Finding 1155107 (2024-002)

Federal Agency: Department of Housing and Urban Development Federal Program Name: Continuum of Care Assistance Listing Number: 14.267 Federal Award Identification Number and Year: SC-110351 - 2024 SC-111132 - 2024 SC-110353 - 2024 SC-111134 - 2024 SC-110355 - 2024 SC-110349 - 2024 SC-111130 - 2024 Pass-Through Agency: Pierce County Pass-Through Number(s): LP9XHDGASCJ3 Award Period: SC-110351: 7/1/23-6/30/24 SC-111132: 7/1/24-6/30/25 SC-110353: 12/1/23-11/30/24 SC-111134: 12/1/24-11/30/25 SC-110355: 6/1/23-8/31/24 SC-110349: 5/1/23-4/30/24 SC-111130: 5/1/24-4/30/25 Type of finding: Material Weakness in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR 200.303(a), recipients of federal funds must "establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award." Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred (2 CFR sections 200.212 and 200.318(h); 2 CFR section 1800.30; 48 CFR section 52.209-6). Additionally, an entity is required to have policies and procedures in place for verifying the above requirements. Condition: During our suspension and debarment testing, CLA noted no suspension and debarment policy in place and no suspension and debarment check was performed over a covered transaction. Questioned costs: $7,442 of known questioned costs. Context: There was only one covered transaction subject to suspension and debarment check that had a contract amount exceeding $25,000 but only $7,442 was paid with federal program. However, no suspension and debarment check was performed. CLA elected to perform a SAM.gov check and noted that vendor (Locke System) is not debarred as of the date of the audit procedure. Cause: Share & Care House and Subsidiary lacks sufficient understanding of the compliance requirements surrounding covered transactions and suspension and debarment check requirements. Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance. Improper understanding caused Share & Care House and Subsidiary to be noncompliant with program requirements over suspension and debarment. Repeat finding: No. Recommendation: CLA recommends Share & Care House and Subsidiary to develop and implement a suspension and debarment policy that meets the requirements outlined in Uniform Guidance. CLA also recommends increased training for those individuals involved in procurement and contract approval process to ensure suspension and debarment checks are performed on all covered transactions. Views of responsible officials: Management agrees with the finding and has provided its corrective action plan.