2024-001 – Material Weakness in Compliance and Internal Control over Reporting
Identification of federal
programs:
U.S. Department of Housing and Urban Development:
#14.251 Economic Development Initiative, Community Project
Funding, and Misc. Grants, #B-22-CP-AK-0003
Criteria: Under the terms of the grant agreement, grantees must submit a
performance report and financial information in the Disaster
Recovery Grant Reporting system (DRGR) on a semi-annual
basis, no later than 30 calendar days after the end of the sixmonth
reporting period. For the year under audit, reports were
required for semi-annual period ending December 31, 2023 and
period ending June 30, 2024.
Condition: The report for period ending December 31, 3023 was not
submitted in DRGR. The report for period ending June 30, 2024
was submitted in DRGR but was outside of the 30 day deadline.
Cause: The Organization does not have a procedure in place to monitor
all award reporting requirements and deadlines or to ensure that
they are met timely.
Effect or potential effect: The Organization is not in compliance with the reporting
requirements of the terms of the grant agreement.
Questioned Costs: None
Context: During the course of the audit of the major program, auditors
requested copies of the required reports and their corresponding
approvals. Both semi-annual reports were prepared in the DRGR
system, but the DRGR system shows the report for period
ending December 31, 2023 as “In Progress” and the report for
period ending June 30, 2024 is “Reviewed and Approved” by the
agency, but the submission date occurs after the deadline date.
Identification of Repeat Finding: Not applicable.
Recommendations: We recommend that as part of the Organization’s internal
control structure over compliance with reporting requirements,
to establish monitoring procedures or checklists to ensure that
reporting deadlines are met and to retain a copy of the report,
including any attachments, and proof of submission of the report
by authorized individuals on or before the required deadline.
Views of Responsible Officials: See Corrective Action Plan
2024-002 – Material Weakness in Compliance and Internal Control over Procurement and Suspension
and Debarment
Identification of federal
programs:
U.S. Department of Housing and Urban Development:
#14.251 Economic Development Initiative, Community Project
Funding, and Misc. Grants, #B-22-CP-AK-0003
Criteria: Part 3 Compliance Supplement
Non-federal entities other than states must follow the
procurement standards set out at 2 CFR sections 200.318
through 200.327.
§ 200.318(a) Documented procurement procedures – The
recipient must maintain and use documented procedures for
procurement transactions under a Federal award or subaward,
including for acquisition of property or services. These
documented procurement procedures must be consistent with
State, local, and tribal laws and regulations and the standards
identified in §§ 200.317 through 200.327.
§ 200.318(i) Procurement records - The recipient must maintain
records sufficient to detail the history of each procurement
transaction. These records must include the rationale for the
procurement method, contract type selection, contractor
selection or rejection, and the basis for the contract price.
§ 200.320 Procurement methods – There are three types of
procurement methods described: informal procurement methods
(for micro-purchases and simplified acquisitions); formal
procurement methods (through sealed bids or proposals); and
noncompetitive procurement methods. For any of these
methods, the recipient must maintain and use documented
procurement procedures, consistent with the standards of this
section and §§ 200.317, 200.318, and 200.319.
§ 200.214 Suspension and debarment – When a non-federal
entity enters into a covered transaction, the non-federal entity
must verify that the entity is not suspended or debarred or
otherwise excluded from participating in the transaction.
Condition: The Organization procured certain goods or services from
vendors but did not maintain evidence that they followed their
procurement policy or the procurement requirements of the
federal program.
Cause: The Organization’s purchasing policy does not address all of the
procurement requirements of Uniform Guidance. The
Organization did not maintain sufficient documentation
supporting purchases greater than the micro-purchase threshold
or relating to suspension and debarment on certain covered
transactions. In the period after year end and before the date of
fieldwork, there was turnover in management in the Executive
Director position so it is possible that competitive bidding was
sought, but that the knowledge and communications have been lost during the transition.
Effect or potential effect: The Organization is not in compliance with the procurement
requirements of the Uniform Guidance.
Questioned Costs: None
Context: During the course of the audit of the major program, auditors
requested copies of the required support for purchases from
three vendors. Support was provided for one of the purchases
but could not be located for two of the purchases.
Identification of Repeat Finding: Not applicable.
Recommendations: We recommend that the Organization reviews and revises their
procurement policies and procedures to ensure that they align
with the requirements of Uniform Guidance. We also
recommend that as part of the Organization’s internal control
structure over compliance with procurement requirements, to
establish monitoring procedures or checklists to ensure that
support is obtained from a sufficient number of qualified sources
depending on the purchasing threshold and method required to
be used, and that evidence is retained to show that vendors were
not suspended or debarred before entering into a transaction
with them.
Views of Responsible Officials: See Corrective Action Plan
2024-001 – Material Weakness in Compliance and Internal Control over Reporting
Identification of federal
programs:
U.S. Department of Housing and Urban Development:
#14.251 Economic Development Initiative, Community Project
Funding, and Misc. Grants, #B-22-CP-AK-0003
Criteria: Under the terms of the grant agreement, grantees must submit a
performance report and financial information in the Disaster
Recovery Grant Reporting system (DRGR) on a semi-annual
basis, no later than 30 calendar days after the end of the sixmonth
reporting period. For the year under audit, reports were
required for semi-annual period ending December 31, 2023 and
period ending June 30, 2024.
Condition: The report for period ending December 31, 3023 was not
submitted in DRGR. The report for period ending June 30, 2024
was submitted in DRGR but was outside of the 30 day deadline.
Cause: The Organization does not have a procedure in place to monitor
all award reporting requirements and deadlines or to ensure that
they are met timely.
Effect or potential effect: The Organization is not in compliance with the reporting
requirements of the terms of the grant agreement.
Questioned Costs: None
Context: During the course of the audit of the major program, auditors
requested copies of the required reports and their corresponding
approvals. Both semi-annual reports were prepared in the DRGR
system, but the DRGR system shows the report for period
ending December 31, 2023 as “In Progress” and the report for
period ending June 30, 2024 is “Reviewed and Approved” by the
agency, but the submission date occurs after the deadline date.
Identification of Repeat Finding: Not applicable.
Recommendations: We recommend that as part of the Organization’s internal
control structure over compliance with reporting requirements,
to establish monitoring procedures or checklists to ensure that
reporting deadlines are met and to retain a copy of the report,
including any attachments, and proof of submission of the report
by authorized individuals on or before the required deadline.
Views of Responsible Officials: See Corrective Action Plan
2024-002 – Material Weakness in Compliance and Internal Control over Procurement and Suspension
and Debarment
Identification of federal
programs:
U.S. Department of Housing and Urban Development:
#14.251 Economic Development Initiative, Community Project
Funding, and Misc. Grants, #B-22-CP-AK-0003
Criteria: Part 3 Compliance Supplement
Non-federal entities other than states must follow the
procurement standards set out at 2 CFR sections 200.318
through 200.327.
§ 200.318(a) Documented procurement procedures – The
recipient must maintain and use documented procedures for
procurement transactions under a Federal award or subaward,
including for acquisition of property or services. These
documented procurement procedures must be consistent with
State, local, and tribal laws and regulations and the standards
identified in §§ 200.317 through 200.327.
§ 200.318(i) Procurement records - The recipient must maintain
records sufficient to detail the history of each procurement
transaction. These records must include the rationale for the
procurement method, contract type selection, contractor
selection or rejection, and the basis for the contract price.
§ 200.320 Procurement methods – There are three types of
procurement methods described: informal procurement methods
(for micro-purchases and simplified acquisitions); formal
procurement methods (through sealed bids or proposals); and
noncompetitive procurement methods. For any of these
methods, the recipient must maintain and use documented
procurement procedures, consistent with the standards of this
section and §§ 200.317, 200.318, and 200.319.
§ 200.214 Suspension and debarment – When a non-federal
entity enters into a covered transaction, the non-federal entity
must verify that the entity is not suspended or debarred or
otherwise excluded from participating in the transaction.
Condition: The Organization procured certain goods or services from
vendors but did not maintain evidence that they followed their
procurement policy or the procurement requirements of the
federal program.
Cause: The Organization’s purchasing policy does not address all of the
procurement requirements of Uniform Guidance. The
Organization did not maintain sufficient documentation
supporting purchases greater than the micro-purchase threshold
or relating to suspension and debarment on certain covered
transactions. In the period after year end and before the date of
fieldwork, there was turnover in management in the Executive
Director position so it is possible that competitive bidding was
sought, but that the knowledge and communications have been lost during the transition.
Effect or potential effect: The Organization is not in compliance with the procurement
requirements of the Uniform Guidance.
Questioned Costs: None
Context: During the course of the audit of the major program, auditors
requested copies of the required support for purchases from
three vendors. Support was provided for one of the purchases
but could not be located for two of the purchases.
Identification of Repeat Finding: Not applicable.
Recommendations: We recommend that the Organization reviews and revises their
procurement policies and procedures to ensure that they align
with the requirements of Uniform Guidance. We also
recommend that as part of the Organization’s internal control
structure over compliance with procurement requirements, to
establish monitoring procedures or checklists to ensure that
support is obtained from a sufficient number of qualified sources
depending on the purchasing threshold and method required to
be used, and that evidence is retained to show that vendors were
not suspended or debarred before entering into a transaction
with them.
Views of Responsible Officials: See Corrective Action Plan