Audit 396827

Finding No. 2025-002 – Procurement, Suspension and Debarment – Material Weakness U.S. Department of Housing and Urban Development 14.267 Continuum of Care Program Criteria In accordance with §200.213 and §180.300, 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. Condition During our testing, we noted that management did not provide adequate supporting documentation for proper suspension and debarment checks over vendors. Cause Jericho Project did not have adequate policies, procedures, and controls in place to ensure compliance with the suspension and debarment requirements. Effect or Potential Effect Failure to timely verify that a vendor is not suspended or debarred could result in entering into a contract with an entity that is barred from performing work for the U.S. government. Questioned Costs – N/A Context For 18 out of a total of 20 vendors tested, management did not provide adequate supporting documentation for suspension and debarment. During our testing, it was noted that none of the bendors are suspended or debarred. Identification as a Repeat Finding This finding is not a repeat finding. Recommendation We recommend that the Jericho Project establish controls to document suspension and debarment over vendors to ensure the Jericho Project is in compliance with the Uniform Guidance and that all staff are trained on this policy to ensure compliance and related internal controls over compliance are operating effectively. Views of Responsible Officials Management understands the findings outlined in the audit report. Management has updated its procurement procedures for the federal grant to align with 2 CFR section 200.213 and 2 CFR section 180.300. To ensure that vendors supporting efforts on the federal grant are not suspended or debarred from doing business with the federal government, Jericho has added a task in our Procurement Summary (procurement checklist) that specifically requires the project manager and CAO to verify the vendor's eligibility in the System for Award Management ("SAM") maintained by the General Services Administration ("GSA") (available at SAM.gov). In addition to the verification that the vendor is not prohibited (debarred or suspended) from providing services to or contracting with the United States government, management will retain a copy of the verification for the procurement file. This action will be completed during the vendor evaluation stage of the procurement and before contract is awarded to the vendor. Management notes that the vendors selected for testing for 2025 were found to be in good standing. Management notes that Corrective Action incorporation has already begun and will be fully implemented by 6/30/2026.