Audit 36298

Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development CFDA #: 14.850 ? Public and Indian Housing CRITERIA Any contract not exceeding $100,000 may be made in accordance with the small purchase procedures. Contract requirements shall not be artificially divided so as to constitute a small purchase. For small purchases over $2,000, but not greater than $100,000, no less than three offerors shall be solicited to submit price quotations. (South Portland Housing Authority Procurement Policy) CONDITION We examined a sample of 6 vendors used for goods and services during fiscal year 2022 and identified 6 instances where the Authority did not follow their procurement policy or did not retain sufficient supporting documentation. CAUSE The Authority?s internal control over procurement was not effective at identifying the need for competitive procurement in instances where frequently recurring transactions resulted in aggregate purchase in excess of competitive procurement thresholds. EFFECT The Authority has not ensured that it is receiving the most competitive prices or rates for services that have been procured, which may have resulted in unnecessary additional costs to the Authority QUESTIONED COSTS Estimated questioned costs of $193,000 representing the total payments to these 6 vendors. CONTEXT We selected a sample of 6 from a population of approximately 60 vendors paid in excess of the micro-purchase threshold. This was not a statistically valid sample. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the Authority improve its monitoring of contracts and periodically assess the procurement implications of cumulative payments to frequently used vendors. AUDITEE?S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development CFDA #: 14.850 ? Public and Indian Housing CRITERIA Any contract not exceeding $100,000 may be made in accordance with the small purchase procedures. Contract requirements shall not be artificially divided so as to constitute a small purchase. For small purchases over $2,000, but not greater than $100,000, no less than three offerors shall be solicited to submit price quotations. (South Portland Housing Authority Procurement Policy) CONDITION We examined a sample of 6 vendors used for goods and services during fiscal year 2022 and identified 6 instances where the Authority did not follow their procurement policy or did not retain sufficient supporting documentation. CAUSE The Authority?s internal control over procurement was not effective at identifying the need for competitive procurement in instances where frequently recurring transactions resulted in aggregate purchase in excess of competitive procurement thresholds. EFFECT The Authority has not ensured that it is receiving the most competitive prices or rates for services that have been procured, which may have resulted in unnecessary additional costs to the Authority QUESTIONED COSTS Estimated questioned costs of $193,000 representing the total payments to these 6 vendors. CONTEXT We selected a sample of 6 from a population of approximately 60 vendors paid in excess of the micro-purchase threshold. This was not a statistically valid sample. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the Authority improve its monitoring of contracts and periodically assess the procurement implications of cumulative payments to frequently used vendors. AUDITEE?S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.