Audit 403417

SIGNIFICANT DEFICIENCY 2025-001 PROCUREMENT, SUSPENSION & DEBARMENT Federal Agency: Department of Health and Human Services Federal Program or Cluster: Grants for Capital Development in Health Centers Assistance Listing Number: 93.526 Federal Award Numbers and Years Award Period: 9/15/21-8/31/25 - 4 C8ECS44755-01-07 Questioned Costs $0 Condition: We identified an instance where the Organization did not verify the suspension and debarment status of a vendor prior to awarding the vendor a federal contract. documentation of verification through SAM.gov or equivalent methods could not be provided by management. Subsequent review of SAM.gov indicated no instances of suspended or debarred vendors used on the project funded with federal awards. Criteria: In accordance with 2 CFR 200.214, nonfederal entities are subject to procurement, debarment and suspension regulations. 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. Cause: The Organization did not follow its internal policy for procurement, suspension and debarment. Effect: Failure to verify vendor eligibility increases the risk of awarding federal funds to ineligible parties, which may result in questioned costs and potential disallowance of expenditures by a federal awarding agency. Recommendation: We recommend the Organization ensure the staff involved with procuring contracts using federal awards are aware of the federal requirement, including the already established policies that the Organization has regarding such requirements. Identification of repeat findings: This is not a repeat finding. View of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. The Organization has reviewed and updated the Organization's procurement policy in May 2025 and has trained staff as necessary to ensure staff adhere to the policy prospectively.

NONCOMPLIANCE WITH LAWS AND REGULATIONS 2025-002 PROCUREMENT, SUSPENSION & DEBARMENT Federal Agency: Department of Health and Human Services Federal Program or Cluster: Grants for Capital Development in Health Centers Assistance Listing Number: 93.526 Federal Award Numbers and Years Award Period: 9/15/21-8/31/25 - 4 C8ECS44755-01-07 Questioned Costs $0 Condition: The Organization did not comply with the Davis-Bacon prevailing wage requirement. Criteria: CFR 45 requires all prime construction contracts in excess of $2,000 awarded by non-Federal entities to include a provision for compliance with the Davis- Bacon Act as supplemented by Department of Labor regulations. In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. Contractors must also submit certified payroll records to demonstrate compliance. Cause: The Organization did not follow its internal policy for procurement and suspension and debarment. Effect: The Organization could have paid wages at rates other than those required by law. Recommendation: The Organization executed the contract in question in June 2024, and the related project was completed in April 2025. The Organization's 2024 audit was not issued until May 2025. Consequently, the Organization was not aware of the Davis-Bacon Act applicability during the period of contract execution and project performance and therefore did not have the opportunity to amend the contract to incorporate the Davis-Bacon Act requirements. In response to the findings identified in the prior year audit, the Organization has since implemented new policies and procedures to ensure timely identification of applicable compliance requirements for future contracts. Identification of repeat findings: This finding is a repeat finding previously included as finding number 2024-003. View of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. The Organization has reviewed and updated the Organization's procurement policy in May 2025 and has trained staff as necessary to ensure staff adhere to the policy prospectively.