Finding 523439 (2024-001)

Finding 2024-001 Material noncompliance and material weakness in internal control over compliance with procurement and suspension and debarment procedures meeting the requirements of 2 CFR Part 200. Federal Agency: United States Department Treasury Program Titles: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Entity: King County Regional Homeless Authority Award Numbers: DA-202305-01899 Award Periods: January 1, 2023 through December 31, 2023 Criteria Internal controls requirements contained in Title 2 U.S. Code of Federal Regulations Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (the Uniform Guidance) , Subpart D ‐ Post Federal Award Requirements, Section 200.318 through 200.327, require that a non‐Federal entity use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirement identified in 2 CFR Part 200. Condition/Context The Organization has a procurement policy, which includes procedures to include documenting the history of the procurement, including justification of the procurement method utilized. For 2 of 2 procurements selected for testing over the micro-purchase threshold the Organization could not produce contemporaneous documentation supporting the history of the procurement including justification for utilization of the noncompetitive procurement method of procurement and performance of suspension and debarment search. The Organization determined at the time of procurement that due to a state of public emergency the noncompetitive procurement methodology was in compliance with the Uniform Guidance. Subsequent to procurement the Organization received approval from the pass-through funder that a noncompetitive procurement methodology was authorized. Additionally, the Organization documented the vendor justification and performance of suspension and debarment search subsequent to entering into the procurement, as part of preparation for the annual audit. Cause The Organization did not have internal controls in place to ensure that the Organization’s procurement policy was followed by retaining documentation of the history of the procurement. Effect The Organization entered into agreements to procure goods and services for which no documentation was retained to support the history of the procurement. Questioned Costs $0 Repeat Finding Repeat of finding 2023-002 Recommendation We recommend the Organization implement internal controls to ensure that documentation is retained to support procurements in accordance with its procurement policy. Views of Responsible Individual and Corrective Action Plan Management agrees with the finding and has provided the accompanying corrective action plan.