Finding Text
Finding 2023-004: Federal Procurement Requirements for Policies and Documentation
Information on the Federal Program: CFDA 14.135—U.S. Department of Housing and Urban Development, Section 221(d)(4) Mortgage Insurance Rental Housing for the Elderly, grant number 113-35459.
Criteria: Uniform Guidance §200.318, General Procurement Standards, states that a non-Federal entity must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price.
Condition: Procurement procedures applied for the year ended December 31, 2023 included a control to obtain a minimum of three bids in response to a formal Request for Proposal. These three written competitive bids must be obtained and retained in the procurement files. The Village obtained three competitive bids, per board minutes, but did not retain these bids in the procurement file.
Cause: The internal control process for the Village did not require the retention of proper documentation for this specific requirement in the federal procurement requirements.
Effect or Potential Effect: Not maintaining records sufficient to detail the history of each procurement transaction could lead to noncompliance with HUD regulations and could result in corrective action by HUD.
Questioned Costs: $0. The audit testing identified no vendors who were suspended or debarred.
Context / Sampling: The finding was identified in our test of a non-statistical sample of two vendors requiring suspension and debarment procedures.
Repeat Finding from Prior Year(s): No
Recommendation: The governing body and management of the Village should ensure the Village’s policies for procurement activities are consistent with current federal requirements, and a review of internal controls should be performed to ensure all such requirements are addressed by procurement procedures being performed.
Responsible Official’s Response: Management will modify its internal control practices to ensure procurement activities in response to a formal Request for Proposal are consistent with current federal requirements and specifically with the regard to ensuring that proper documentation and records are maintained in sufficient detail to support the history of each procurement transaction by having three competitive bids and retaining the bids in the procurement file.
Planned Implementation Date of Corrective Action: Management will implement this change immediately.
Person Responsible for Corrective Action: Executive Director in conjunction with the Board of Directors.