HOGAR SAN ANTONIO, INC.Non-Profit

FINDING NO. 2019-001 PROCUREMENT AND SUSPENSION AND DEBARMENT Federal Program Name Supporting Housing for the Elderly (Section 202) Name of the Federal Agency U.S. Department of Housing and Urban Development (HUD) Pass-through entity N/A Criteria Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under non-procurement transaction (e.g. grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e. subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. 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 Excluded Parties List System (EPLS) maintained by the General Services Administration (GSA), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR 180.300). Condition Hogar San Antonio, Inc. entered into a security services contract with a third party without evaluating and determining if the third party selected is not debarred or suspended. According to the System for Award Management (SAM), this third party has an initial registration date of March 24, 2020, but Hogar San Antonio, Inc. signed the contract with this third party on June 29, 2019. Cause Hogar San Antonio, Inc. has not established formal procedures to verify, before contracting, that the third party is not debarred or suspended. Effect Without proper internal controls, the risk increases that Hogar San Antonio, Inc. enters into contracts with third parties or contractors that were included in the Excluded Parties List System (EPLS) at the System for Award Management (SAM) and thus having the Project to reimburse the federal funds disbursed. Questioned Costs No questioned costs. Context In one out of one contract examined, we noted an instance of non-compliance. The Hogar San Antonio, Inc.?s security services contract must be revised to determine if the Project verified that the contractor was not debarred or suspended before contracting. Identification of a repeat finding No Recommendation We recommend to Hogar San Antonio, Inc. to include, as part of the internal control process, to evaluate and verify, before contracting with a third party or contractor, that the third party or contractor is excluded from the Excluded Parties List System (EPLS) or collect a certification from the third party or contractor or adding a clause or condition to the covered transaction with that third party or contractor according to 2 CFR 180.300. Views from Responsible Officials Procedures has been established to be in compliance with the rules and regulations specified in the 2 CFR section 180.220.

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