Finding Text
Finding 2023-002 Significant Deficiency: Procurement, Suspension And Debarment – Compliance and Control Finding
ALN 14.537 – Eviction Protection Grant Program
Federal Agency: U.S. Department of Housing and Urban Development
Pass-Through Entities: N/A
Criteria: According to Uniform Guidance, 2 CFR Section 180.300, non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity.
Condition: The Corporation did not maintain documentation to support whether or not a suspension or debarment verification was performed prior to entering into covered transaction with entities.
Cause: The Corporation’s internal control over compliance did not operate effectively related to suspension and debarment.
Effect: The Corporation could have entered into covered transaction with an entity that is suspended or debarred resulting in non-compliance with the compliance requirement.
Questioned Costs: Not applicable.
Context: An exception was noted in the one covered transaction sampled out of the population of three. The vendor tested in the transactions sampled was not suspended or debarred. Statistical sampling was not used to test this compliance requirement.
Identification As A Repeat Finding: Not applicable.
Recommendation: We recommend that the Corporation maintain support that a SAM or other verification is performed prior to entering into contracts or covered transactions.
Views Of Responsible Officials: LSEM will immediately begin time stamping all checks against the System for Awards Management (SAM). LSEM will develop and implement a written policy, within 60 days, that outlines the procedures for verifying suspension and debarment status, including:
• Regular checks against SAM.
• Requirements for obtaining certifications from vendors.
• Inclusion of debarment clauses in contracts.
LSEM will conduct training sessions for procurement staff on the new policy, emphasizing the importance of verifying vendor eligibility and maintaining documentation within 90 days.
LSEM will implement, within 90 days, a regular monitoring process to ensure compliance with suspension and debarment requirements, including:
• Periodic audits of procurement transactions to verify adherence to the policy.
• Review of the documentation repository for completeness and accuracy.