Procurements

We determined that the city of Houston has adequate policies, procedures, and business practices that comply with Federal procurement regulations and FEMA guidelines to expend FEMA grant funds.  We found Houston may have inappropriately included the $73.8 million cost of Houston First Corporation’s (Houston First) disaster damages in its damage estimate, even though it was not an eligible applicant for them.  We did not examine procurement policies and procedures related to Houston First because the entity was outside the scope of our audit.  During the audit, FEMA acknowledged it would reiterate in writing to the City of Houston the importance of proper oversight for all procurements executed by Houston First.  This report contains no recommendations. 

Except for identified questioned costs, reported DHS Purchase and Travel Card transactions for FY 2017 were appropriate and complied with relevant laws and regulations.  The auditor, CohnReznick LLP, identified 17 control deficiencies within DHS Purchase and Travel Card Programs related to maintenance of purchase documentation, application of required procurement policies, price reasonableness determinations, price quotes/competitive bids, required sourcing, tax exemptions, and split purchases.  The DHS Travel Card Program deficiencies related to maintenance of travel documentation, allowability of transactions per regulations, credit balance refunds, the prudent traveler standard, and improper use of a travel card.  The auditor identified $43,508 in questioned costs for FY 2017 and made 12 recommendations.  When implemented, these recommendations should ensure that Purchase and Travel Card transactions are appropriate and comply with relevant laws and regulations.  The Office of the Chief Financial Officer concurred with six recommendations and non-concurred with six recommendations.