Audit 334638

2024-001 – Internal Control Over Compliance with Procurement, Suspension and Deparment Information on the Federal Program: U.S. Department of Treasury ALN 21.027 ALN Name: The Coronavirus State and Local Fiscal Recovery Funds Pass-through Entity: Habitat of Tennessee, Award Number: N/A, Award Period: July 1, 2022 through June 30, 2026 Criteria or Specific Requirement: In accordance with Section 200.318(a), General Procurement Standards, the non-federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable federal law and the standards identified in General Procurement Standards. Additionally, Section 200.318(i) states that the non-federal entity must maintain records sufficient to detail the history of the procurement. These records are required to 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. All procurement transactions must be conducted in a manner providing full and open competition consistent in accordance with Section 200.319 and must be performed using the appropriate procurement method as outlined in Section 200.320. In accordance with Sections 200.213 and 180.300, Suspension and Debarment, non-federal entities cannot enter into awards, subawards, or contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Non-federal entities must either check for exclusions in the System for Award Management (SAM); collect a certification from the entity or add a clause or condition to the covered transaction with the entity prior to entering into a covered transaction with a non-federal entity. In addition, in accordance with Section 180.415(b), non-federal entities cannot renew or extend covered transactions (other than no-cost time extension) with any excluded person, or under which an excluded person is a principal, unless the non-federal entity obtains an exception under Section 180.135. Condition and Context: During our testing of compliance, we identified that for all samples (25) selected for testing, Habitat did not retain evidence of Habitat’s due diligence efforts over suspension and debarment. Habitat was not having vendors complete the required certification to ensure they were not suspended or debarred, nor was Habitat documenting other due diligence procedures. Additionally, for two procurement samples of 25 sampled, Habitat was unable to provide copies of the procurement supporting documentation due to document retention issues. Questioned Costs: None noted. Cause: Habitat personnel did not adhere to Habitat’s documented policies for ensuring complete documentation of the history of the procurement, and for ensuring proper suspension and debarment validations were performed. Effect: Failure to perform procurement procedures in accordance with Habitat’s documented policies and Procurement Procedures as outlined in the Uniform Administrative Requirements could result in the procurement being disallowed. Failure to timely verify that a vendor is not suspended or debarred could result in transactions involving unreasonable costs or result in unintentionally entering into a contract with an entity that is barred from performing work for the federal government. Recommendation: We recommend Habitat have vendors complete required certifications annually to ensure compliance with regulations and adherence to internal policies. We also recommend management ensure all required procurement documentation is maintained. Views of Responsible Officials: Habitat’s management agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls. Corrective Action Plan: See Corrective Action Plan prepared by Habitat for Humanity of Greater Nashville.

2024-001 – Internal Control Over Compliance with Procurement, Suspension and Deparment Information on the Federal Program: U.S. Department of Treasury ALN 21.027 ALN Name: The Coronavirus State and Local Fiscal Recovery Funds Pass-through Entity: Habitat of Tennessee, Award Number: N/A, Award Period: July 1, 2022 through June 30, 2026 Criteria or Specific Requirement: In accordance with Section 200.318(a), General Procurement Standards, the non-federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable federal law and the standards identified in General Procurement Standards. Additionally, Section 200.318(i) states that the non-federal entity must maintain records sufficient to detail the history of the procurement. These records are required to 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. All procurement transactions must be conducted in a manner providing full and open competition consistent in accordance with Section 200.319 and must be performed using the appropriate procurement method as outlined in Section 200.320. In accordance with Sections 200.213 and 180.300, Suspension and Debarment, non-federal entities cannot enter into awards, subawards, or contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Non-federal entities must either check for exclusions in the System for Award Management (SAM); collect a certification from the entity or add a clause or condition to the covered transaction with the entity prior to entering into a covered transaction with a non-federal entity. In addition, in accordance with Section 180.415(b), non-federal entities cannot renew or extend covered transactions (other than no-cost time extension) with any excluded person, or under which an excluded person is a principal, unless the non-federal entity obtains an exception under Section 180.135. Condition and Context: During our testing of compliance, we identified that for all samples (25) selected for testing, Habitat did not retain evidence of Habitat’s due diligence efforts over suspension and debarment. Habitat was not having vendors complete the required certification to ensure they were not suspended or debarred, nor was Habitat documenting other due diligence procedures. Additionally, for two procurement samples of 25 sampled, Habitat was unable to provide copies of the procurement supporting documentation due to document retention issues. Questioned Costs: None noted. Cause: Habitat personnel did not adhere to Habitat’s documented policies for ensuring complete documentation of the history of the procurement, and for ensuring proper suspension and debarment validations were performed. Effect: Failure to perform procurement procedures in accordance with Habitat’s documented policies and Procurement Procedures as outlined in the Uniform Administrative Requirements could result in the procurement being disallowed. Failure to timely verify that a vendor is not suspended or debarred could result in transactions involving unreasonable costs or result in unintentionally entering into a contract with an entity that is barred from performing work for the federal government. Recommendation: We recommend Habitat have vendors complete required certifications annually to ensure compliance with regulations and adherence to internal policies. We also recommend management ensure all required procurement documentation is maintained. Views of Responsible Officials: Habitat’s management agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls. Corrective Action Plan: See Corrective Action Plan prepared by Habitat for Humanity of Greater Nashville.