Corrective Action Plan for the year ended December 31, 2025 IFFs most recent A-133 Audit Report identi�ied a Material Weakness regarding the validation of lack of suspension or debarment for vendors used for the below mentioned grant. Material Weakness Identi�ied in A-133 Audit CFDA No: 14.251 Feder...
Corrective Action Plan for the year ended December 31, 2025 IFFs most recent A-133 Audit Report identi�ied a Material Weakness regarding the validation of lack of suspension or debarment for vendors used for the below mentioned grant. Material Weakness Identi�ied in A-133 Audit CFDA No: 14.251 Federal Awarding Agency & Program: U.S. Department of Housing and Urban Development - Economic Development Initiative, Community Project Funding, and Miscellaneous. Finding 2025-001: Suspension and Debarment Criteria: Uniform Grant Guidance (2 CFR 180) requires nonfederal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure suspension and debarment procedures are properly followed and documented, with supporting information maintained, as required by 2 CFR 180. Condition: Out of 4 vendors tested, we noted 4 (100%) vendors from which IFF procured furniture, equipment and appliances without verifying the vendors’ status for suspension and debarment. Based on discussion with management, IFF did not have a process to ensure required suspension and debarment procedures were performed. Cause: Management did not suf�iciently identify grant requirements which resulted in nonperformance of required procedures over suspension and debarment. Uniform Grant Guidance 2 CDR 180: § 180.220 Are any procurement contracts included as covered transactions? (a) Covered transactions under this part: (1) Do not include any procurement contracts awarded directly by a federal agency; but (2) Do include some procurement contracts awarded under nonprocurement covered transactions. (b) Speci�ically, a contract for goods or services is a covered transaction if any of the following applies: (1) The contract is awarded by a participant in a nonprocurement transaction covered under § 180.210, and the contract amount is expected to equal or exceed $25,000. (2) The contract requires the consent of an of�icial of a federal agency. In that case, the contract is always a covered transaction regardless of the amount or who awarded it. For example, it could be a subcontract awarded by a contractor at a tier below a nonprocurement transaction, as shown in the Appendix to this part. (3) The contract is for Federally required audit services. (c) A subcontract also is a covered transaction if: (1) It is awarded by a participant in a procurement transaction under a nonprocurement transaction of a Federal agency that extends the coverage of paragraph (b)(1) of this section to additional tiers of contracts (see the diagram in the Appendix to this part showing that optional lower tier coverage); and (2) The value of the subcontract is expected to equal or exceed $25,000. § 180.225 How do I know if a transaction in which I may participate is a covered transaction? As a participant in a transaction, you will know that it is a covered transaction because of the Federal agency regulations governing the transaction. The appropriate Federal agency of�icial or participant at the next higher tier who enters into the transaction with you will tell you that you must comply with applicable portions of this part. Subpart C—Responsibilities of Participants Regarding Transactions Doing Business With Other Persons § 180.300 What must I do before I enter into a covered transaction with another person at the next lower tier? When you enter a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disquali�ied. You do this by: (a) Checking SAM.gov Exclusions; or (b) Collecting a certi�ication from that person; or (c) Adding a clause or condition to the covered transaction with that person. IFF Management Response: IFF did not have a process in place requiring veri�ication of any vendor Suspensions or Debarment where we utilized Federal Grant dollars. The majority of purchases for this project were under $25,000, although cumulative expenditures could very well have exceeded this amount. Corrective Action Taken: Once management become aware of the noncompliance condition, the Community Development Solutions team led by our Vice President of Community Development Solutions, Eden Hurd-Smith, made sure to check each vendor in SAM.gov and con�irmed that each vendors’ status was in fact not suspended or debarred from receiving federal grant proceeds. Corrective Action Planned: Through the work of our President and Core Operating Of�icer, Tara Townsend, we are already in process of implementing processes that address this gap in our current Business Enterprise Mapping processes. There are two places we are making changes: 1. In our Contract/Grant Management processes, we will identify and document all requirements tied to any funding source and contract in our Contract Tracker. In onboarding that contract, we will make sure our systems are set up to ensure that we comply with those requirements which will be con�irmed in the tracker. 2. In our Contracted Services/Vendor Management processes, we will use the requirements outlined in the Contract Tracker to de�ine the requirements for vendor procurement. In cases like this one, that would include checking the vendor’s status in SAM. Those �indings will be documented in our Vendor Management System, along with other vendor characteristics. We will also be doing routine updates and checks to ensure the ongoing accuracy of the information about vendors once they are in our Vendor Management database. Management intends to ensure that our vendor contracts would incorporate attestations re�lecting any of the requirements for vendors identi�ied through the Contracts/Grants Management processes. Responsible Individuals: Tara Townsend, President and Core Operating Of�icer, and Eden HurdSmith, Vice President of Community Development Solutions. Anticipated Completion Date: Late 2nd Quarter/Early 3rd Quarter 2026