective internal control over the Federal award that provides reasonable assurance that
the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations and terms and conditions of the Federal award. These internal controls should be in
compliance with guidance in “Standards for Internal Control in the Federal Government” issued by
the Comptroller General of the United States or in the “Internal Control Integrated Framework”
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
According to 2 CFR §200.214, the non-Federal entity is subject to the non-procurement debarment
and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The
regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are
debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance
programs or activities.
Condition: During our audit, we noted NFHA did not perform checks via SAM.gov to ensure that
potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such
parties increases the possibility that U.S. Government funds may inadvertently be provided to
individuals or organizations deemed to be excluded by the U.S. Government.
Cause: Management did not have effective internal controls in place to ensure that suspension and
debarment checks were being performed prior to entering into contracts with vendors or contractors/
consultants.Potential Effect: NFHA is exposed to an increased risk that future noncompliance could occur by
entering into transactions with vendors, contractors, or consultants that are suspended, debarred, or
otherwise excluded from contracting with the U.S. Federal Government. If a non-Federal entity
knowingly does business with an excluded person, the agency responsible for NFHA's funding may
disallow costs, annul or terminate the transaction, issue a stop work order, debar or suspend NFHA,
or take other remedies as appropriate.
Questioned Costs: None.
Context: NFHA failed to perform its due diligence with respect to these requirements. The issue is
considered systemic in nature.
Identification as a Repeat Finding: Not applicable.
Recommendation: We recommend NFHA implement internal controls to ensure that all vendors,
contractors, and consultants are screened for suspension and debarment prior to entering into any
executed contract. We further recommend that a policy be formalized and implemented that requires
an annual screening, at a minimum, of any current vendors, contractors, or consultants as well.
Finding 2023-004: Procurement
Information About the Program: All Programs
Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) Establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-
Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and
the terms and conditions of the Federal award. These internal controls should be in compliance with
guidance in Standards for Internal Control in the Federal Government issued by the Comptroller
General of the United States or the internal Control Integrated Framework, issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO).
Additionally, according to 2 CFR §200.318 Procurement standards, the non-Federal entity must
maintain records sufficient to detail the history of procurement. These records will include, but are
not necessarily limited to, the following: Rationale for the method of procurement, selection of
contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A
Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the
acquisition of property or services required under a Federal award must be conducted in a manner
providing full and open competition consistent with the standards of this section and §200.320. The
non-Federal entity must have written procedures for procurement transactions. These procedures
must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical
requirements for the material, product, or service to be procured. Such description must not, in
competitive procurements, contain features which unduly restrict competition. The description may
include a statement of the qualitative nature of the material, product or service to be procured and,
when necessary, must set forth those minimum essential characteristics and standards to which it
must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in
accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which
noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one
or more of the following circumstances apply:
1. The acquisition of property or services, the aggregate dollar amount of which does not exceed
the micro-purchase threshold (see paragraph (a)(1) of this section);
2. The item is available only from a single source;
3. The public exigency or emergency for the requirement will not permit a delay resulting from
publicizing a competitive solicitation;
4. The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive
procurement in response to a written request from the non-Federal entity; or
5. After solicitation of a number of sources, competition is determined inadequate.
Condition: During our testing over procurement, we determined NFHA did not clearly document the
rationale for the method of procurement, selection of contract type, contractor selection or rejection,
and the basis for the contract price. In addition, for noncompetitive procurements, there was no
documentation to support which of the five criteria was met to allow for the noncompetitive
procurement.
Cause: Management did not have effective internal controls in place to ensure that procurement
requirements were adequately documented and retained.
Effect: Procurement records were insufficient to meet the requirements noted in the Criteria section
above, as well as NFHA's internal procurement policy.
Questioned Costs: None.
Context: We noted that several items selected for testing did not document the rationale for the
method of procurement, selection of contract type, contractor selection or rejection, and the basis for
the contract price. In addition, we noted that several items selected for testing for noncompetitive
procurements did not maintain documentation of which of the five criteria were met to allow for the
noncompetitive procurement.
Identification as a Repeat Finding: Not applicable.
Recommendation: We recommend NFHA update its policies to treat Federal and non-Federal
procurement the same and ensure compliance with Uniform Guidance. NFHA should retain sufficient
procurement documentation to meet the requirements noted in the Criteria section above.
Finding 2023-005: Reporting
Information About the Program: All Programs
Criteria: Grantor requires NFHA to submit financial and programmatic reports in accordance with
the schedules indicated in its grant agreements. Internal controls should provide management with
the ability to report the measurement of the recipient's performance to show achievement of program
goals and objectives, share lessons learned, improve program outcomes, and foster adoption of
promising practices (2 CFR §200.301(a)). NFHA's financial management systems, including records
documenting compliance with Federal statutes, regulations, and the terms and conditions of the
Federal award, must be sufficient to permit the preparation of reports required by general and
program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate
to establish that such funds have been used according to the Federal statutes, regulations, and the
terms and conditions of the Federal award.
Condition: During our audit, we noted that there is no documented review specifically on
programmatic reports.
Cause: Programmatic reports are reviewed along with financial reports, but there is no formal
documentation to verify programmatic reports were reviewed before submission.
Effect or Potential Effect: The performance progress according to the Federal award(s) may not be
monitored, thus having potential unallowable costs or unallowable activities.
Questioned Costs: None.
Context: Programmatic reports did not have documented approval.
Identification as a Repeat Finding: Not applicable.
Recommendation: We also recommend NFHA implement a formal and documented review and
approval process over programmatic reporting.
Finding 2023-003: Suspension and Debarment
Information About the Program: All Programs
Criteria: As stated in 2 CFR §200.303, the non-Federal entity (i.e. NFHA) must establish and
maintain effective internal control over the Federal award that provides reasonable assurance that
the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations and terms and conditions of the Federal award. These internal controls should be in
compliance with guidance in “Standards for Internal Control in the Federal Government” issued by
the Comptroller General of the United States or in the “Internal Control Integrated Framework”
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
According to 2 CFR §200.214, the non-Federal entity is subject to the non-procurement debarment
and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The
regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are
debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance
programs or activities.
Condition: During our audit, we noted NFHA did not perform checks via SAM.gov to ensure that
potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such
parties increases the possibility that U.S. Government funds may inadvertently be provided to
individuals or organizations deemed to be excluded by the U.S. Government.
Cause: Management did not have effective internal controls in place to ensure that suspension and
debarment checks were being performed prior to entering into contracts with vendors or contractors/
consultants.Potential Effect: NFHA is exposed to an increased risk that future noncompliance could occur by
entering into transactions with vendors, contractors, or consultants that are suspended, debarred, or
otherwise excluded from contracting with the U.S. Federal Government. If a non-Federal entity
knowingly does business with an excluded person, the agency responsible for NFHA's funding may
disallow costs, annul or terminate the transaction, issue a stop work order, debar or suspend NFHA,
or take other remedies as appropriate.
Questioned Costs: None.
Context: NFHA failed to perform its due diligence with respect to these requirements. The issue is
considered systemic in nature.
Identification as a Repeat Finding: Not applicable.
Recommendation: We recommend NFHA implement internal controls to ensure that all vendors,
contractors, and consultants are screened for suspension and debarment prior to entering into any
executed contract. We further recommend that a policy be formalized and implemented that requires
an annual screening, at a minimum, of any current vendors, contractors, or consultants as well.
Finding 2023-004: Procurement
Information About the Program: All Programs
Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) Establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-
Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and
the terms and conditions of the Federal award. These internal controls should be in compliance with
guidance in Standards for Internal Control in the Federal Government issued by the Comptroller
General of the United States or the internal Control Integrated Framework, issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO).
Additionally, according to 2 CFR §200.318 Procurement standards, the non-Federal entity must
maintain records sufficient to detail the history of procurement. These records will include, but are
not necessarily limited to, the following: Rationale for the method of procurement, selection of
contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A
Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the
acquisition of property or services required under a Federal award must be conducted in a manner
providing full and open competition consistent with the standards of this section and §200.320. The
non-Federal entity must have written procedures for procurement transactions. These procedures
must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical
requirements for the material, product, or service to be procured. Such description must not, in
competitive procurements, contain features which unduly restrict competition. The description may
include a statement of the qualitative nature of the material, product or service to be procured and,
when necessary, must set forth those minimum essential characteristics and standards to which it
must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in
accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which
noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one
or more of the following circumstances apply:
1. The acquisition of property or services, the aggregate dollar amount of which does not exceed
the micro-purchase threshold (see paragraph (a)(1) of this section);
2. The item is available only from a single source;
3. The public exigency or emergency for the requirement will not permit a delay resulting from
publicizing a competitive solicitation;
4. The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive
procurement in response to a written request from the non-Federal entity; or
5. After solicitation of a number of sources, competition is determined inadequate.
Condition: During our testing over procurement, we determined NFHA did not clearly document the
rationale for the method of procurement, selection of contract type, contractor selection or rejection,
and the basis for the contract price. In addition, for noncompetitive procurements, there was no
documentation to support which of the five criteria was met to allow for the noncompetitive
procurement.
Cause: Management did not have effective internal controls in place to ensure that procurement
requirements were adequately documented and retained.
Effect: Procurement records were insufficient to meet the requirements noted in the Criteria section
above, as well as NFHA's internal procurement policy.
Questioned Costs: None.
Context: We noted that several items selected for testing did not document the rationale for the
method of procurement, selection of contract type, contractor selection or rejection, and the basis for
the contract price. In addition, we noted that several items selected for testing for noncompetitive
procurements did not maintain documentation of which of the five criteria were met to allow for the
noncompetitive procurement.
Identification as a Repeat Finding: Not applicable.
Recommendation: We recommend NFHA update its policies to treat Federal and non-Federal
procurement the same and ensure compliance with Uniform Guidance. NFHA should retain sufficient
procurement documentation to meet the requirements noted in the Criteria section above.
Finding 2023-005: Reporting
Information About the Program: All Programs
Criteria: Grantor requires NFHA to submit financial and programmatic reports in accordance with
the schedules indicated in its grant agreements. Internal controls should provide management with
the ability to report the measurement of the recipient's performance to show achievement of program
goals and objectives, share lessons learned, improve program outcomes, and foster adoption of
promising practices (2 CFR §200.301(a)). NFHA's financial management systems, including records
documenting compliance with Federal statutes, regulations, and the terms and conditions of the
Federal award, must be sufficient to permit the preparation of reports required by general and
program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate
to establish that such funds have been used according to the Federal statutes, regulations, and the
terms and conditions of the Federal award.
Condition: During our audit, we noted that there is no documented review specifically on
programmatic reports.
Cause: Programmatic reports are reviewed along with financial reports, but there is no formal
documentation to verify programmatic reports were reviewed before submission.
Effect or Potential Effect: The performance progress according to the Federal award(s) may not be
monitored, thus having potential unallowable costs or unallowable activities.
Questioned Costs: None.
Context: Programmatic reports did not have documented approval.
Identification as a Repeat Finding: Not applicable.
Recommendation: We also recommend NFHA implement a formal and documented review and
approval process over programmatic reporting.
Finding 2023-003: Suspension and Debarment
Information About the Program: All Programs
Criteria: As stated in 2 CFR §200.303, the non-Federal entity (i.e. NFHA) must establish and
maintain effective internal control over the Federal award that provides reasonable assurance that
the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations and terms and conditions of the Federal award. These internal controls should be in
compliance with guidance in “Standards for Internal Control in the Federal Government” issued by
the Comptroller General of the United States or in the “Internal Control Integrated Framework”
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
According to 2 CFR §200.214, the non-Federal entity is subject to the non-procurement debarment
and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The
regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are
debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance
programs or activities.
Condition: During our audit, we noted NFHA did not perform checks via SAM.gov to ensure that
potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such
parties increases the possibility that U.S. Government funds may inadvertently be provided to
individuals or organizations deemed to be excluded by the U.S. Government.
Cause: Management did not have effective internal controls in place to ensure that suspension and
debarment checks were being performed prior to entering into contracts with vendors or contractors/
consultants.Potential Effect: NFHA is exposed to an increased risk that future noncompliance could occur by
entering into transactions with vendors, contractors, or consultants that are suspended, debarred, or
otherwise excluded from contracting with the U.S. Federal Government. If a non-Federal entity
knowingly does business with an excluded person, the agency responsible for NFHA's funding may
disallow costs, annul or terminate the transaction, issue a stop work order, debar or suspend NFHA,
or take other remedies as appropriate.
Questioned Costs: None.
Context: NFHA failed to perform its due diligence with respect to these requirements. The issue is
considered systemic in nature.
Identification as a Repeat Finding: Not applicable.
Recommendation: We recommend NFHA implement internal controls to ensure that all vendors,
contractors, and consultants are screened for suspension and debarment prior to entering into any
executed contract. We further recommend that a policy be formalized and implemented that requires
an annual screening, at a minimum, of any current vendors, contractors, or consultants as well.
Finding 2023-004: Procurement
Information About the Program: All Programs
Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) Establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-
Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and
the terms and conditions of the Federal award. These internal controls should be in compliance with
guidance in Standards for Internal Control in the Federal Government issued by the Comptroller
General of the United States or the internal Control Integrated Framework, issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO).
Additionally, according to 2 CFR §200.318 Procurement standards, the non-Federal entity must
maintain records sufficient to detail the history of procurement. These records will include, but are
not necessarily limited to, the following: Rationale for the method of procurement, selection of
contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A
Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the
acquisition of property or services required under a Federal award must be conducted in a manner
providing full and open competition consistent with the standards of this section and §200.320. The
non-Federal entity must have written procedures for procurement transactions. These procedures
must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical
requirements for the material, product, or service to be procured. Such description must not, in
competitive procurements, contain features which unduly restrict competition. The description may
include a statement of the qualitative nature of the material, product or service to be procured and,
when necessary, must set forth those minimum essential characteristics and standards to which it
must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in
accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which
noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one
or more of the following circumstances apply:
1. The acquisition of property or services, the aggregate dollar amount of which does not exceed
the micro-purchase threshold (see paragraph (a)(1) of this section);
2. The item is available only from a single source;
3. The public exigency or emergency for the requirement will not permit a delay resulting from
publicizing a competitive solicitation;
4. The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive
procurement in response to a written request from the non-Federal entity; or
5. After solicitation of a number of sources, competition is determined inadequate.
Condition: During our testing over procurement, we determined NFHA did not clearly document the
rationale for the method of procurement, selection of contract type, contractor selection or rejection,
and the basis for the contract price. In addition, for noncompetitive procurements, there was no
documentation to support which of the five criteria was met to allow for the noncompetitive
procurement.
Cause: Management did not have effective internal controls in place to ensure that procurement
requirements were adequately documented and retained.
Effect: Procurement records were insufficient to meet the requirements noted in the Criteria section
above, as well as NFHA's internal procurement policy.
Questioned Costs: None.
Context: We noted that several items selected for testing did not document the rationale for the
method of procurement, selection of contract type, contractor selection or rejection, and the basis for
the contract price. In addition, we noted that several items selected for testing for noncompetitive
procurements did not maintain documentation of which of the five criteria were met to allow for the
noncompetitive procurement.
Identification as a Repeat Finding: Not applicable.
Recommendation: We recommend NFHA update its policies to treat Federal and non-Federal
procurement the same and ensure compliance with Uniform Guidance. NFHA should retain sufficient
procurement documentation to meet the requirements noted in the Criteria section above.
Finding 2023-005: Reporting
Information About the Program: All Programs
Criteria: Grantor requires NFHA to submit financial and programmatic reports in accordance with
the schedules indicated in its grant agreements. Internal controls should provide management with
the ability to report the measurement of the recipient's performance to show achievement of program
goals and objectives, share lessons learned, improve program outcomes, and foster adoption of
promising practices (2 CFR §200.301(a)). NFHA's financial management systems, including records
documenting compliance with Federal statutes, regulations, and the terms and conditions of the
Federal award, must be sufficient to permit the preparation of reports required by general and
program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate
to establish that such funds have been used according to the Federal statutes, regulations, and the
terms and conditions of the Federal award.
Condition: During our audit, we noted that there is no documented review specifically on
programmatic reports.
Cause: Programmatic reports are reviewed along with financial reports, but there is no formal
documentation to verify programmatic reports were reviewed before submission.
Effect or Potential Effect: The performance progress according to the Federal award(s) may not be
monitored, thus having potential unallowable costs or unallowable activities.
Questioned Costs: None.
Context: Programmatic reports did not have documented approval.
Identification as a Repeat Finding: Not applicable.
Recommendation: We also recommend NFHA implement a formal and documented review and
approval process over programmatic reporting.
Finding 2023-003: Suspension and Debarment
Information About the Program: All Programs
Criteria: As stated in 2 CFR §200.303, the non-Federal entity (i.e. NFHA) must establish and
maintain effective internal control over the Federal award that provides reasonable assurance that
the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations and terms and conditions of the Federal award. These internal controls should be in
compliance with guidance in “Standards for Internal Control in the Federal Government” issued by
the Comptroller General of the United States or in the “Internal Control Integrated Framework”
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
According to 2 CFR §200.214, the non-Federal entity is subject to the non-procurement debarment
and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The
regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are
debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance
programs or activities.
Condition: During our audit, we noted NFHA did not perform checks via SAM.gov to ensure that
potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such
parties increases the possibility that U.S. Government funds may inadvertently be provided to
individuals or organizations deemed to be excluded by the U.S. Government.
Cause: Management did not have effective internal controls in place to ensure that suspension and
debarment checks were being performed prior to entering into contracts with vendors or contractors/
consultants.Potential Effect: NFHA is exposed to an increased risk that future noncompliance could occur by
entering into transactions with vendors, contractors, or consultants that are suspended, debarred, or
otherwise excluded from contracting with the U.S. Federal Government. If a non-Federal entity
knowingly does business with an excluded person, the agency responsible for NFHA's funding may
disallow costs, annul or terminate the transaction, issue a stop work order, debar or suspend NFHA,
or take other remedies as appropriate.
Questioned Costs: None.
Context: NFHA failed to perform its due diligence with respect to these requirements. The issue is
considered systemic in nature.
Identification as a Repeat Finding: Not applicable.
Recommendation: We recommend NFHA implement internal controls to ensure that all vendors,
contractors, and consultants are screened for suspension and debarment prior to entering into any
executed contract. We further recommend that a policy be formalized and implemented that requires
an annual screening, at a minimum, of any current vendors, contractors, or consultants as well.
Finding 2023-004: Procurement
Information About the Program: All Programs
Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) Establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-
Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and
the terms and conditions of the Federal award. These internal controls should be in compliance with
guidance in Standards for Internal Control in the Federal Government issued by the Comptroller
General of the United States or the internal Control Integrated Framework, issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO).
Additionally, according to 2 CFR §200.318 Procurement standards, the non-Federal entity must
maintain records sufficient to detail the history of procurement. These records will include, but are
not necessarily limited to, the following: Rationale for the method of procurement, selection of
contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A
Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the
acquisition of property or services required under a Federal award must be conducted in a manner
providing full and open competition consistent with the standards of this section and §200.320. The
non-Federal entity must have written procedures for procurement transactions. These procedures
must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical
requirements for the material, product, or service to be procured. Such description must not, in
competitive procurements, contain features which unduly restrict competition. The description may
include a statement of the qualitative nature of the material, product or service to be procured and,
when necessary, must set forth those minimum essential characteristics and standards to which it
must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in
accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which
noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one
or more of the following circumstances apply:
1. The acquisition of property or services, the aggregate dollar amount of which does not exceed
the micro-purchase threshold (see paragraph (a)(1) of this section);
2. The item is available only from a single source;
3. The public exigency or emergency for the requirement will not permit a delay resulting from
publicizing a competitive solicitation;
4. The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive
procurement in response to a written request from the non-Federal entity; or
5. After solicitation of a number of sources, competition is determined inadequate.
Condition: During our testing over procurement, we determined NFHA did not clearly document the
rationale for the method of procurement, selection of contract type, contractor selection or rejection,
and the basis for the contract price. In addition, for noncompetitive procurements, there was no
documentation to support which of the five criteria was met to allow for the noncompetitive
procurement.
Cause: Management did not have effective internal controls in place to ensure that procurement
requirements were adequately documented and retained.
Effect: Procurement records were insufficient to meet the requirements noted in the Criteria section
above, as well as NFHA's internal procurement policy.
Questioned Costs: None.
Context: We noted that several items selected for testing did not document the rationale for the
method of procurement, selection of contract type, contractor selection or rejection, and the basis for
the contract price. In addition, we noted that several items selected for testing for noncompetitive
procurements did not maintain documentation of which of the five criteria were met to allow for the
noncompetitive procurement.
Identification as a Repeat Finding: Not applicable.
Recommendation: We recommend NFHA update its policies to treat Federal and non-Federal
procurement the same and ensure compliance with Uniform Guidance. NFHA should retain sufficient
procurement documentation to meet the requirements noted in the Criteria section above.
Finding 2023-005: Reporting
Information About the Program: All Programs
Criteria: Grantor requires NFHA to submit financial and programmatic reports in accordance with
the schedules indicated in its grant agreements. Internal controls should provide management with
the ability to report the measurement of the recipient's performance to show achievement of program
goals and objectives, share lessons learned, improve program outcomes, and foster adoption of
promising practices (2 CFR §200.301(a)). NFHA's financial management systems, including records
documenting compliance with Federal statutes, regulations, and the terms and conditions of the
Federal award, must be sufficient to permit the preparation of reports required by general and
program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate
to establish that such funds have been used according to the Federal statutes, regulations, and the
terms and conditions of the Federal award.
Condition: During our audit, we noted that there is no documented review specifically on
programmatic reports.
Cause: Programmatic reports are reviewed along with financial reports, but there is no formal
documentation to verify programmatic reports were reviewed before submission.
Effect or Potential Effect: The performance progress according to the Federal award(s) may not be
monitored, thus having potential unallowable costs or unallowable activities.
Questioned Costs: None.
Context: Programmatic reports did not have documented approval.
Identification as a Repeat Finding: Not applicable.
Recommendation: We also recommend NFHA implement a formal and documented review and
approval process over programmatic reporting.
Finding 2023-003: Suspension and Debarment
Information About the Program: All Programs
Criteria: As stated in 2 CFR §200.303, the non-Federal entity (i.e. NFHA) must establish and
maintain effective internal control over the Federal award that provides reasonable assurance that
the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations and terms and conditions of the Federal award. These internal controls should be in
compliance with guidance in “Standards for Internal Control in the Federal Government” issued by
the Comptroller General of the United States or in the “Internal Control Integrated Framework”
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
According to 2 CFR §200.214, the non-Federal entity is subject to the non-procurement debarment
and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The
regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are
debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance
programs or activities.
Condition: During our audit, we noted NFHA did not perform checks via SAM.gov to ensure that
potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such
parties increases the possibility that U.S. Government funds may inadvertently be provided to
individuals or organizations deemed to be excluded by the U.S. Government.
Cause: Management did not have effective internal controls in place to ensure that suspension and
debarment checks were being performed prior to entering into contracts with vendors or contractors/
consultants.Potential Effect: NFHA is exposed to an increased risk that future noncompliance could occur by
entering into transactions with vendors, contractors, or consultants that are suspended, debarred, or
otherwise excluded from contracting with the U.S. Federal Government. If a non-Federal entity
knowingly does business with an excluded person, the agency responsible for NFHA's funding may
disallow costs, annul or terminate the transaction, issue a stop work order, debar or suspend NFHA,
or take other remedies as appropriate.
Questioned Costs: None.
Context: NFHA failed to perform its due diligence with respect to these requirements. The issue is
considered systemic in nature.
Identification as a Repeat Finding: Not applicable.
Recommendation: We recommend NFHA implement internal controls to ensure that all vendors,
contractors, and consultants are screened for suspension and debarment prior to entering into any
executed contract. We further recommend that a policy be formalized and implemented that requires
an annual screening, at a minimum, of any current vendors, contractors, or consultants as well.
Finding 2023-004: Procurement
Information About the Program: All Programs
Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) Establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-
Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and
the terms and conditions of the Federal award. These internal controls should be in compliance with
guidance in Standards for Internal Control in the Federal Government issued by the Comptroller
General of the United States or the internal Control Integrated Framework, issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO).
Additionally, according to 2 CFR §200.318 Procurement standards, the non-Federal entity must
maintain records sufficient to detail the history of procurement. These records will include, but are
not necessarily limited to, the following: Rationale for the method of procurement, selection of
contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A
Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the
acquisition of property or services required under a Federal award must be conducted in a manner
providing full and open competition consistent with the standards of this section and §200.320. The
non-Federal entity must have written procedures for procurement transactions. These procedures
must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical
requirements for the material, product, or service to be procured. Such description must not, in
competitive procurements, contain features which unduly restrict competition. The description may
include a statement of the qualitative nature of the material, product or service to be procured and,
when necessary, must set forth those minimum essential characteristics and standards to which it
must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in
accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which
noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one
or more of the following circumstances apply:
1. The acquisition of property or services, the aggregate dollar amount of which does not exceed
the micro-purchase threshold (see paragraph (a)(1) of this section);
2. The item is available only from a single source;
3. The public exigency or emergency for the requirement will not permit a delay resulting from
publicizing a competitive solicitation;
4. The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive
procurement in response to a written request from the non-Federal entity; or
5. After solicitation of a number of sources, competition is determined inadequate.
Condition: During our testing over procurement, we determined NFHA did not clearly document the
rationale for the method of procurement, selection of contract type, contractor selection or rejection,
and the basis for the contract price. In addition, for noncompetitive procurements, there was no
documentation to support which of the five criteria was met to allow for the noncompetitive
procurement.
Cause: Management did not have effective internal controls in place to ensure that procurement
requirements were adequately documented and retained.
Effect: Procurement records were insufficient to meet the requirements noted in the Criteria section
above, as well as NFHA's internal procurement policy.
Questioned Costs: None.
Context: We noted that several items selected for testing did not document the rationale for the
method of procurement, selection of contract type, contractor selection or rejection, and the basis for
the contract price. In addition, we noted that several items selected for testing for noncompetitive
procurements did not maintain documentation of which of the five criteria were met to allow for the
noncompetitive procurement.
Identification as a Repeat Finding: Not applicable.
Recommendation: We recommend NFHA update its policies to treat Federal and non-Federal
procurement the same and ensure compliance with Uniform Guidance. NFHA should retain sufficient
procurement documentation to meet the requirements noted in the Criteria section above.
Finding 2023-005: Reporting
Information About the Program: All Programs
Criteria: Grantor requires NFHA to submit financial and programmatic reports in accordance with
the schedules indicated in its grant agreements. Internal controls should provide management with
the ability to report the measurement of the recipient's performance to show achievement of program
goals and objectives, share lessons learned, improve program outcomes, and foster adoption of
promising practices (2 CFR §200.301(a)). NFHA's financial management systems, including records
documenting compliance with Federal statutes, regulations, and the terms and conditions of the
Federal award, must be sufficient to permit the preparation of reports required by general and
program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate
to establish that such funds have been used according to the Federal statutes, regulations, and the
terms and conditions of the Federal award.
Condition: During our audit, we noted that there is no documented review specifically on
programmatic reports.
Cause: Programmatic reports are reviewed along with financial reports, but there is no formal
documentation to verify programmatic reports were reviewed before submission.
Effect or Potential Effect: The performance progress according to the Federal award(s) may not be
monitored, thus having potential unallowable costs or unallowable activities.
Questioned Costs: None.
Context: Programmatic reports did not have documented approval.
Identification as a Repeat Finding: Not applicable.
Recommendation: We also recommend NFHA implement a formal and documented review and
approval process over programmatic reporting.