Audit 403489

2021-006 Suspension and DebarmentProgram Information Federal Agency U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers 21H8FCS41567C6, H8C35204, H8D36710, H7CHA37307 Criteria [ ] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 CFR 200.214 and Title 2 CFR 180.300 require that organizations “verify that the person with whom you intend to do business is not excluded or disqualified” before entering into covered transaction (procurement contracts, purchase orders, or agreements greater than or equal to $25,000) with persons or vendors. Condition The Organization did not retain appropriate evidence of verification that vendors and contractors were not excluded from doing business with the federal government. Context This finding appears to be a systemic problem. Out of four covered vendors selected, none had evidence that an exclusion check was performed prior to related expenditures. Cause The Organization did not retain for its records proof that the verification check of vendors and contractors was made, and did not have policies and procedures in place to ensure this was done. Effect The Organization may have entered into covered transactions with persons or vendors who have been suspended or debarred. Questioned Costs None noted. Recommendation We recommend the Organization implement controls requiring that exclusion checks be performed prior to signing any contracts or purchase orders or agreements that are covered transactions. This exclusion checks should be maintained as part of the supporting documentation for the expenditure. View of responsible officials and planned corrective action The Organization acknowledges the material weakness related to the lack of documented verification of vendor suspension and debarment status. While the organization is confident vendors were appropriate screened through SAM.gov - we acknowledge proper supporting documentation was not maintained. Corrective Actions • Policy and Procedure Implementation: The Organization has implemented formal procurement procedures requiring suspension and debarment (SAM) checks prior to entering into any covered transactions exceeding $25,000. • Documentation Requirements: Evidence of exclusion checks is now required to be retained and maintained with the supporting procurement and expenditure documentation. • Process Integration and Oversight: Exclusion verification has been incorporated into the procurement and approval workflow to ensure compliance is performed consistently before contract execution or payment. In alignment with broader control enhancements noted previously, these actions establish a consistent and documented process to ensure compliance with federal requirements and prevent engagement with excluded or disqualified parties going forward.

2021-007 Cash Management Program Information Federal Agency U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers 21H8FCS41567C6, H8C35204, H8D36710, H7CHA37307 Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 CFR 200.403 requires that organizations costs “be adequately documented” before making draws upon federal grants, including the requirement that expenses be individually identifiable. Organizations must also ensure that appropriate review over federal grants is documented. Condition The Organization did not retain appropriately documented support for individually identifiable expenses when making draws on federal grants, and did not maintain appropriate documentation proving review took place. Context This finding appears to be a systemic problem. Of five selections, three did not have appropriate supporting documentation for the related draw, and five did not have appropriate support documenting review taking place. Of the five selections, three were taken in advance of sufficient expenditures being incurred, rather the expenditures were incurred after the draws were made with no procedures to ensure the time is minimized between the draw and the related expenditures. Cause The Organization did not have policies and procedures in place to ensure the keeping of records or procedures sufficient to address the requirements. Effect The Organization may have claimed federal draws in excess of incurred expenses, and if they exist, incorrect expenses may not have been detected. The Organization drew upon federal monies prior to incurring the related expenses. Questioned Costs None noted. Recommendation We recommend the Organization implement controls requiring that individually identifiable expenses be recorded as support for federal grant draws, that all draws have appropriate evidence of review documented, and that draws be made only after related expenditures have been incurred. View of responsible officials and planned corrective action The Organization acknowledges the material weakness related to insufficient documentation supporting federal grant drawdowns. As noted in prior responses, these conditions were influenced by staffing limitations and the absence of formalized procedures. Corrective Actions • Drawdown Support and Timing: Processes have been implemented to ensure all drawdowns are supported by adequately documented, individually identifiable expenditures and are made only after costs have been incurred. • Documentation Standards: Standard requirements are now in place to maintain complete supporting documentation for each draw, including linkage to underlying expenses. • Review and Approval Controls: Formal review procedures have been established, requiring documented evidence of supervisory review and approval prior to submission of draw requests. Management has already demonstrated improved tracking and reconciliation practices to support expenditures prior to drawdowns.