Audit 326032

2024-002 U.S. Department of Health and Human Services Federal Financial Assistance Listing #93.526 Grants for Capital Development in Health Centers Procurement, Suspension and Debarment Significant Deficiency In Internal Control Over Compliance Criteria – 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition – There was no evidence retained that the Community Health Center reviewed vendors to determine their status in regards to the suspension and debarment requirement. Furthermore, the Community Health Center did not have written suspension and debarment policies. Cause – The Community Health Center did not have an internal control policy in place to ensure a documented review and approval of the vendors for suspension and debarment took place prior to utilizing under the federal funds. Effect – The lack of adequate policies governing review and approval increases the risk that employees participating in the federal awards administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs – None reported. Context/Sampling – A nonstatistical sample of 2 out of 4 vendors were selected for detail testing and did not include evidence of a review for suspension and debarment. The Procurement Policy was reviewed in its entirety. Repeat Finding from Prior Years – No. Recommendation – We recommend the development of a Suspension and Debarment Policy as either a separate policy or part of the Procurement Policy which would require that vendors are investigated to ensure they have not been declared ineligible to receive federal dollars. The policy should include guidance on the need to maintain that documentation. Views of Responsible Officials – Management agrees with the finding.

2024-003 U.S. Department of Health and Human Services Federal Financial Assistance Listing #93.526 Grants for Capital Development in Health Centers Procurement, Suspension and Debarment Significant Deficiency In Internal Control Over Compliance Criteria – Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires contract to contain applicable provisions described in Appendix II to Part 200 for contracts under Federal Awards. The OMB Compliance Supplement states that non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Non-Federal entities may verify that a party is not suspended or debarred by checking the Excluded Parties List System, collecting a certification from the entity, or adding a clause or condition to the covered transaction. Condition – Certain applicable provisions described in Appendix II to Part 200 were not included in the contract as required. Cause – The Community Health Center did not have an internal control policy to ensure contracts under Federal awards contained all of the applicable provisions or to ensure that all procurement procedures were completed and documented. Effect – Contractors may not be aware of additional terms and conditions required to be followed to be in compliance with the procurement standards within the Uniform Guidance. Questioned Costs – None reported. Context/Sampling – A nonstatistical sample of 2 out of 4 vendors were selected for detail testing, including one contract subject to Appendix II to Part 200. The contract was missing certain applicable provisions, which include termination clauses, equal employment opportunity, and anti-lobbying, among others. Repeat Finding from Prior Years – No. Recommendation – We recommend the Community Health Center enhance internal control policies to ensure all contracts under Federal awards contain the applicable provisions in Appendix II to Part 200. Views of Responsible Officials – Management agrees with the finding.

2024-002 U.S. Department of Health and Human Services Federal Financial Assistance Listing #93.526 Grants for Capital Development in Health Centers Procurement, Suspension and Debarment Significant Deficiency In Internal Control Over Compliance Criteria – 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition – There was no evidence retained that the Community Health Center reviewed vendors to determine their status in regards to the suspension and debarment requirement. Furthermore, the Community Health Center did not have written suspension and debarment policies. Cause – The Community Health Center did not have an internal control policy in place to ensure a documented review and approval of the vendors for suspension and debarment took place prior to utilizing under the federal funds. Effect – The lack of adequate policies governing review and approval increases the risk that employees participating in the federal awards administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs – None reported. Context/Sampling – A nonstatistical sample of 2 out of 4 vendors were selected for detail testing and did not include evidence of a review for suspension and debarment. The Procurement Policy was reviewed in its entirety. Repeat Finding from Prior Years – No. Recommendation – We recommend the development of a Suspension and Debarment Policy as either a separate policy or part of the Procurement Policy which would require that vendors are investigated to ensure they have not been declared ineligible to receive federal dollars. The policy should include guidance on the need to maintain that documentation. Views of Responsible Officials – Management agrees with the finding.

2024-003 U.S. Department of Health and Human Services Federal Financial Assistance Listing #93.526 Grants for Capital Development in Health Centers Procurement, Suspension and Debarment Significant Deficiency In Internal Control Over Compliance Criteria – Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires contract to contain applicable provisions described in Appendix II to Part 200 for contracts under Federal Awards. The OMB Compliance Supplement states that non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Non-Federal entities may verify that a party is not suspended or debarred by checking the Excluded Parties List System, collecting a certification from the entity, or adding a clause or condition to the covered transaction. Condition – Certain applicable provisions described in Appendix II to Part 200 were not included in the contract as required. Cause – The Community Health Center did not have an internal control policy to ensure contracts under Federal awards contained all of the applicable provisions or to ensure that all procurement procedures were completed and documented. Effect – Contractors may not be aware of additional terms and conditions required to be followed to be in compliance with the procurement standards within the Uniform Guidance. Questioned Costs – None reported. Context/Sampling – A nonstatistical sample of 2 out of 4 vendors were selected for detail testing, including one contract subject to Appendix II to Part 200. The contract was missing certain applicable provisions, which include termination clauses, equal employment opportunity, and anti-lobbying, among others. Repeat Finding from Prior Years – No. Recommendation – We recommend the Community Health Center enhance internal control policies to ensure all contracts under Federal awards contain the applicable provisions in Appendix II to Part 200. Views of Responsible Officials – Management agrees with the finding.