Finding 564501 (2023-008)

Significant Deficiency
Requirement
I
Questioned Costs
-
Year
2023
Accepted
2025-06-11

AI Summary

  • Core Issue: NAIHC failed to verify the suspension and debarment status of a vendor before contracting, which is a significant internal control deficiency.
  • Impacted Requirements: Compliance with 2 CFR section 180.995, which mandates verification of vendor eligibility through the SAM Exclusions.
  • Recommended Follow-Up: NAIHC should enhance its policies to ensure proper documentation of vendor verification processes is maintained.

Finding Text

2023-08 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Compass Technical Assistance and Capacity Building Assistance Listing Number: 14.259 Federal Award Identification Number and Year: N-15-IT-TA-0001, Year 2016 Award Period: 03/17/16-09/12/23 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/portal/public/SAM/ (Note: The OMB guidance at 2 CFR part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: For one of the six procured vendors selected for testing, NAIHC did not verify suspension and debarment status of one vendor prior to contracting the vendor. Context: A nonstatistical sample of six out of twenty procured vendors were selected for testing for the Community Compass Technical Assistance and Capacity Building program. The condition noted above was identified during our procedures over the Procurement compliance requirements. Effect: NAIHC contracted with a vendor without verifying suspension and debarment status. Cause: NAIHC did not verify suspension and debarment status. Recommendation: We recommend that NAIHC strengthen its current policies and procedures to ensure that evidence of verifying suspension and debarment status is retained. Management’s View: See Separate Corrective Action Plan.

Corrective Action Plan

Management agrees with the finding and is implementing the accompanying corrective action plan. Views of Responsible Officials: Ryan Edward, Finance and Operations Manager Simone Auger, Director of Operations Contact Person: Simone Auger Director of Operations Corrective Action Plan: Preparation of Requisitions for Routine Goods and Services A. Prior approval of purchases is documented by the Purchase Requisition form. Under normal circumstances, employees are required to prepare a Purchase Requisition for approval before making a purchase commitment. Procedures for doing so are listed below. If obtaining prior approval is not possible, an employee, at his or her discretion, may make a purchase and request reimbursement. However, if the purchase is not approved by their supervisor and the Executive Director, the employee becomes responsible for returning the items purchased or paying for them. If a rejected purchase was made using an NAIHC credit card, the employee will be responsible for reimbursing NAIHC.   B. Purchase Requisitions for routine goods and services will be prepared by the employee and submitted directly to the Finance and Operations Manager for review for completeness, accuracy, budgetary authorization, allowability, and reasonableness. Purchase Requisitions will contain all the following information: • Vendor name and address. • Applicable Requirements for Federally Funded Contracting: • SAM Registration: Prior to entering into an agreement with NAIHC for federally funded work, an organization, consultant or subcontractor must maintain an active account in the System for Award Management (SAM) • Type of Request. Specify whether the request is for goods, services, a blanket purchase order, or are amending an existing purchase order. • Ship-to address. If there is a legitimate reason to have the goods shipped directly to your program’s offices, specify that location here. Otherwise, leave this section blank so that the shipment will be delivered to the NAIHC office. Note that if you choose to be the receiver of the goods, you are responsible for verifying the items received and their condition and forwarding the necessary paperwork to Purchasing. • Will Call. Check this box to see if the purchase order is to be hand-carried to the vendor. • Date required and special instructions (if any). Specify the date that the requested items are needed. Always include this information—it will assist the accounting department in determining priorities. Be sure to provide as much lead time as is practical by determining needs as far in advance as possible. • Provide all the following information where applicable: description of items or services being requested, catalog number, quantity, units, unit cost, and total amount for each item ordered. In instances where the total cost is uncertain, use the best estimate available, preferably in the form of a “not to exceed” amount. • Charge-to Account. Specify the NAIHC line item(s) to be charged. • Signatures of the Requestor and the Supervisor.   • Date requested. This is the date that the requisition was prepared. • Once the Supervisor and the Executive Director have signed the Purchase Requisition, a purchase can be made, and the office administrator will receive any corresponding invoices. • Approved purchases made by credit card will require the credit card holder to include corresponding invoices or receipts in the monthly credit card payment packet. Anticipated Completion Date: January 1, 2024

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

  • 564500 2023-007
    Significant Deficiency
  • 1140942 2023-007
    Significant Deficiency
  • 1140943 2023-008
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.259 Community Compass Technical Assistance and Capacity Building $57,120