Finding Text
2025-001: Lack of Documentation of Suspension/Debarment Testing at Time of Procurement Federal Department: Department of Housing and Urban Development Assistance Listing #: 14.251 Internal Controls Significant Deficiency & Noncompliance Category of Finding – Procurement, Suspension, and Debarment Criteria - In accordance with 2 CFR 200.214 and 2 CFR part 180, recipients of federal funds must not enter into covered transactions with parties that are suspended or debarred. The Uniform Guidance requires that entities verify the exclusion status of vendors or subrecipients by checking the System for Award Management (SAM) Exclusions list (https://sam.gov) prior to entering into a covered transaction and keeping documentation of checking SAM before entering into those contracts. Condition - The Organization has a written policy requiring verification that vendors involved in covered procurement transactions under this program are not suspended or debarred. For the period under audit, program management represented that suspension and debarment checks were performed prior to entering into agreements with vendors subject to this requirement; however, the Organization did not retain documentation evidence that these checks were performed. Context: During the audit, we performed SAM Exclusions checks over all vendors over $25,000 paid under this grant, and no vendors were identified as suspended, debarred, or otherwise excluded. However, documents of the testing performed by the Organization were not properly kept. Cause - Management indicated that while the required checks were performed by the program manager, there was not a formal process to ensure that documentation of the completed SAM checks (such as dated screenshots, printouts, or other electronic evidence) was retained in the procurement or grant files. Effect - Because documentation of the suspension and debarment checks was not retained, the Organization is unable to demonstrate, based solely on its records, that it consistently complied with the suspension and debarment requirements for covered transactions during the period under audit. This represents a weakness in internal control over compliance and results in noncompliance with the documentation expectations for this compliance requirement. Recommendation - We recommend that the Organization strengthen its internal controls over documentation procurement and suspension and debarment for federal programs by: Implementing a monitoring or review control (such as periodic file reviews) to verify that required documentation is consistently maintained. CLARE HOUSING SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended December 31, 2025 Auditee’s comments and response – Clare Housing will continue to conduct verifications which are consistent with the organization’s financial policies by validating the potential vendors’ status in the System for Award Management (www.SAM.gov) portal and document the verification with a screenshot of the validation before any payment to a vendor is completed. Clare Housing will also establish a centralized electronic filing system that houses the documentation for suspension/debarment verification, and will track and report any findings to management, including corrective actions for any recurring deficiencies. Responsible party for corrective action: Zach Petroski, Director of Finance Repeat Finding: No