Finding Text
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Continuum of Care
Assistance Listing Number: 14.267
Federal Award Identification Number and Year: PA0504L3T002110 - FY24, PA0504L3T002211 - FY24, PA0911L3T002103 - FY24, PA0911L3T002204 - FY24, PA1067L3T002200 - FY24
Award Period: July 1, 2023 through June 30, 2024
Type of Finding:
Material Weakness in Internal Controls over Procurement, Suspension and Debarment
Noncompliance
Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement, suspension, and debarment. The Organization should have internal controls designed to ensure compliance with those provisions. 2 CFR section 200.318(c) and 48 CFR sections 52.203-13 and 52.303-16 requires entities to maintain standards of conduct that cover conflicts of interest and govern the performance of its employees engaged in the selection, award, and administration of
contracts.
Condition: We noted the Organization did not have adequate internal controls designed to ensure all vendors were compliant with the Organization’s conflict of interest policy, procurement, suspension and debarment requirements and the requirements of Uniform Guidance.
Questioned Costs: Known: $74,275
Context: Lack of contracts, agreements and procurement procedures when acquiring vendors for federal grant expenditures. Through our testing of 40 vendors, we identified 4 which did not follow the proper procurement, suspension and debarment practices per federal requirements. Of these 4 vendors, we identified a total of $74,275 of known questioned costs within the program tested, and furthermore $190,515 of likely questioned costs based on the population.
Cause: The Organization had procured vendors without following the required procurement, suspension and debarment procedures.
Effect: The lack of internal controls over these compliance requirements provides an opportunity for noncompliance.
Recommendation: We recommend that management review the procurement, suspension, and debarment requirements for federal programs as well as the organization's policies related to these areas. Management should ensure that such practices are being followed to comply with federal requirements. We also recommend that all current vendors in use are assessed and considered for compliance with procurement, suspension and debarment practices.
Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding. See attached corrective action plan.