Finding 47165 (2022-003)

2022-003 U.S. Department of Housing and Urban Development Federal Financial Assistance Listing #14.155 Section 223(f) Mortgage Insurance for the Purchase of Refinancing of Existing Multifamily Housing Projects Suspension and Debarment Significant Deficiency in Internal Control over Compliance Criteria: 2 CRF 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. As outlined in 2 CFR 180, recipients must not utilize any vendor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition: Our testing identified the Project transacted more than $25,000 with a vendor but did not retain documentation to support verification that the vendor was not included as an excluded party within the System for Award Management (SAM). Cause: There was a lapse in oversight of the internal control process over suspension and debarment. Effect: The Project could execute a covered transaction with a party that is suspended or debarred or otherwise excluded. Questioned Costs: None Reported Context/Sampling: Sampling was not used. Repeat Finding from Prior Year: No Recommendation: We recommend the Project?s sponsor review its policies and procedures to ensure all vendors are compared to the SAM and documentation is retained before the Project executes a covered transaction. Views of Responsible Officials: Management agrees with the finding and the recommendation.