Audit 403673

2025-001 Lack of Internal Controls Over Compliance - Suspension and Debarment U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES Congressional Directives—Assistance Listing No. 93.493 Grant Award No. 6 CE1HS53663-01-03 Grant period—For the Year ended December 31, 2025 Significant Deficiency in Internal Control Over Compliance and Noncompliance Criteria: In accordance with 2 CFR 200.212, non-federal entities are prohibited from entering into covered transactions with parties that are suspended, debarred, or otherwise excluded from participating in federal programs. Pursuant to 2 CFR 180.300 and 2 CFR 180.335, the Organization is required to verify the suspension or debarment status of vendors participating in covered transactions by (1) checking the System for Award Management (SAM.gov), (2) obtaining a certification from the vendor, or (3) including a suspension and debarment clause in the applicable contract. The Organization is also required to establish and maintain internal controls to ensure compliance with these federal requirements. Condition: The Organization did not establish or maintain documented internal controls or procedures to verify and document, prior to entering into covered transactions, that vendors were not suspended, debarred, or otherwise excluded from participation in federal programs. Cause: The deficiency resulted from the Organization’s lack of formal procurement policies and procedures designed to address Uniform Guidance compliance requirements, as well as limited experience administering federal awards. Effect: The absence of documented controls over suspension and debarment compliance increases the risk that the Organization could enter into covered transactions with vendors that are suspended, debarred, or otherwise excluded from participating in federal programs. Questioned Costs: None. No instances were identified in which the Organization entered into covered transactions with suspended or debarred parties. Context: During the audit, we tested all covered procurement transactions charged to the federal program during the year. Although the Organization did not perform or document suspension and debarment verification procedures at the time the covered transactions were entered into, subsequent audit procedures determined that none of the vendors associated with the tested transactions were suspended, debarred, or otherwise excluded from participation in federal programs. Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend the Organization establish and implement documented internal control procedures to ensure compliance with federal suspension and debarment requirements. Such procedures should include: (1) performing and documenting verification through SAM.gov prior to entering into covered transactions, (2) obtaining written certifications from vendors, and/or (3) including applicable suspension and debarment provisions in contracts. Documentation supporting compliance should be retained within the procurement files. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and is in the process of implementing corrective actions, including establishing formal procurement procedures and controls to ensure compliance with federal suspension and debarment requirements. Additional details can be found in the Organization’s Corrective Action Plan.