Finding Text
Suspension and Debarment Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name / Assistance Listing Number / Pass-Through Agency(ies) / Pass-Through Number(s): • COVID-19 - Substance Abuse and Mental Health Services Projects of Regional and National Significance, 93.243 o Passed through the State of California, Department of Health Care Services, 21-10299 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement, suspension, and debarment. Shatterproof should have internal controls designed to ensure compliance with those provisions. Condition: During our testing, we noted Shatterproof did not have adequate internal controls in place during 2024 to ensure vendors were not suspended or debarred. Questioned costs: None Context: During our testing, it was noted that Shatterproof was not reviewing vendors prior to entering into a contract with a vendor to ensure the vendor was not on the suspended or debarred vendor list maintained by the General Services Administration. We further noted that internal controls over compliance with the provisions of suspension and debarment were implemented in 2025. Cause: Internal controls over compliance with the provisions of suspension and debarment were not implemented during 2024. Effect: The auditor noted no instances of noncompliance with the provisions of suspension and debarment; however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Repeat Finding: No Recommendation: We recommend Shatterproof implement controls to ensure an adequate review process is in place to review potential contractors to determine and document they are not suspended or debarred. Views of responsible officials: There is no disagreement with the audit finding.