Audit 27908

Finding 2022-002: Procurement Suspension and Debarment U.S. Department of Health and Human Services ? Assistance listing No. 93.526, Grants for Capital Development in Health Centers, award number C8ECS44745. Criteria: In accordance with 2 CFR section 200.214, Suspension and Debarment, ?The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities.? Condition: FMCS did not have evidence of verification that vendors are not suspended or debarred from federal and/or state contracts. Cause: FMCS has a procurement policy which indicates ?Certain contracts will not be made to parties listed on the nonprocurement portion of the General Services Administration?s `List of Parties Excluded from Federal Procurement or Nonprocurement Programs? in accordance with Executive Orders 12549 and 12689, `Debarment and Suspension.? (See 45 C.F.R. Part 76). This list contains the names of parties debarred, suspended, or otherwise excluded by agencies, and contractors declared ineligible under statutory authority other than E.O. 12549.? However, there is no evidence this policy was followed during 2022 for vendors/contractors engaged. Effect: FMCS has not documented that it performed required verification. Questioned Costs: Unknown Context: FMCS?s procurement policy specifies contracts will not be awarded to ?parties listed on the nonprocurement portion of the General Services Administration?s `List of Parties Excluded from Federal Procurement or Nonprocurement Programs? in accordance with Executive Orders 12549 and 12689, `Debarment and Suspension??. The request for evidence of verification that vendors were not suspended or disbarred was not provided prior to conclusion of the audit. Repeat Finding: Yes, 2021-001. Recommendation: FMCS should provide training on procurement policy and update policy to include retention of support for compliance with policy.View of responsible officials and planned corrective actions: FMCS concurs with the finding and recommendation of the auditor. The reason this is a repeat finding is because this finding occurred on the 2020 audit, which was completed February 1, 2022. (a three-year period). Our response to the finding was "The procurement policy will be revised to include retention of support for compliance before the March board meeting. Training on our procurement policy will be provided by March 31, 2022". The policy was revised and presented to and approved by the board of directors at the March 16, 2022, meeting. The training occurred for the human resources (HR) staff, who are charged with performing the compliance check, in March. The policy was implemented in March 2022.

Finding 2022-002: Procurement Suspension and Debarment U.S. Department of Health and Human Services ? Assistance listing No. 93.526, Grants for Capital Development in Health Centers, award number C8ECS44745. Criteria: In accordance with 2 CFR section 200.214, Suspension and Debarment, ?The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities.? Condition: FMCS did not have evidence of verification that vendors are not suspended or debarred from federal and/or state contracts. Cause: FMCS has a procurement policy which indicates ?Certain contracts will not be made to parties listed on the nonprocurement portion of the General Services Administration?s `List of Parties Excluded from Federal Procurement or Nonprocurement Programs? in accordance with Executive Orders 12549 and 12689, `Debarment and Suspension.? (See 45 C.F.R. Part 76). This list contains the names of parties debarred, suspended, or otherwise excluded by agencies, and contractors declared ineligible under statutory authority other than E.O. 12549.? However, there is no evidence this policy was followed during 2022 for vendors/contractors engaged. Effect: FMCS has not documented that it performed required verification. Questioned Costs: Unknown Context: FMCS?s procurement policy specifies contracts will not be awarded to ?parties listed on the nonprocurement portion of the General Services Administration?s `List of Parties Excluded from Federal Procurement or Nonprocurement Programs? in accordance with Executive Orders 12549 and 12689, `Debarment and Suspension??. The request for evidence of verification that vendors were not suspended or disbarred was not provided prior to conclusion of the audit. Repeat Finding: Yes, 2021-001. Recommendation: FMCS should provide training on procurement policy and update policy to include retention of support for compliance with policy.View of responsible officials and planned corrective actions: FMCS concurs with the finding and recommendation of the auditor. The reason this is a repeat finding is because this finding occurred on the 2020 audit, which was completed February 1, 2022. (a three-year period). Our response to the finding was "The procurement policy will be revised to include retention of support for compliance before the March board meeting. Training on our procurement policy will be provided by March 31, 2022". The policy was revised and presented to and approved by the board of directors at the March 16, 2022, meeting. The training occurred for the human resources (HR) staff, who are charged with performing the compliance check, in March. The policy was implemented in March 2022.