Audit 12747

2022-001 Micro-Purchasing Documentation Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Health and Human Services Program: 93.104 Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances (SED) (Journey to Independence) Award Number and Year: 6H79SM082970-02M001; 2022 and 5H79SM082970-03; 2023 Pass-Through Agency: Direct Award Criteria: Title 2 U.S. Code of Federal Regulations §§ 200.320(a)(1)(i & ii) state to the maximum extent practicable, the non-Federal entity should distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the non-Federal entity considers the price to be reasonable based on research, experience, purchase history, or other information and documents its files accordingly. Condition: In a sample of eight micro-purchase disbursements tested, none had written documentation supporting why the vendors were selected, and that prices were reasonable. Questioned Costs: None. Context: The majority of costs associated with this federal grant are payroll related. PACT’s policy for non-payroll disbursements requires an approved Expenditure Authorization Form (EAF) as documentation supporting the reason for the purchase. PACT’s policy does not require documentation supporting the reason why the vendor was selected or that the price is reasonable for micro-purchase transactions. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: By not documenting why vendors were selected for micro-purchase transactions, it cannot be determined that purchases were distributed equitably among qualified suppliers or that prices were reasonable. Cause: Client relied on the approval process and allowability of transactions as to why purchases were made. PACT is aware that multiple vendors need to be considered when practicable but was unaware that it needed to be formally documented. Recommendation: We recommend that PACT implement additional procedures to document why a vendor is selected and if the price is reasonable for every micro-purchase transaction. View of Responsible Official: Acknowledge.

2022-001 Micro-Purchasing Documentation Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Health and Human Services Program: 93.104 Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances (SED) (Journey to Independence) Award Number and Year: 6H79SM082970-02M001; 2022 and 5H79SM082970-03; 2023 Pass-Through Agency: Direct Award Criteria: Title 2 U.S. Code of Federal Regulations §§ 200.320(a)(1)(i & ii) state to the maximum extent practicable, the non-Federal entity should distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the non-Federal entity considers the price to be reasonable based on research, experience, purchase history, or other information and documents its files accordingly. Condition: In a sample of eight micro-purchase disbursements tested, none had written documentation supporting why the vendors were selected, and that prices were reasonable. Questioned Costs: None. Context: The majority of costs associated with this federal grant are payroll related. PACT’s policy for non-payroll disbursements requires an approved Expenditure Authorization Form (EAF) as documentation supporting the reason for the purchase. PACT’s policy does not require documentation supporting the reason why the vendor was selected or that the price is reasonable for micro-purchase transactions. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: By not documenting why vendors were selected for micro-purchase transactions, it cannot be determined that purchases were distributed equitably among qualified suppliers or that prices were reasonable. Cause: Client relied on the approval process and allowability of transactions as to why purchases were made. PACT is aware that multiple vendors need to be considered when practicable but was unaware that it needed to be formally documented. Recommendation: We recommend that PACT implement additional procedures to document why a vendor is selected and if the price is reasonable for every micro-purchase transaction. View of Responsible Official: Acknowledge.