Finding 1163272 (2022-003)

Material Weakness Repeat Finding
Requirement
B
Questioned Costs
-
Year
2022
Accepted
2025-12-02

AI Summary

  • Core Issue: Serenity House lacks formal policies for procurement and conflict of interest, violating 2 CFR §200.318(a) & (c).
  • Impacted Requirements: Failure to document procurement procedures and conflict of interest standards puts Serenity House at risk of non-compliance with federal grant regulations.
  • Recommended Follow-Up: Implement a procurement and conflict of interest policy that meets Uniform Guidance standards; management is already preparing a Corrective Action Plan.

Finding Text

Criteria or specific requirement: 2 CFR §200.318(a) of the Uniform Guidance states recipients of federal awards must maintain and use documented procedures for procurement transactions under a federal award, including for acquisition of property or services. These procedures must align with Uniform Guidance Standards. 2 CFR §200.318(c) of the Uniform Guidance states organizations must maintain written standards of conduct covering conflicts of interest and governing the actions of employees engaged in the selection, award, and administration of contracts. Condition: No formal policy for procurement or conflict of interest exists. Context: During procurement purchase testing, it was noted no formal policy over procurement or conflict of interest existed that met the requirements of 2 CFR §200.318(a) & 2 CFR §200.318(c). Cause: Serenity House was not aware of the requirements in the Uniform Guidance. Effect: If there were procurement purchased over the micro purchase threshold of $10,000, Serenity House could be out of compliance with federal grants. Repeat Finding: No. Recommendation: Recommend adopting a procurement and conflict of interest policy that aligns with Uniform Guidance. Views of responsible officials: Management agrees with the finding and has prepared a Corrective Action Plan.

Corrective Action Plan

Significant Deficiency in Internal Control over Compliance Details: During procurement purchase testing, it was noted no formal policy over procurement or conflict of interest existed that met the requirements of 2 CFR §200.318(a) & 2 CFR §200.318© Recommendation: Recommend adopting a procurement and conflict of interest policy that aligns with Uniform Guidance. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Include Conflict of interest in current financial management plan. The recipient or subrecipient must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award, and administration of contracts. No employee, officer, agent, or board member with a real or apparent conflict of interest may participate in the selection, award, or administration of a contract supported by the Federal award. A conflict of interest includes when the employee, officer, agent, or board member, any member of their immediate family, their partner, or an organization that employs or is about to employ any of the parties indicated herein, has a financial or other interest in or tangible personal benefit from an entity considered for a contract. An employee, officer, agent, and board member of the recipient or subrecipient may neither solicit nor accept gratuities, favors, or anything of monetary value from contractors. However, the recipient or subrecipient may set standards for situations where the financial interest is not substantial or a gift is an unsolicited item of nominal value. The recipient's or subrecipient's standards of conduct must also provide for disciplinary actions to be applied for violations by its employees, officers, agents, or board members. Name(s) of the contact person(s) responsible for corrective action: Cora Alyea Planned completion date for corrective action plan: October 17, 2025

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

  • 1163271 2022-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Recovery Funds $4.69M
14.231 Emergency Solutions Grant Program $456,242
14.267 Continuum of Care - Youth Homeless Demonstration Program (2022) $148,398
14.267 Continuum of Care - SunBelt Apartments (2021 - 2022) $103,441
14.267 Continuum of Care - Clallam Families Rapid Re-Housing (2021 - 2022) $68,540
14.267 Continuum of Care - SunBelt Apartments (2022 - 2023) $17,041
14.267 Continuum of Care - Youth Homelessness Demonstration Program Supportive Services Only $12,380
14.267 Youth Homelessness Demonstration Program $8,768
14.267 Continuum of Care - Clallam Families Rapid Re-Housing (2022 - 2023) $5,330
93.958 BLOCK GRANTS FOR COMMUNITY MENTAL HEALTH SERVICES $1,250
93.959 BLOCK GRANTS FOR PREVENTION AND TREATMENT OF SUBSTANCE ABUSE $1,200