Audit 56223

2022-002 ? 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 For small purchases in excess of $1,500 but not exceeding $100,000 no less than three offerors shall be solicited to submit price quotations, which may be obtained orally, by telephone, or in writing, as allowed by State or local laws. Award shall be made to the offeror providing the lowest acceptable quotation, unless justified in writing based on price and other specified factors, such as for architect engineer contracts. If non-price factors are used, they shall be disclosed to all those solicited. The names, addresses, and/or telephone numbers of the offerors and persons contacted, and the date and amount of each quotation shall be recorded and maintained as a public record (unless otherwise provided in State or local law). (Housing Authority of the City of Newport Procurement Policy) CONDITION We examined a sample of four vendors used for goods and services during fiscal year 2022, the Authority was unable to provide procurement documentation for each of the four vendors selected. The total payments to the seven vendors aggregated $240,002. 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. 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 $240,002 representing the total payments to these four vendors. CONTEXT We selected a sample of four vendors from a population of approximately forty 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 continue with their corrective action plan from the prior year including: ? Periodically reviewing 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.

2022-002 ? 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 For small purchases in excess of $1,500 but not exceeding $100,000 no less than three offerors shall be solicited to submit price quotations, which may be obtained orally, by telephone, or in writing, as allowed by State or local laws. Award shall be made to the offeror providing the lowest acceptable quotation, unless justified in writing based on price and other specified factors, such as for architect engineer contracts. If non-price factors are used, they shall be disclosed to all those solicited. The names, addresses, and/or telephone numbers of the offerors and persons contacted, and the date and amount of each quotation shall be recorded and maintained as a public record (unless otherwise provided in State or local law). (Housing Authority of the City of Newport Procurement Policy) CONDITION We examined a sample of four vendors used for goods and services during fiscal year 2022, the Authority was unable to provide procurement documentation for each of the four vendors selected. The total payments to the seven vendors aggregated $240,002. 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. 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 $240,002 representing the total payments to these four vendors. CONTEXT We selected a sample of four vendors from a population of approximately forty 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 continue with their corrective action plan from the prior year including: ? Periodically reviewing 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.