Finding Text
2023-001 Procurement, Suspension and Debarment
Information on the Federal Program:
Program Name: Congressional Appropriations Program
Federal Agency: United States Department of Treasury
AL Number/Name: 21.U01 NeighborWorks® System Program FY 2023 Appropriation
Criteria: According to 2 CFR § 200.318(a), General Procurement Standards, the non-Federal entity
must have and use documented procurement procedures, consistent with State and local laws and
regulations, 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 the Uniform Guidance.
In addition, 2 CFR §200.318(i) states that the non-federal entity must maintain records sufficient to
detail the history of the procurement. These records are required to include, but are not necessarily
limited to the following: rationale for the method of procurement, selection of contract type,
contractor selection or rejection, and the basis for the contract price. All procurement transactions
must be conducted in a manner providing full and open competition consistent with §200.319 and
must be performed using the appropriate procurement method as outlined in §200.320.
Furthermore, 2 CFR §200.320(c), Noncompetitive Procurement, states that there are specific
circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can
only be awarded if one or more of the following circumstances apply: (1) The acquisition of property
or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold; (2)
The item is available only from a single source; (3) The public exigency or emergency for the
requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The
Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement
in response to a written request from the non-Federal entity; or (5) After solicitation of a number of
sources, competition is determined inadequate.
Condition: During our review of the Corporation’s procurement policies, we noted that the
Corporation’s written internal procurement policies and procedures during the first quarter of fiscal
year 2023 are not in conformity with the requirements identified in the Uniform Guidance
procurement requirements.
During our testing of the procurement, suspension and debarment compliance requirement, we
selected 10 procurement samples for testing. We noted that 2 out of the 10 procurement samples
were procured by way of a noncompetitive proposal process through a solicitation from only one
source under the criteria of either: (1) the item is available only from a single source or (2) there is
an urgent and compelling need for the goods or services. However, based on our review of the 2 procurement files, we noted that the 2 procurement files do not appropriately justify the use of a
noncompetitive procurement process due to the following reasons:
1. The supplies or services being procured are sold or provided by other vendors, not just by a
single source.
2. Incumbency of the vendor is not a valid noncompetitive procurement justification.
3. Contracting without providing for full and open competition shall not be justified on the basis
of (1) lack of advance planning by the requiring activity; or (2) concerns related to the amount
of funds available for the acquisition of supplies or services.
Cause: The Corporation’s personnel did not adhere to the federal requirements and the Corporation’s
internal procurement policies and procedures particularly on the use of noncompetitive
procurements.
Effect: Failure to perform procurement procedures in accordance with the Corporation’s
documented policies and the procurement procedures under the Uniform Guidance procurement
requirements could result in expenditures incurred being disallowed.
Questioned Costs: Not determinable.
Context: This is a condition identified per review of the Corporation’s compliance with the specified
requirements using a non-statistical sample. The total federal expenditures related to the 2
noncompetitive procurements is $105,985 for the year ended September 30, 2023. The total contract
value of the 2 noncompetitive procurements is $430,000 with contract terms that ranges from 6
months to 4 years. The total federal expenditures for all of the 10 procurement samples selected
for testing is $2,472,158 for the year ended September 30, 2023.
Repeat Finding: This is a repeat finding of 2022-001.
Recommendation: We understand that the Corporation updated its procurement policies and
procedures in March 2023 to conform with the requirements identified in the Uniform Guidance
procurement requirements. We recommend that the Corporation should ensure that the use of
Noncompetitive Procurement criteria under the Uniform Guidance procurement requirements are
adhered to and appropriate justifications for these contracts are used and documented
appropriately. In addition, the Corporation should continue to use the system in place to track and
monitor the terms of vendor contracts in order to plan in advance if the contracts will need to be
subject to a competitive procurement process providing full and open competition as required.
Views of Responsible Officials: Management agrees with the finding and recommendations set forth
within and has developed a corrective action plan to address the instances of noncompliance
identified and lapses in prescribed internal controls.