Finding Text
2022-003 ? PROCUREMENT Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN 14.850 ? Public and Indian Housing Program ALN 14.872 ? Public Housing Capital Fund Program CRITERIA For any amounts above the Petty Cash ceiling, but not exceeding $50,000.00, the JCHA may use small purchase procedures. Under small purchase procedures, the JCHA shall obtain a reasonable number of quotes (preferably three); however, for purchases of less than $2,000.00, also known as Micro Purchase, only one quote is required provided the quote is considered reasonable. To the greatest extent feasible, and to promote competition, small purchases should be distributed among qualified sources. Quotes may be obtained orally (either in person or by phone), by fax, in writing, or through e-procurement. Award shall be made to the qualified vendor that provides the best value to the JCHA. If award is to be made for reasons other than lowest price, documentation shall be provided in the contract file. The JCHA shall not break down requirements aggregating more than the small purchase threshold (or the Micro Purchase threshold) into several purchases that are less than the applicable threshold merely to: (1) permit use of the small purchase procedures or (2) avoid any requirements that apply to purchases that exceed the Micro Purchase threshold. (Procurement Policy) CONDITION As a part of our audit, we examined a selection of service providers and vendor transactions for the year ended June 30, 2022. As a result of our procedures, we identified the following deviations from the Authority?s policy: ? One instance in which the Authority did not competitively procure services exceeding $50,000. ? Seven instances in which the Authority did not document an Independent Cost Estimate ? Four instances in which a bid solicitation/advertisement could not be located. ? Two instances in which the Authority did not appear to use the correct procurement methodology. ? Seven instances in which the Authority did not conduct a search to verify that the vendor was not suspended or debarred from federal contracts. CAUSE The Authority does not have a process in place for adhering to and documenting the requirements of its procurement policy and HUD procurement regulations. EFFECT The Authority has not ensured that it is receiving the most competitive prices or rates for services that have been procured, which may have resulted in unnecessary additional costs to the Authority. QUESTIONED COSTS We have identified known questioned costs of those purchases not competitively procured and charged directly to the Public and Indian Housing or Public Housing Capital Fund Programs. Known Questioned Costs ? Public and Indian Housing ? $61,512 CONTEXT All procurements must be made in accordance with the Authority?s procurement policy. We selected a sample of seven procurements representing total expenditures of $1,500,203. This was not a statistically valid sample. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the Authority make the following improvements to internal controls: ? Evaluate the need for open-end contracts and procure these services in accordance with the procurement policy at least annually. ? Implement a procurement checklist for all procurements to ensure all applicable elements of the Authority?s procurement policy are accounted for in each procurement action. ? Provide sufficient procurement training to all employees responsible for procurement. AUDITEE?S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.