Finding Text
Suspension and Debarment Federal Agency: Department of Housing and Urban Development Federal Program: Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Assistance Listing Number: 14.251 Award Period: February 5, 2024 – August 31, 2031 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matter Criteria or specific requirement: Per 2 CFR 200.214 and 2 CFR 180, nonfederal entities must not contract with or make awards to parties that are suspended or debarred and must verify the status of covered parties (e.g., through SAM.gov) and maintain documentation of that verification. Condition: Of four procurement transactions tested, four lacked documentation evidencing suspension and debarment verification. Questioned costs: None. Context: We tested 4 vendor transactions within the major program; none included documentation evidencing suspension and debarment verification. Cause: The deficiency appears to be due to the absence of a formal process and/or review control to document suspension and debarment verification for vendors prior to contract execution or payment. Effect: Failure to document suspension and debarment checks increases the risk of contracting with ineligible vendors and may result in noncompliance and questioned costs. Repeat finding: No. Recommendation: We recommend the Organization implement a formal procedure to verify and document suspension and debarment status (e.g., SAM.gov checks) for all covered transactions, including retaining evidence of the verification and incorporating a review control prior to payment or contract approval. View of responsible officials: There is no disagreement with the audit finding.