Finding Text
Condition: For five of the seven contracts tested, the Authority was unable to provide adequate documentation to demonstrate that the contracts were properly procured. Missing documentation included Notice of Solicitation, contract proposals, Certification of Bidders, and documentation of evaluation or a bid listing with amounts. As a result, we were unable to determine whether the contracts were awarded in accordance with HUD procurement requirements. Context: The auditor haphazardly selected 7 contract files out of the population of 17 contracts procured during the year end September 30, 2024, which we consider to be a statistically valid sample. As part of our audit procedures, we reviewed procurement files to assess areas of compliance with HUD requirements and the effectiveness of internal controls over procurement activities. Criteria: The Authority’s procurement policy, HUD rules and regulations, and 2 CFR 200.318 require that certain procedures be performed in the procurement of vendors to ensure that fair and open competition results in services of the best possible value to the Authority, and that sufficient documentation be maintained to support the procurement method selected for the contract award process. Cause: The Authority experienced staffing and operational changes during and subsequent to the year ended September 30, 2024. Due to staffing changes and ineffective controls over the procurement process, the Authority was unable to ensure procurement requirements were consistently followed and that proper documentation was retained. Effect: As a result of the lack of adequate procurement documentation, the Authority is unable to demonstrate that contracts were awarded in compliance with the Authority’s and HUD’s procurement requirements. Questioned Costs: $343,477. Auditor’s Recommendations: The Authority should strengthen their internal controls over procurement by implementing standardized procurement procedures, including documentation checklists and supervisory review processes to ensure compliance with procurement requirements. The Authority should also provide training to staff involved in the process to ensure they are aware of the requirements and processes. Management Response: See Corrective Action Plan.