Finding Text
Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to §180.300 of 2 CFR Part 180, when you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. This is done by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person.
Condition: Home Forward is not in compliance with requirements related to suspension and
debarment.
Questioned costs: Unable to determine.
Context: During our testing, it was noted that Home Forward did not review one of one vendors subject to the requirement prior to entering into a contract with the vendor to ensure the vendor did not have any active exclusion records.
Cause: Home Forward did not anticipate spending federal funds under the contract.
Effect: Home Forward is not in compliance with federal regulations that require verification to ensure that the business to which they have entered into a covered transaction is not excluded or disqualified, as specified in §180.300.
Repeat Finding: No.
Recommendation: We recommend Home Forward implements a process to ensure exclusion checks are done prior to the execution of a contract. This process should include a system to ensure documentation is maintained in the files evidencing the date of the exclusion check as well as documented review and approval of the results of the exclusion check by program staff.
Views of responsible officials: There is no disagreement with the audit finding.