Finding Text
2025-003 – Suspension and Debarment U.S. Department of Housing and Urban Development 14.850 – Public Housing Operating Fund I. Procurement and Suspension and Debarment – Significant Deficiency - Internal Control Condition: During review of the Public Housing Operating Fund program, RBT noted the Authority did not document verification that vendors were not suspended or debarred from participating in federally funded programs. The Authority was unable to provide evidence that suspension and debarment checks were conducted prior to contract award or payment. Criteria: Non-federal entities are prohibited from contracting with or making sub-awards under covered transactions to parties that are suspended or debarred. "Covered transactions" include contracts for goods and services awarded under non-procurement transactions that are expected to equal or exceed $25,000, or meet certain criteria as specified in 2 CFR 180.220. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR 180.995 and by the agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transactions. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR 180.300). Cause: The Authority does not have a central, uniform location to document the controls in place for documenting practices related to suspension and debarment verification during the procurement process. Effect: Failure to verify and document suspension and debarment status increases the risk that the Authority could enter into contracts with ineligible vendors, resulting in potential noncompliance with federal procurement requirements. Questioned Costs: None identified. Perspective: None of the twenty-five purchases selected for testing contained documentation demonstrating that vendor verification procedures over suspension and debarment were performed. Repeat Finding: Not a repeat finding. Recommendation: RBT recommends the Authority implement procedures to formally document its review of the federal and state suspension and debarment lists for applicable vendors. Documentation of the verification, such as a screenshot or record of the search in the System for Award Management (SAM.gov), should be retained in the procurement file to demonstrate compliance with federal regulations. Auditee's Response: See corrective action plan.