Finding Text
2024-002 – Allowable Costs/Cost Principles – Competitive Bid Support
Finding Type. Immaterial noncompliance; Significant deficiency in internal controls over compliance (Allowable Costs / Cost Principles)
Federal program
U.S. Department of Housing and Urban Development
· Supportive Housing for the Elderly (ALN# 14.157)
Criteria. Under Section 202 of the National Housing Act of 1959, Project management is responsible for approving, correctly classifying, and determining allowability of costs prior to disbursement.
Condition. Out of 40 disbursement selections, we noted 1 instance where competitive price quotes were not maintained as dictated by the Procurement Policy.
Cause. Management has not properly implemented internal control procedures to ensure that, when necessary per policy, competitive price checks have been obtained and properly documented.
Effect. As a result of this condition, the Project is not able to support that they secured favorable pricing terms as per the Procurement Policy.
Questioned Costs. The total amount of the disbursement where competitive price quotes were not maintained was $41,104.
Recommendation. We recommend that management properly follow existing procedures and controls in place to ensure all purchase support and approval documentation is obtained and retained.
View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.