Audit 404188

MAJOR FEDERAL AWARD PROGRAM AUDIT Finding #2025-001 Contractor File Maintenance - 14.872 Department of Housing and Urban Development Public Housing Capital fund Program – CFDA #14.872 Compliance Requirement – Procurement Type of Control Finding – Material Weakness Condition During our audit of the Public Housing Capital Fund Program, we identified deficiencies related to procurement compliance within a contractor file. Specifically, the contractor file reviewed did not contain documentation required to ensure compliance with applicable HUD laws and regulations. Total of possible contractor file sample = 1 Auditor deemed a sample size of 1 contractor file = 100% Deficiencies Noted: We the following items could not be presents upon review of the contractor file: New Jersey Business Registration Certificate A Bid Proposal A Bid Tabulation Proof that the Contractor was not on the HUD Debarred List Price cost Analysis form A Notice to Proceed Letter to the Contractor A Board Resolution for Acceptance of the Contractor A Schedule of Payments made to the Contractor A Disclosure Form signed by the Contractor A Non-Collusion Form signed by the Contractor A License from the Contractor Site Inspections performed by the Authority Contractor Certified Payroll Forms during the construction period Signed HUD- 11 Employee Interview Forms Criteria HUD regulations require that all contractor files be properly maintained and include complete documentation demonstrating compliance with procurement and contracting requirements. Applicable guidance is contained within HUD Handbook No. 7460.8 REV 2 and 24 CFR §85.36. Cause The Capital Fund Program (CFP) Coordinator did not adequately review the contractor file to ensure compliance with HUD procurement and documentation requirements. Effect As a result, the contractor file lacked essential documentation required by HUD and the State of New Jersey, increasing the risk of noncompliance with federal and state procurement regulations. Questioned Cost = Amounted to $299,656 Recommendation The Executive Director should instruct the Capital Fund Program Coordinator to utilize the HUD procurement and contractor file review checklist for each contractor file to ensure full compliance with HUD requirements prior to authorizing any payments. Relevant guidance is provided in HUD Handbook No. 7460.8 REV 2. Management’s Response Management concurs with the auditor’s finding that the contractor file did not contain the required HUD documentation. The Authority has implemented corrective measures, including a formal corrective action plan, to address the deficiencies identified and strengthen contractor file compliance going forward.