Finding Text
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Assistance Listing Number: 14.251 Pass-Through Agency: N/A Pass-Through Numbers: N/A Award Period: 8/13/2024 – 8/31/2032 Type of Finding: Material Weakness in Internal Control over Compliance Condition: The Organization did not maintain documentation demonstrating that suspension and debarment verifications were performed for vendors receiving Federal funds. In addition, the Organization was unable to provide evidence of ongoing monitoring or procedures designed to ensure compliance with Federal suspension and debarment requirements. Criteria: Pursuant to 2 CFR § 200.329, non-Federal entities are responsible for monitoring activities under Federal awards to ensure compliance with applicable Federal requirements. This responsibility includes establishing procedures to verify that vendors and contractors receiving Federal funds are not suspended or debarred from participating in federally funded programs. Cause: The Organization has not established or implemented formal policies and procedures for monitoring vendor compliance with suspension and debarment requirements applicable to Federal awards. Effect: Without documented verification and monitoring procedures, the Organization cannot demonstrate compliance with Federal suspension and debarment requirements. As a result, there is an increased risk that Federal funds could be expended with vendors that are ineligible to participate in federally funded programs. Repeat Finding: No Recommendation: We recommend that management establish and implement formal policies and procedures requiring suspension and debarment verification for vendors receiving Federal funds. Such procedures should include documenting initial and periodic verifications, maintaining evidence of the reviews performed, and retaining records sufficient to demonstrate compliance with applicable Federal requirements. Views of responsible officials: There is no disagreement with the audit finding.