Finding Text
2023-006 – PROCUREMENT
Material Weakness/Material Noncompliance
U.S. Department of Housing and Urban Development
ALN #: 14.850 – Public and Indian Housing
ALN #: 14.872 – Public Housing Capital Fund
CRITERIA
Any contract not exceeding $20,000 made in accordance with the small purchase procedures. Contract requirements shall not be artificially divided so as to constitute a small purchase. For small purchases over $2,000, but not greater than $20,000 no less than three offerors shall be solicited to submit price quotations. (Gloversville Housing Authority Procurement Policy)
CONDITION
We examined a sample of 9 vendors, (5 Public and Indian Housing and 4 Public Housing Capital Fund), used for goods and services during fiscal year 2023 and identified 9 instances where the Authority did not follow their procurement policy or did not retain sufficient supporting documentation.
CAUSE
The Authority’s internal control over procurement was not effective at identifying the need for competitive procurement in instances where frequently recurring transactions resulted in aggregate purchase in excess of competitive procurement thresholds.
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
Estimated questioned costs of $1,050,569 representing the total payments to these 9 vendors.
CONTEXT
We selected a sample of 9 from a population of approximately 43 vendors paid in excess of the micro-purchase threshold. This was not a statistically valid sample.
REPEAT FINDING
See finding 2022-007.
RECOMMENDATION
We recommend that the Authority improve its monitoring of contracts and periodically assess the procurement implications of cumulative payments to frequently used vendors.
AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION
See Corrective Action Plan