Finding Text
Assistance Listing Number, Federal Agency, and Program Name 14.267, U.S. Department of Housing and Urban Development, Continuum of Care Program Federal Award Identification Number and Year M10171L5F061912, 2021; MI10171L5F062013, 2022; MI0616D5F062002, 2021; MI0616D5F062103, 2022 Pass through Entity Not applicable Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Per 2 CFR 180.300, before entering into a covered transaction with another person, grant recipients must verify that the person with whom they intend to do business is not excluded or disqualified. This is done by (a) checking SAM exclusions, (b) collecting a certification from that person, or (c) adding a clause or condition to the covered transaction with that person. Condition Controls in place did not ensure the Organization verified landlords paid were not excluded or disqualified prior to entering into transactions with the landlords. Questioned Costs None Identification of How Questioned Costs Were Computed Not applicable Context The Organization entered into various lease agreements with 16 landlords during the year without verifying whether they were excluded or disqualified prior to entering into the lease. Cause and Effect The Organization did not follow its suspension and debarment policies. While no disqualified or excluded landlords were identified as a result of the audit, lack of controls in place to verify status prior to entering into a covered transaction can result in possible questioned costs. Recommendation We recommend the Organization establish a procedure to utilize one of the three methods outlined for checking for excluded or disqualified persons prior to entering into lease agreements. Further, we recommend a periodic review process be established to ensure the procedure is implemented timely. Views of Responsible Officials and Corrective Action Plan The Organization did not have any new landlords that were used for the new fiscal year to verify. The Project Heal department accepts clients under the HUD Rapid Rehousing grant in which landlords are already put in place with the clients ? the YWCA assumes the rent payment or a portion of, to help survivors with costs. Annual checks will continue to be run on landlords in which the leases are in the name of the YWCA. Landlords will be verified using the public record search on SAM.gov for exclusions or disqualifications prior to entering into a lease agreement. We will also add a clause in the transaction instrument (lease) indicating that we will not do business with disqualified or excluded entities/individuals. We will also periodically (at least annually) review the status of vendors utilizing SAM.gov.