Audit 53296

SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 2022-001 ? PROCUREMENT, SUSPENSION, AND DEBARMENT Material Weakness / Material Noncompliance U.S. Department of Housing and Urban Development CFDA #: 14.850 ? Public and Indian Housing Program CRITERIA Procurement of goods or services may be made by non-competitive proposals only when an award of a contract cannot meet small purchase criteria, sealed bids or competitive proposals, and one of the following circumstances apply. a. Item is available only from a single source. b. Emergency situation which endangers the health and/or safety of the employees And/or residents of the BHA. c. After solicitation of sources, competition is determined inadequate. d. HUD has authorized the use of non-competitive proposals. Each procurement made as a non-competitive proposal shall be supported by written justification and approved in writing by the CEO. A cost analysis must be done to accept the reasonableness of any proposal using the procurement below. The degree of analysis shall depend on the circumstances surrounding each procurement. CONDITION We examined a sample of nine vendors used for goods and services during fiscal year 2022, and identified in seven instance where the Authority did not follow their procurement policy or did not retain sufficient supporting documentation in instances where each individual purchase was below $10,000 and the aggregate amount of purchases exceeded the $10,000 threshold. 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 purchases in excess of competitive procurement thresholds and in documenting emergency-type procurements. 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 are unable to be determined. CONTEXT We selected a sample of nine from a population of approximately fifty 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 implement the following: ? Periodically review expenditures for frequently recurring transactions with vendors that could exceed the competitive procurement thresholds. ? Periodically compare the contract register against frequently used vendors. ? Solicit bids and competitively procure contracts for services and materials frequently used and maintain documentation supporting the procurement decision. AUDITEE?S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 2022-001 ? PROCUREMENT, SUSPENSION, AND DEBARMENT Material Weakness / Material Noncompliance U.S. Department of Housing and Urban Development CFDA #: 14.850 ? Public and Indian Housing Program CRITERIA Procurement of goods or services may be made by non-competitive proposals only when an award of a contract cannot meet small purchase criteria, sealed bids or competitive proposals, and one of the following circumstances apply. a. Item is available only from a single source. b. Emergency situation which endangers the health and/or safety of the employees And/or residents of the BHA. c. After solicitation of sources, competition is determined inadequate. d. HUD has authorized the use of non-competitive proposals. Each procurement made as a non-competitive proposal shall be supported by written justification and approved in writing by the CEO. A cost analysis must be done to accept the reasonableness of any proposal using the procurement below. The degree of analysis shall depend on the circumstances surrounding each procurement. CONDITION We examined a sample of nine vendors used for goods and services during fiscal year 2022, and identified in seven instance where the Authority did not follow their procurement policy or did not retain sufficient supporting documentation in instances where each individual purchase was below $10,000 and the aggregate amount of purchases exceeded the $10,000 threshold. 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 purchases in excess of competitive procurement thresholds and in documenting emergency-type procurements. 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 are unable to be determined. CONTEXT We selected a sample of nine from a population of approximately fifty 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 implement the following: ? Periodically review expenditures for frequently recurring transactions with vendors that could exceed the competitive procurement thresholds. ? Periodically compare the contract register against frequently used vendors. ? Solicit bids and competitively procure contracts for services and materials frequently used and maintain documentation supporting the procurement decision. AUDITEE?S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.