Heartland Coalition for the Homeless, Inc.

Condition: As allowed by the Compliance Supplement, alternative procedures were used to procure services to be provided under the grant. Deviation from procurement compliance provisions is allowed; however, the alternative procedures must be in writing and documented to safeguard against waste, fraud, and abuse. The Organization did not have written procedures regarding procurement of goods and services. Criteria: 2 CFR 200.317 through 200.325 requires competitive procurement to be used for purchases exceeding $250,000. Deviation is allowable (per the Compliance Supplement) when procuring goods and services to prevent, prepare for, and respond to Coronavirus. Cause: The contract to the Organization was awarded late and the funds needed to be made available to those in need on a timely basis. To eliminate the time to issue a Request for Proposal, evaluate the proposals received, and award the contracts, the Organization contacted agencies capable of providing services and negotiated contracts. Effect: The Executive Director is experienced in providing services to the homeless and preventing homelessness and was knowledgeable of the agencies which could provide the services. Consequently, the agencies had the opportunity to respond to a request for services and negotiate a contract. This procedure was deemed adequate to provide assurance that fraud, waste, and abuse was reduced. Context: Our review included all contracts awarded to subrecipients, which totaled $900.748.00. Recommendation: Required standard procurement procedures should be followed unless alternative procedures are adopted and written by the Organization.

Condition: Payments to subrecipients for services rendered under the grants included salaries and related benefits for the subrecipients’ employees who worked on the grants. Although the payments were adequately supported by time records reporting total hours worked and pay stubs for a pay period, the costs for time and effort allocated to a specific grant was not documented by a cost allocation method using time and effort by grant. Criteria: 2 CFR Subpart E, Cost Principles require that expense be adequately documented. Cause: Guidance was not provided to subrecipients explaining that such documentation should be provided. Effect: Amounts charged for grants for salaries and benefits may not be accurate. However, the charges appeared reasonable and consistent with other services provided for the grants. Context: Our review included four test items, totaling $164,173.51. Recommendation: The Organization should obtain written certifications from subrecipients regarding time and effort charged to a specific grant. Written guidance should be provided to subrecipients regarding this requirement.