Finding Text
Procurement Conflict of Interest (Significant Deficiency) and Compliance
Federal Agency: U.S. Department of Homeland Security
Program Title: Emergency Food & Shelter National Board Program (“EFSP”)
Assistance Listing Number: 97.024
Federal Award Source: Pass-through funding
Pass-Through Entity: Pima County
Pass-Through Identifying Number: CT-GMI.23-334
Criteria – Section §200.318, paragraph (c)(1) of the Uniform Guidance states that no employee, officer, agent or board member with a real or apparent conflict of interest may participate in the selection, award, or administration of a contract supported by the Federal award. A conflict of interest includes when the employee, officer, agent or board member, any member of their immediate family, their partner, or an organization that employs or is about to employ any of the parties indicated herein, has a financial or other interest in or a tangible personal benefit from an entity considered or a contract.
Condition – In the prior year, the Organization procured services from a vendor on an emergency basis and did not utilize a formal procurement method for selection. It was later determined that there was also a significant conflict of interest present by a former employee who procured the vendor’s services for reimbursement by the Federal program.
Cause – The finding appears to be the result of an immediate need to obtain services, an oversight to subsequently conduct a formal procurement method of vendor selection on a timely basis, and the omission, misrepresentation and/or possible collusion of certain former employee(s) to appropriately report the conflict of interest within the Organization in accordance with the Organization’s policies.
Effect and Context – By not adhering to a formal procurement method and certain employee(s) not internally reporting the conflict of interest, the Organization may or may not have chosen the best vendor to provide the services at the time and the Organization may or may not have paid more than the market rate for the services received over the term that the Organization’s received the services from the vendor.
Questioned Costs – None noted.
Recommendation – We recommend the Organization provide periodic training to its program staff regarding procurement requirements per the Uniform Guidance, including those covering conflicts of interest, and consider modifying its procurement related internal controls to ensure all staff follow the Organization’s procurement policies.
View of Responsible Officials:
We are in agreement with the finding and are in the process of updating our procedures to mitigate issues in the future. See our Corrective Action Plan for the fiscal year ended June 30, 2024 for additional detail.