Finding Text
Criteria Title 2 CFR §200.318(a), requires a non-Federal entity to maintain and use documented procurement procedures that conform to the procurement standards contained in 2 CFR §§200.317 through 200.327. Condition The Organization did not maintain documented procurement procedures that incorporated the procurement standards required by Uniform Guidance. During the year ended December 31, 2025, HUD funds were used to reimburse costs associated with a mixed-finance capital construction project. The general contractor for the project was selected prior to the commitment of HUD funding for the project. The grant agreement disclosed a contractor was already selected Cause Management had not previously administered federal funding for a capital construction project subject to Uniform Guidance procurement standards and accordingly had not developed formal written procurement procedures conforming to 2 CFR §§200.317 through 200.327. In addition, the general contractor was selected prior to the commitment of HUD funding to the project. Effect The absence of documented procurement procedures increases the risk that procurements funded in whole or in part with federal awards may not comply with applicable federal procurement requirements. This condition represents a significant deficiency in internal control over compliance and noncompliance with the Procurement and Suspension and Debarment compliance requirement. Questioned Costs None ($0). Context This finding relates to the Economic Development Initiative major program (ALN 14.251). This is the first year the program was audited as a major program and therefore is not a repeat finding. Recommendations We recommend the Organization develop, formally adopt, and implement written procurement procedures that conform to the requirements of 2 CFR §§200.317 through 200.327 and apply those procedures to all procurement activity funded in whole or in part by federal awards. Views of Responsible Officials Management agrees with the finding and will develop and implement written procurement procedures consistent with Uniform Guidance requirements.