Finding Text
Finding 2023-001
Noncompliance and material weakness in internal control over compliance with procurement requirements
Federal Agency: Department of Housing and Urban Development
Assistance Listing Number: 14.251
Assistance Listing Name: Community Project Funding
Award Number: B-23-CP-WA-1530
Criteria
Nonfederal entities must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326.
For acquisitions exceeding the simplified acquisition threshold, the nonfederal entity must use one of the
following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section
200.320(b)(i); the competitive proposals method under the conditions specified in 2 CFR section 200.320(b)(2); or
the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of
four circumstances are met, in accordance with 2 CFR section 200.320(c)).
Condition and Effect
During our testing of the procurement compliance requirement, we noted that the Aquarium had not performed
the required procurement procedures for one of the vendors in our sample. For this one vendor the acquisition
exceeded the simplified acquisition threshold. The Aquarium used a noncompetitive method to select the vendor;
however, the acquisition did not meet one of the four qualifying circumstances for a noncompetitive procurement.
Cause
The Aquarium’s system of internal control did not operate effectively to prevent the Aquarium from incorrectly
using a noncompetitive procurement process, when instead a proscribed competitive procurement process
should have been followed.
Context
During the year under audit there was a total population of nine vendors to which the procurement compliance
requirement applied. For our testing of the procurement compliance requirement, we tested a sample of two
vendors from the total population of nine. As noted in the condition section above, our testing found that the
Aquarium did not comply with the procurement compliance requirements for one of the vendors tested. We also
noted that the procurement activity for this vendor occurred in 2017 and prior to the Aquarium seeking federal
funding for the Ocean Pavilion project.
Questioned Costs
Payments to that one vendor during 2023 that were charged to the major federal program totaled $118,845.
Repeat Finding
This is not a repeat finding. Recommendation
We recommend management provide training for those involved with procurement activities for acquisitions that
will be charged to federal awards to ensure the Aquarium’s procurement policies and procedures are consistently
applied. We also recommend management update the Aquarium’s procurement policies and procedures to
ensure they incorporate the required procedures and controls to ensure compliance with the procurement
requirements in 2 CFR 200 (the Uniform Guidance) for acquisitions that will be charged to federal awards.
Views of Responsible Officials and Corrective Action Plan
Management agrees with the finding and has provided the accompanying corrective action plan.