Finding 400458 (2023-003)

U.S. Department of Housing and Urban Development Federal Financial Assistance Listing #14.134 Section 207 Insured Loan Balance Procurement, Suspension, and Debarment Material Noncompliance and Material Weakness in Internal Control over Compliance Criteria: The Project must have a written procurement, suspension, and debarment policy. Condition: In our procurement, suspension, and debarment testing, we noted the Project did not have the required policy guidelines in place and did not have proper documentation for the procurement, suspension, and debarment process. Cause: Accounting personnel did not update the policies in place to conform to procurement, suspension, and debarment requirements under the Uniform Guidance. Effect: Lack of a compliance policy could adversely affect the Project’s compliance with Uniform Guidance requirements. Questioned Costs: None noted. Context: All contracts over $10,000 were subject to testing. A total of three purchases were tested for procurement. In addition, one of the three purchases were also subject to suspension and debarment, but there was no documentation that suspension and debarment procedures were performed for this vendor. Repeat Finding from Prior Year: Yes, prior year finding 2022-003. Recommendation: We recommend that the existing policy be updated to include the requirements under Uniform Guidance. Views of Responsible Officials: Management agrees with the finding.