Finding 537637 (2024-002)

2024-002 –PROCUREMENT AND SUSPENSION AND DEBARMENT Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development CFDA #: 14.850 – Public and Indian Housing CRITERIA Any contract not exceeding $20,000 for construction or public improvements and $25,000 for goods or services may be 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 for construction or public improvements and $25,000 for goods or services no less than three offerors shall be solicited to submit price quotations. (Pittsfield Housing Authority Procurement Policy) CONDITION We examined a sample of 4 vendors used for goods and services during fiscal year 2024 and identified 3 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. 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 $464,450 representing the total payments to 3 vendors. CONTEXT We selected a sample of 4 from a population of 35 vendors paid in excess of the micro-purchase threshold. This was not a statistically valid sample. REPEAT FINDING See finding 2023-004. 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.