Finding Text
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (Eviction Rental Assistance Program 2.0) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP0002 2022 Pass-Through Agency: Washington State Department of Commerce Pass-Through Number(s): 21-4619C-104 Award Period: 10/1/2021 - 6/30/2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Compliance Criteria or specific requirement: Uniform Guidance requires non‑Federal entities to use documented procurement procedures consistent with applicable federal standards (2 CFR §§200.317–200.327). In addition, Uniform Guidance requires non‑Federal entities to maintain written standards of conduct governing conflicts of interest and organizational conflicts of interest for employees, officers, and agents engaged in the selection, award, and administration of federal awards (2 CFR §200.318(c)(1)). Condition: The auditee did not have a written procurement policy or a written conflict of interest policy in place during the audit period. As a result, the auditee did not have formal, documented procedures to govern procurement activities or to address potential conflicts of interest related to the administration of federal awards. Context: Procurement and conflict of interest are required compliance areas to be evaluated under the OMB Compliance Supplement for the Single Audit. As part of obtaining an understanding of internal control over compliance, the auditors evaluated whether the auditee had established the required written procurement procedures and standards of conduct addressing conflicts of interest. During this evaluation, it was noted that the auditee did not have a written procurement policy or a written conflict of interest policy in place during the audit period. Cause: The auditee has not formally documented or adopted procurement and conflict of interest policies as required by Uniform Guidance. While management performs certain procurement and oversight activities informally, these practices have not been codified into written policies to ensure consistent application and compliance with federal requirements. Effect: The absence of formal procurement and conflict of interest policies increases the risk that procurement activities may not be conducted in accordance with Uniform Guidance requirements and that actual or perceived conflicts of interest may not be appropriately identified, disclosed, or mitigated. Without documented policies, the auditee is at increased risk of noncompliance with federal award requirements related to procurement standards and ethical conduct. Repeat Finding: Yes. Recommendation: We recommend that management develop, adopt, and implement written procurement and conflict of interest policies that comply with Uniform Guidance requirements. These policies should address procurement standards, including methods of procurement and oversight, and establish standards of conduct governing conflicts of interest for employees, officers, and agents involved in the administration of federal awards. Management should also ensure that these policies are communicated to relevant personnel and applied consistently. Views of responsible officials: Management agrees with the finding and has prepared a Corrective Action Plan.