Finding Text
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Continuum of Care Program Assistance Listing Number: 14.267 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Non-federal entities must verify that contractors and subrecipients are not suspended, debarred, or otherwise excluded from receiving federal funds. This verification must be documented and performed prior to entering into covered transactions. Condition: The Organization does not have formal written procedures in place to verify suspension and debarment status prior to entering into contracts or subawards. No documentation was provided to demonstrate that checks were performed against the System for Award Management (SAM.gov) for selected vendor. Questioned Costs: None. Context: During our review of the procurement policy and vendor agreements, we noted that the Organization did not have a procedure in place to document verification of vendor eligibility through SAM.gov. Cause: The Organization has not implemented formal policies or internal controls to ensure compliance with suspension and debarment verification requirements. Effect: Without proper verification procedures, the Organization risks engaging with vendors who are ineligible to receive federal funds, potentially resulting in noncompliance or financial risk. Repeat Finding: No. Recommendation: We recommend that management establish and implement written procedures to verify suspension and debarment status prior to executing vendor contracts. The SAM.gov verification procedure should be documented and retained in the procurement file. Views of Responsible Officials: Management of the Organization agrees with the above finding and recommendations and has developed and implemented a formal suspension and debarment policy.