Finding 620640 (2022-003)

Material Weakness Repeat Finding
Requirement
I
Questioned Costs
-
Year
2022
Accepted
2023-06-11
Audit: 47914
Organization: Simpson Housing Services, Inc. (MN)
Auditor: Eide Bailly LLP

AI Summary

  • Core Issue: The Organization failed to follow its own procurement procedures, specifically not maintaining documentation for obtaining three bids and not verifying vendor suspension and debarment.
  • Impacted Requirements: Compliance with 2 CFR Part 200 is compromised, risking non-compliance with federal procurement standards.
  • Recommended Follow-Up: Enhance internal controls to ensure adherence to procurement policies and conduct suspension and debarment checks before transactions.

Finding Text

2022-003 Department of Housing and Urban Development Emergency Solutions Grants Program, Federal Financial Assistance Listing 14.231 Procurement, Suspension, and Debarment Material Weakness in Internal Control Over Compliance Grant Award Number: Affects all grant awards included under Federal Financial Assistance Listing 14.231 on the Schedule. Criteria: 2 CFR Part 200 (Uniform Guidance) requires that a non-federal entity must use its own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procedures conform to applicable federal law and standards. Condition: The Organization has documented procurement procedures that conform to applicable federal standards; however, the procedures were not followed regarding maintaining documentation of obtaining three bids for simplified acquisition small purchases and the conclusion as to which item was selected. In addition, the Organization was not testing vendors for suspension and debarment. Cause: The Organization did not have adequate internal controls in place to ensure that the processes laid out in their procurement policy were followed. Effect: The best price for the purchase may not have been obtained and payments could be made to recipients who were suspended or debarred. Questioned Costs: None reported Context/Sampling: A nonstatistical sample of 45 transactions were selected for testing. Required documentation related to procurement was not maintained for multiple items selected which totaled federal expenditures of $3,039. The total dollar amount of the sample was $24,208. Repeat Finding from Prior Year(s): Yes, Finding #2021-004 Recommendation: We recommend the Organization enhance internal control to ensure all transactions under federal awards follow their written procurement policy and suspension and debarment verification procedures are performed prior to entering into the transactions. Views of Responsible Officials: Management agrees with the finding.

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

  • 44198 2022-003
    Material Weakness Repeat
  • 44199 2022-004
    Significant Deficiency Repeat
  • 44200 2022-003
    Material Weakness Repeat
  • 44201 2022-004
    Significant Deficiency Repeat
  • 620641 2022-004
    Significant Deficiency Repeat
  • 620642 2022-003
    Material Weakness Repeat
  • 620643 2022-004
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
14.231 Emergency Solutions Grant Program $455,930
14.267 Continuum of Care Program $55,716
97.024 Emergency Food and Shelter National Board Program $38,500