Finding Text
Program: Continuum of Care, Emergency Solutions Grant Program
Federal Financial Assistance Listing No.:14.267, 14.231
Federal Agency: U.S. Department of Housing and Urban Development
Pass-through: Sacramento Steps Forward, Sacramento County Department of Human Assistance
Award Year: 2023
Compliance Requirement: Procurement, Suspension and Debarment
Grant Award Number: CA0955L9T032108, CA0955L9T032209, CA0143L9T032114, CA0143L9T032215, CA1303L9T032107, CA1303L9T032208, DHA-NM-03-23, DHA-NM-03-24
Type of Finding: Material Weakness in Internal Controls Over Compliance
Criteria:
2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award.
The nonfederal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any contractor which is suspended or debarred or is otherwise excluded from the central contractor registry.
Condition Found:
The Organization’s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, the Organization did not retain documentation to support the procedures performed to ensure compliance with suspension and debarment requirements.
Cause:
The Organization does not typically receive federal financial assistance that is subject to procurement and suspension and debarment regulations; consequently, certain elements required by the Uniform Guidance were missing.
Effect:
Lack of complete procurement, suspension, and debarment policies and not retaining documentation to support compliance with suspension and debarment requirements could result in noncompliance with Uniform Guidance.
Questioned Costs:
No questioned costs were identified as a result of our procedures.
Context/ Sampling:
Suspension and debarment was applicable to 9 contractors totaling $1,989,106 under the Continuum of Care Program and three contractors totaling $227,772 under the Emergency Solutions Grant Program. We tested all contractors with total payments exceeding $25,000 during the year.
Repeat Finding from Prior Years:
Yes, Finding 2022-03.
Recommendation:
We recommend that management develop a written procurement policy that conforms with Uniform Guidance. In addition, we recommend that management implement procedures and control processes to retain documentation supporting compliance with major federal program compliance requirements regarding suspension and debarment.
Views of Responsible Officials:
Management agrees. See separately issued Corrective Action Plan.