Finding Text
Findings and Questioned Costs Related to the Audit of Federal Awards
Finding: 2023‐002
U.S. Department of Housing & Urban Development
Program Name: Public Housing Operating Fund
AL Number: 14.850
Material Weakness, Procurement and Suspension and Debarment
Criteria: In accordance with 2 CFR 200, management should have an adequate system of internal
control procedures in place to ensure that procurement policies are implemented and functioning as
intended. Management must monitor activities under federal awards to assure compliance with
federal requirements.
Condition: The City implemented procurement policies that conforms with applicable federal and
state laws. However, the City’s internal controls over micro-purchases were not functioning as
intended.
Context: During our testing, we examined 9 purchases and determined that 7 purchases in the
micro-purchases threshold did not follow the City’s policy. Expenditures were pre-audited prior to
payment; however purchase orders were not completed as required by the City’s policy.
Effect: Purchases may be made without the proper procurement approvals.
Cause: Due to the turnover in the housing department, there were instances where a proper
purchase order was not created for approval.
Identification of a Repeat Finding: This is a modified, repeat finding from the immediate
previous audit, 2022-003.
Questioned Cost: None. This finding represents an internal control issue; therefore, questioned
costs are not applicable.
Recommendation: The City should have a system in place to ensure that the procurement policies
are implemented and functioning as intended.
Views of Responsible Officials and Planned Corrective Actions: The City agrees with this
finding. Please refer to the Corrective Action Plan section of this report.