Audit 409249

U.S Department of Health and Human Services Federal Financial Assistance Listing #93.493 Congressional Directives Procurement, Suspension & Debarment Material Weakness in Internal Control Over Compliance and Material Noncompliance 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 the terms and conditions of the federal award. 2 CFR 200.318 maintains that recipients must have and use documented procurement policies and must conform procurement standards to Uniform Guidance standards in sections 2 CFR 200.317 through 200.327. Additionally, 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are applicable. Condition: Testing of the federal program identified the following: 􀁸 The Hospital’s formally documented procurement policy was missing the required elements detailed under Uniform Guidance. 􀁸 Instances where the Hospital did not follow the procurement process, and/or retain documentation for reasoning of selection of vendor. Cause: The Hospital was not aware of the federal procurement requirements and did not have an established policy. Contract provisions were not evaluated compared to Uniform Guidance contract requirements and documentation was not retained to support procurement and selection of vendors. Effect: The Hospital was not in compliance with the procurement standards for their purchases and are not in compliance with the requirement to have a written policy in accordance with Uniform Guidance. Questioned Costs: None reported. Context: A nonstatistical sample of 4 out of 14 vendors were selected for testing. Repeat Finding from Prior Years: No Recommendation: We recommend the Hospital update their procurement policy to ensure it includes all the required elements in accordance with Uniform Guidance. In addition, we suggest that management implement procedures and control processes related to the review of procurement to ensure the procurement methods are being followed and documentation is retained to support compliance. Views of Responsible Officials: Management agrees with the finding.

U.S Department of Health and Human Services Federal Financial Assistance Listing #93.493 Congressional Directives Procurement, Suspension & Debarment Material Weakness 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 the terms and conditions of the federal award. Additionally, 2 CFR 200.214 requires recipients to restrict the subawards and contracts with certain parties that are debarred, suspended, or excluded from ineligible participation in Federal assistance programs or activities. Condition: The Hospital does not have an internal control policy in place to ensure covered transactions are with vendors that are not suspended or debarred, and no evidence was retained regarding ensuring the vendor was not suspended or debarred. Cause: The Hospital does not have an internal control policy or procedures to ensure compliance and was not aware of options available for monitoring to ensure compliance. Effect: The Hospital may enter into a covered transaction with a vendor that is suspended or debarred. Questioned Costs: None reported. Context: A nonstatistical sample of 3 out of 13 covered transactions were selected for testing. Repeat Finding from Prior Years: No Recommendation: We recommend the Hospital update their procurement policy to ensure it includes suspension and debarment requirements. Additionally, we recommend management complete a review to ensure vendors are not suspended or debarred from doing business with the federal government prior to entering into a procurement transaction and retain documentation to support that these procedures are being performed. Views of Responsible Officials: Management agrees with the finding.