Finding Text
Finding 2024-010 – Procurement (Material Weakness and Noncompliance)
Identification of the Federal Program: Community Program to Improve Minority Health, ALN 93.137, Department of Health and Human Services (Minority Health); Coronavirus State and Local Fiscal Recovery Funds, ALN 21.027, Department of the Treasury (CRF).
Criteria: 2 CFR 200.317-327 establishes procurement standards for nonfederal entities. This includes different requirements based on the amount of purchases made from the vendor during the year. Specifically, the recipient or subrecipient must maintain and use documented procedures for procurement transactions under a federal award or subaward, including for acquisition of property or services. Per the City’s Fiscal Policy and Procedures Manual, the simplified acquisition method has a lower threshold of $15,000. All contracts and purchases over $15,000 must be bid.
Condition: We selected eight vendors for procurement testing. Of those eight, it was noted that for five vendors the City did not document the appropriate procurement procedures took place.
Cause: Minority Health - the City contracted or accumulated costs for four vendors over the simplified acquisition threshold and did not provide documentation of bid procedures. CRF - the City contracted one vendor over the simplified acquisition threshold and did not provide documentation of bid procedures.
Effect: The City did not have appropriate documentation to support compliance with the procurement policy.
Questioned Costs: Minority Health - $433,369; CRF - $22,813
Recommendation: We recommend the City reinforce its procurement policies through regular training and clear communication to all relevant staff members. Additionally, implementing a periodic review process to ensure compliance with this policy can help prevent future occurrences.
Views of Responsible Officials: The City agrees with the finding. See Management’s View and Corrective Action Plan included at the end of the report.