Finding 2024-002
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Public and Indian Housing (Non-major Program)
and Section 8 Housing Choice Vouchers Programs
Federal Assistance Listing Number: 14.850 and 14.871
Noncompliance – B. Allowable Costs/Cost Principles
Non Compliance Material to the Financial Statements: No
Significant Deficiency in Internal Control over Compliance for Allowable Costs/Cost Principles
Criteria: The Authority's federal program expenditures must meet the requirements of 2 CFR Part 200 Subpart E Cost Principles and must be adequately documented.
Condition: Based upon inspection of the Authority’s paid invoices and on discussion with management, there were costs that were determined to be unallowable.
Context: The following costs were determined to be unallowable or not reasonable or necessary in the proper and efficient performance of the federal program: Meals and gifts (2 CFR section 200.438) Known Questioned Costs: Amount is below threshold of $25,000.
Cause: There is a significant deficiency in internal controls over the compliance for the allowable costs/cost principles type of compliance. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that reasonably assures the program is in compliance with the allowable costs/cost principles requirements.
Effect: The Public and Indian Housing and Section 8 Housing Choice Voucher Programs is in non-compliance with the allowable costs/cost principles type of compliance.
Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.
Finding 2024-001
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Public and Indian Housing Program (Non-major Program)
Federal Assistance Listing Number: 14.850
Noncompliance – I. Procurement and Suspension and Debarment
Non Compliance Material to the Financial Statements: No
Significant Deficiency in Internal Control over Compliance for Procurement and Suspension and Debarment
Criteria: The Authority's approved Procurement Policy requires that procurement by non-competitive proposals (sole-source) may be used only when the award of a contract is not feasible using small purchase procedures, sealed bids, competitive purchasing, or competitive proposals, and if one of the following applies:
1. The item is available only from a single source, based on a good faith review of available sources;
2. An emergency exists that seriously threatens the public health, welfare, or safety, or endangers property, or would otherwise cause serious injury to the Authority, as may arise by reason of a flood, earthquake, epidemic, riot, equipment failure, or similar event. In such cases, there must be an immediate and serious need for supplies, services, or construction such that the need cannot be met through any of the other procurement methods, and the emergency procurement shall be limited to those supplies, services, or construction necessary simply to meet the emergency;
3. HUD authorizes the use of non-competitive proposals; or
4. After solicitation of a number of sources, competition is determined inadequate. In addition, the Authority 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, the basis for contract price, and a copy of the contract documents awarded or issued and signed by the Contracting Officer. The Authority has adopted a procurement policy that requires the Authority to meet certain conditions in order to use their sole-source procurement.
Condition: Based upon review of the Authority’s vendor history report, there was one (1) vendor who was contracted utilizing non-competitive (sole source) proposals in violation of the Authority's approved Procurement Policy.
Context: As part of the vendor history report review, we selected a sample of vendors that were paid in excess of the Authority's procurement threshold during the audit period. Based on the Authority's vendor history report, there were twenty one (21) vendors paid in excess of the Authority's procurement threshold during the audit period. Of a sample size of three (3) vendors: One (1) vendor was not properly procured in accordance with the Authority's approved procurement policy, as it relates to non-competitive proposals (sole-source). Known Questioned Costs: $47,196 Cause: The Authority did not comply with their approved Procurement Policy which was approved by the Board of Commissioners.
Effect: The Authority's non-compliance with their Procurement Policy resulted in a significant deficiency in internal controls that precluded other potential bidders from qualifying for the award and potentially providing a better price and service to the Authority.
Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Authority's Procurement Policy.
Finding 2024-002
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Public and Indian Housing (Non-major Program)
and Section 8 Housing Choice Vouchers Programs
Federal Assistance Listing Number: 14.850 and 14.871
Noncompliance – B. Allowable Costs/Cost Principles
Non Compliance Material to the Financial Statements: No
Significant Deficiency in Internal Control over Compliance for Allowable Costs/Cost Principles
Criteria: The Authority's federal program expenditures must meet the requirements of 2 CFR Part 200 Subpart E Cost Principles and must be adequately documented.
Condition: Based upon inspection of the Authority’s paid invoices and on discussion with management, there were costs that were determined to be unallowable.
Context: The following costs were determined to be unallowable or not reasonable or necessary in the proper and efficient performance of the federal program: Meals and gifts (2 CFR section 200.438) Known Questioned Costs: Amount is below threshold of $25,000.
Cause: There is a significant deficiency in internal controls over the compliance for the allowable costs/cost principles type of compliance. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that reasonably assures the program is in compliance with the allowable costs/cost principles requirements.
Effect: The Public and Indian Housing and Section 8 Housing Choice Voucher Programs is in non-compliance with the allowable costs/cost principles type of compliance.
Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.
Finding 2024-002
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Public and Indian Housing (Non-major Program)
and Section 8 Housing Choice Vouchers Programs
Federal Assistance Listing Number: 14.850 and 14.871
Noncompliance – B. Allowable Costs/Cost Principles
Non Compliance Material to the Financial Statements: No
Significant Deficiency in Internal Control over Compliance for Allowable Costs/Cost Principles
Criteria: The Authority's federal program expenditures must meet the requirements of 2 CFR Part 200 Subpart E Cost Principles and must be adequately documented.
Condition: Based upon inspection of the Authority’s paid invoices and on discussion with management, there were costs that were determined to be unallowable.
Context: The following costs were determined to be unallowable or not reasonable or necessary in the proper and efficient performance of the federal program: Meals and gifts (2 CFR section 200.438) Known Questioned Costs: Amount is below threshold of $25,000.
Cause: There is a significant deficiency in internal controls over the compliance for the allowable costs/cost principles type of compliance. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that reasonably assures the program is in compliance with the allowable costs/cost principles requirements.
Effect: The Public and Indian Housing and Section 8 Housing Choice Voucher Programs is in non-compliance with the allowable costs/cost principles type of compliance.
Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.
Finding 2024-001
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Public and Indian Housing Program (Non-major Program)
Federal Assistance Listing Number: 14.850
Noncompliance – I. Procurement and Suspension and Debarment
Non Compliance Material to the Financial Statements: No
Significant Deficiency in Internal Control over Compliance for Procurement and Suspension and Debarment
Criteria: The Authority's approved Procurement Policy requires that procurement by non-competitive proposals (sole-source) may be used only when the award of a contract is not feasible using small purchase procedures, sealed bids, competitive purchasing, or competitive proposals, and if one of the following applies:
1. The item is available only from a single source, based on a good faith review of available sources;
2. An emergency exists that seriously threatens the public health, welfare, or safety, or endangers property, or would otherwise cause serious injury to the Authority, as may arise by reason of a flood, earthquake, epidemic, riot, equipment failure, or similar event. In such cases, there must be an immediate and serious need for supplies, services, or construction such that the need cannot be met through any of the other procurement methods, and the emergency procurement shall be limited to those supplies, services, or construction necessary simply to meet the emergency;
3. HUD authorizes the use of non-competitive proposals; or
4. After solicitation of a number of sources, competition is determined inadequate. In addition, the Authority 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, the basis for contract price, and a copy of the contract documents awarded or issued and signed by the Contracting Officer. The Authority has adopted a procurement policy that requires the Authority to meet certain conditions in order to use their sole-source procurement.
Condition: Based upon review of the Authority’s vendor history report, there was one (1) vendor who was contracted utilizing non-competitive (sole source) proposals in violation of the Authority's approved Procurement Policy.
Context: As part of the vendor history report review, we selected a sample of vendors that were paid in excess of the Authority's procurement threshold during the audit period. Based on the Authority's vendor history report, there were twenty one (21) vendors paid in excess of the Authority's procurement threshold during the audit period. Of a sample size of three (3) vendors: One (1) vendor was not properly procured in accordance with the Authority's approved procurement policy, as it relates to non-competitive proposals (sole-source). Known Questioned Costs: $47,196 Cause: The Authority did not comply with their approved Procurement Policy which was approved by the Board of Commissioners.
Effect: The Authority's non-compliance with their Procurement Policy resulted in a significant deficiency in internal controls that precluded other potential bidders from qualifying for the award and potentially providing a better price and service to the Authority.
Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Authority's Procurement Policy.
Finding 2024-002
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Public and Indian Housing (Non-major Program)
and Section 8 Housing Choice Vouchers Programs
Federal Assistance Listing Number: 14.850 and 14.871
Noncompliance – B. Allowable Costs/Cost Principles
Non Compliance Material to the Financial Statements: No
Significant Deficiency in Internal Control over Compliance for Allowable Costs/Cost Principles
Criteria: The Authority's federal program expenditures must meet the requirements of 2 CFR Part 200 Subpart E Cost Principles and must be adequately documented.
Condition: Based upon inspection of the Authority’s paid invoices and on discussion with management, there were costs that were determined to be unallowable.
Context: The following costs were determined to be unallowable or not reasonable or necessary in the proper and efficient performance of the federal program: Meals and gifts (2 CFR section 200.438) Known Questioned Costs: Amount is below threshold of $25,000.
Cause: There is a significant deficiency in internal controls over the compliance for the allowable costs/cost principles type of compliance. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that reasonably assures the program is in compliance with the allowable costs/cost principles requirements.
Effect: The Public and Indian Housing and Section 8 Housing Choice Voucher Programs is in non-compliance with the allowable costs/cost principles type of compliance.
Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.