Finding Text
Type of Finding: Material Weakness in Internal Control over Compliance Federal Agency: Department of Housing and Urban Development; Department of Veterans Affairs Federal Program Name: Emergency Solutions Grant Program; Veterans Affairs Supportive Services for Veteran Families Program Assistance Listing Number: 14.231; 64.033 Federal Award Identification Number and Year: 14.231: SC-111170-2, CW2254906, CW2259491 64.033: 2020-WA-146-24, 2020-WA-146-25, 20-WA-146-FY24, 20-WA-146-FY25 Pass-Through Agency: 14.231: Pierce County Human Services, City of Tacoma 64.033: N/A – Direct Pass-Through Number(s): 14.231: SC-111170-2, CW2254906, CW2259491 64.033: N/A – Direct Award Period: 14.231: July 1, 2024 – June 30, 2025; November 1, 2022 – December 31, 2024 64.033: October 1, 2019 – September 30, 2026 Criteria or specific requirement: 2 CFR 180.300 indicates that participants must check SAM exclusions, collect a certification form, or add a clause or condition to the covered transaction before entering into a covered transaction. 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 section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. 2 CFR 200.318(i) requires recipients of federal funds to "maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price." Condition: For selected procurements, insufficient documentation was available to support the procurement decision, ensure the correct procurement method was used, and to verify open competition. All selected covered transactions had a suspension and debarment check performed during the fiscal year under audit; however, checks should be performed prior to entering into a covered transaction. Questioned costs: Note: all vendors ultimately determined not to be suspended or debarred, therefore questioned costs only apply to procurement samples. Context: 14.231:1/5 selected procurements lacked sufficient documentation to support procurement process; 4/5 selected covered transactions lacked support to evidence suspension and debarment was checked prior to entering into the covered transactions. 64.033: 4/5 selected procurements lacked sufficient documentation to support procurement process; 4/5 selected covered transactions lacked support to evidence suspension and debarment was checked prior to entering into the covered transactions. Cause: There is a misunderstanding that costs that are not directly procured for a federal program may be subject to suspension and debarment checks and a misunderstanding that the full contract cost should be considered when determining if a contract is a covered transaction. There is inadequate document management for historic paper files. There are different processes implemented across the various Divisions, which results in inconsistent application of compliance requirements and controls. Effect: Increased possibility of entering into a covered transaction with vendors/contractors who are federally suspended or debarred or to procure goods and services that are less-than-ideal for the program needs. Repeat Finding: 2024-001 Recommendation: CLA recommends performing suspension and debarment checks on all vendors that may be paid for (even if only in part) with federal funds, if the full value of the contract is likely to exceed $25,000. Additional checks should be performed on a regular basis (recommended annually) so that changes to vendor status are caught timely. This may require modification to organizational policies and training amongst staff who perform procurement activities. CLA also recommends that a consistent procurement process and documentation location be used across all Divisions to ensure documentation to support procurement decisions is accessible and maintained. Updated procurement decisions should be documented at the initiation of any new procurements, as well as before entering into any substantial amendments to existing contracts/agreements. Views of responsible officials: There is no disagreement with the audit finding.