Finding 22110 (2022-002)

Significant Deficiency 2 CFR ? 2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR ? 200.302 (b) (6) and (7) which requires the Authority to establish written procedures for determining the allowability of costs in accordance with Subpart E - Cost Principles and the terms and conditions of the Federal award and establish written procedures to implement the requirements of ? 305 Payment. Additionally, 2 C.F.R. ? 2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 C.F.R. ? 200.318(a) which states the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327. Although the Authority did have written standard operating procedures requiring purchase orders, they did not have an approved purchase order or contract on file for 2 of the 50 purchases tested. Failure to have proper controls in place to ensure policies and procedures are being followed could result in unallowable costs and procurement noncompliance. The Authority should follow their written standard operating procedures and implement controls to ensure allowability of costs and procurement in accordance with federal grants.