Finding Text
2024-003 - Internal Control Over Compliance, Material Noncompliance - Procurement and Suspension and Debarment - Material weakness Federal program information: Funding Agency U.S. Department of Housing and Urban Development Program Title Indian Housing Block Grant Federal Assistance Listing Number 14.867 Condition: During testing of five procurement transactions, exceptions were identified in two instances. In one sample, verification of the vendor’s status in SAM.gov was performed after the contract award date, indicating noncompliance with pre-award suspension and debarment requirements. In another sample related to the purchase of a vehicle, the procurement file was missing evidence of comparative bidding. Criteria: In accordance with 2 CFR §§ 200.318–200.327, non-federal entities must follow documented procurement procedures for federally funded purchases exceeding the micro-purchase threshold. These procedures require full and open competition, appropriate procurement methods based on dollar thresholds, and maintenance of records sufficient to detail the history of procurement, including the method used, selection of contractor, and basis for price. Cause: The Housing Entity did not consistently follow established procurement procedures to ensure adequate competition, proper documentation of the procurement process, and timely verification of vendor eligibility. Effect: The Housing Entity was unable to demonstrate compliance with federal procurement and suspension and debarment requirements due to noncompliance with procurement procedures and untimely vendor verification, constituting a material weakness. Auditor's Recommendation: The Housing Entity should ensure SAM.gov verification is completed before awards, maintain complete procurement documentation, and provide staff training to comply with federal procurement requirements.