HABITAT FOR HUMANITY INTERNATIONAL. INCNon-Profit

Finding # 2019-0001 Program Title: Section 4 Capacity Building for Community Development and Affordable Housing CFDA #: 14.252 Contract Grant Number: Docket Number FR-5900-N-07 Federal Award Years: 12/14/15 to 12/13/19 Federal Agency: U.S. Department of Housing and Urban Development Type of Finding: Noncompliance Procurement Criteria: 2 CFR ?200.320 Methods of procurement to be followed. For acquisitions exceeding the simplified acquisition threshold (or grantee?s procurement policy threshold, if lower), the non-Federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(c); the competitive proposals method under the conditions specified in 2 CFR section 200.320(d); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(f). Condition: The Organization is required to conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. During our testing, we noted that not all vendors were subjected to one of the procurement methods required by 2 CFR section 200.320. Context: The Organization?s procurement policy requires competitive bidding for items over $25,000. All three vendors over the $25,000 threshold were tested. It was noted that one of the three vendors tested did not go through a competitive bidding process as the organization had waived their procurement policy for this item due to not detecting the oversight in a timely manner. The three vendors tested were paid a total of $474,341, of which $219,550 was not subjected to any of the required procurement methods. Procurements account for less than 4% of grant expenditures. Potential questioned costs, if any, would be the difference between the amount paid to the vendor that was not bid and what they would have paid had the item had been subjected to any of the required procurement methods. Cause: The organization?s internal controls over procurement were not operating at a level sufficient to identify noncompliance with procurement policies in a timely manner. Effect: Procurement was made without fair and open competition. Questioned Costs: Unknown Repeat Finding: No Recommendation: We recommend that the Organization strengthen policies and procedures over procurement to ensure that all procurements are subjected to one of the methods prescribed by 2 CFR 200.320 prior to final selection of all vendors. In addition, we recommend that all communications relating to approvals of procurements utilizing federal awards clearly indicate that the item is subject to federal grant requirements.