Finding Text
Condition: During our audit, we noted multiple disbursements made to vendors who did not have contracts that were properly procured in accordance with the Authority?s policies and HUD rules and regulations. In addition, the procurement files tested only had one quote, which did not follow the Authority?s small purchase procedure. Criteria: The Authority?s procurement policy and HUD rules and regulations require that certain procedures be performed in the procurement of vendors to ensure that fair and open competition results in services of the best possible value to the Authority. Context: As part of our audit of the Authority?s disbursements, it was noted that multiple checks were issued for services relating to costs associated with unit turnover and HCV inspections. The cumulative annual cost of these services were in excess of the Authority?s procurement policy for small purchases. In addition, legal services were paid to a vendor that were in excess of the Authority?s procurement policy with no supporting documentation of proper procurement provided. Cause: The Authority does not have adequate monitoring controls to identify when payments are made to a vendor that has not been properly procured. Effect: The Authority did not comply with their procurement policies or HUD regulations with regard to the disbursements and contracts in question. Questioned Costs: None. Auditor Recommendations: The Authority should follow its procurement policy regarding small purchase procedures and sealed bids to verify they are in compliance with HUD rules and regulations. In addition, we recommend that the Authority reduce the bidding thresholds in their policy to levels that are more reflective of the amounts that are appropriate for a small agency. Management Response: See Corrective Action Plan.