Finding 1175053 (2025-001)

Material Weakness Repeat Finding
Requirement
I
Questioned Costs
-
Year
2025
Accepted
2026-02-23

AI Summary

  • Core Issue: The Organization failed to follow procurement requirements when selecting an architect for the Economic Development Initiative.
  • Impacted Requirements: Compliance with procurement processes was inadequate, leading to a repeat finding.
  • Recommended Follow-Up: The Organization should independently review all compliance requirements instead of relying on the developer for adherence.

Finding Text

Assisted Listing Number/Federal Program/Granting Agency: 14.251 Economic Development Initiative Criteria: The Organization must have adequate controls in place over compliance with procurement requirements. Statement of Condition: As part of our review of the Economic Development program, we noted there were no procurement process performed during the selection of the architect. Questioned Costs: It is not practicable to estimate questioned costs. Cause: The Organization relied on developer, a third party, for compliance with requirements, the developer, a third party, did not have a procurement policy and was not aware of compliance requirements related to procurement. Effect or Possible Effect and Perspective: The Organization did not comply with procurement requirements in the selection of the architect. Repeat Finding: A repeat finding. Recommendation: We recommend the Organization review all compliance requirements with the Economic Development Initiative grant program themselves and not rely on developer, a third party, to ensure all compliance requirements are being followed. Views of Responsible Officials: Paula Maden, agrees, via the corrective action plan.

Corrective Action Plan

Finding Reference #: 2025-001 Federal Award Agency: Housing and Urban Development Name of Contact Person: Karen Long Corrective Action: The Organization has familiarized itself with all requirements with the Economic Development Initiative EDI) grant program, including the procurement requirements under EDI grant Article IV – General Federal Requirements, Section F. In the future, it will ensure that this requirement is complied with before contracting for goods and services or passing funds to a subrecipient. It will take the following steps: 1. Review the Uniform Administrative Requirements, Cost Principles, and Audit Requirements in 2 CFR part §200.317-§200.327. 2. Create procedures policy for procurement transactions under a Federal award or subaward. 3. Ensure CCHC compliance and subrecipient compliance with procurement standards outlined in 2 CFR part §200.317-§200.327. Date of Planned Corrective Action: 01/14/2026 Submitted by: Karen Long

Categories

Procurement, Suspension & Debarment

Programs in Audit

ALN Program Name Expenditures
10.415 RURAL RENTAL HOUSING LOANS $4.61M
14.251 ECONOMIC DEVELOPMENT INITIATIVE, COMMUNITY PROJECT FUNDING, AND MISCELLANEOUS GRANTS $1.99M
10.427 RURAL RENTAL ASSISTANCE PAYMENTS $618,218
10.415 RURAL RENTAL HOUSING LOANS - Interest subsidy $109,023
14.228 COMMUNITY DEVELOPMENT BLOCK GRANTS/STATE'S PROGRAM AND NON-ENTITLEMENT GRANTS IN HAWAII $23,965
21.026 HOMEOWNER ASSISTANCE FUND $6,025