Audit 374273

Federal Program: 93.493 – Congressional Directives, U.S. Department of Health and Human Services, FAIN CE152180 passed through the Health Resources & Services Administration Criteria or Specific Requirement: Procurement, Suspension & Debarment, 2 CFR 200.320 Condition: The Company paid funds to a vendor that qualified under sole source procurement requirements. In the vendor’s contract with the Company, the vendor confirmed it was not suspended or debarred. The Company did not document its process for determining sole source procurement or document its search to confirm the vendor was not suspended or debarred. Cause: The Company does not have policies in place that comply with federal procurement, suspension and debarment requirements. Effect: The Company’s internal controls did not ensure proper documentation that the vendor materially complied with the federal procurement requirements. Questioned Costs: None Context: Federal procurement standards require entities that receive federal awards to have specific policies that comply with 2 CFR Section 200.318-320. The requirements specify that policies must establish thresholds and procedures for micro-purchases, simplified acquisitions, and formal purchases. When vendors are selected, federal funds are prohibited from going to certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in federal awards (2 CFR 200.214). The Company did not have policies in place to ensure compliance with these federal procurement guidelines. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: The Company has policies for vendor qualification in place surrounding critical vendors. We recommend considering all vendors that are awarded contracts to be paid with federal awards critical or otherwise amending the Company’s contracting review process or critical vendor policy to incorporate specific procedures when federal funds are used. These procedures should include a documented search of Sam.gov for suspension and debarment of the vendor. The Company should establish procurement thresholds and specific procedures for those thresholds as outlined in 2 CFR Section 200.318-320. Views of Responsible Officials and Planned Corrective Actions – Management agrees with the finding. See attached corrective action plan.