We audited the U.S. Department of Housing and Urban Development’s (HUD) procurement of major service contracts by the Office of the Chief Procurement Officer (OCPO) as part of our fiscal year 2016 audit plan and due to a hotline complaint regarding a contract for scanning services. Our audit objective was to determine whether HUD had adequate procedures in place to plan and monitor major service contracts to prevent waste and abuse.
HUD’s OCPO did not always support that Federal acquisition requirements were met when planning and monitoring major service contracts. A review of 10 contracts found violations of HUD procurement policies for specific contracts or agreements, resulting in unreasonable and unnecessary costs of more than $21.3 million, more than $9.6 million in funds to be put to better use, and ineligible costs of $161,718.
We recommend that HUD’s Acting Chief Procurement Officer (1) provide adequate documentation to support that more than $21.3 million in obligated funds was spent for reasonable and necessary costs; (2) strengthen and implement acquisition controls to ensure that proper cost and price documentation is obtained, adequate monitoring is conducted, adequate market research is conducted and that contractors are evaluated to assess their capability to perform the work, and required contract documentation is maintained in the file to ensure that more than $9.6 million that is yet to be used will not be spent for unreasonable and unnecessary costs; and (3) seek reimbursement of $161,718 in ineligible funds disbursed for equipment and support services not specified in a scanning services contract.
Recommendations
Chief Procurement Officer
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Status2017-BO-0001-001-AOpenClosed$21,373,462.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Closed on August 20, 2018Provide adequate documentation to support the $21,373,462 in unreasonable and unnecessary obligated funds.
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Status2017-BO-0001-001-BOpenClosed$23,041,819.00Funds Put to Better Use
Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.
Closed on July 12, 2019Strengthen and implement acquisition controls to ensure that proper cost and price documentation is obtained, adequate monitoring is conducted, adequate market research is conducted and that contractors are evaluated to assess their capability to perform work, and required contract documentation is maintained in the file to ensure that $9,645,864 that is yet to be used will not be spent for unreasonable and unnecessary costs.
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Status2017-BO-0001-001-COpenClosed$179,031.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Closed on January 26, 2018Seek reimbursement for $161,718 in ineligible funds disbursed for equipment and support services not specified in a scanning services contract.