Finding No. 2021-004 - Equipment and Real Property Management Identification of the federal program: Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Award Number: D19AP00132, D19AP00133, D20AP00115 Criteria or specific requirement (including statutory, regulatory or other citation): In accordance with 2 CFR Section 200.313(d)(1), property records must be maintained that include a description of the property, a serial number or another identification number, the source of funding for the property (including the Federal award identification number), the title holder, the acquisition date, the cost of the property, the percentage of the Federal agency contribution towards the original purchase, the location, use and condition of the property, and any disposition data including the date of disposal and sale price of the property. Additionally, as stated in CHCC Grants Management Policies and Administration Procedures section Procurement and Property Management Standards 13(a), property records must be maintained which include a description of the property, a serial number or other identification number, the source of property, the name of the titleholder, the acquisition date, the cost of the property, the percentage of federal or state participation in the cost of the property, and the disposition data including the date of disposal and sale price. Approval for disposal of property obtained with grant funds must be obtained by Medical Supply Office (MSO) prior to actual disposal. In accordance with 2 CFR 200.303(a), the recipient and subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: 1. CHCC’s current policy and procedures for property records maintenance did not include all the requirement information as prescribed by 2 CFR 200.313(d)(1). 2. CHCC’s fixed assets registry (FAR) did not include all the required information prescribed by 2 CFR 200.313(d)(1). 3. CHCC performed a physical inventory inspection during fiscal year 2021. However, the physical inventory documentation did not contain evidence that the inventory results and related reconciliation were reviewed and approved by authorized personnel. Cause: 1. CHCC did not appropriately design its property records maintenance procedures to ensure compliance with all the requirements of 2 CFR 200.313(d)(1). 2. CHCC lacks monitoring controls to ensure that the information required by 2 CFR 200.313(d)(1) is included in the FAR for all federally funded property. 3. CHCC has not implemented documented review and approval procedures over physical inventory results and the related reconciliation to property records. Effect or potential effect CHCC is in noncompliance with applicable equipment and real property management requirements. Questioned costs: $0; Undetermined. Conditions 1 and 3 relate to ineffective internal controls over compliance resulting in a questioned costs of $0. Condition 2 is not determined. The noncompliance relates to incomplete equipment records that did not contain all information required under the equipment management requirements. While the net book value of the affected equipment is provided in the context section, the auditors were unable to reasonably determine or estimate the portion of Federal expenditures affected by the missing recordkeeping elements. Audit procedures did not identify unsupported, unallowable, or improperly used equipment associated with the items tested. Context: 1. The currently established policy and procedures for property record maintenance lacks the requirement to include the location, use and condition. 2. For four (or 100%) of four federal capital asset additions selected for testing, CHCC’s FAR did not include the assets’ location, use and condition, as required by 2 CFR 200.313.(d)(1). 3. The documentation supporting the inventory count inspection during FY 2021 did not contain evidence of review or approval by the program managers or the procurement director. Identification as a repeat finding, if applicable: Finding No. 2020-004. Recommendation: 1. CHCC should revise their property records management policy to include all information required by 2 CFR 200.313(d)(1) particularly the location, condition and use. 2. CHCC should establish monitoring controls to verify that required property information is complete and accurate, including when assets are acquired, inspected or disposed of. 3. CHCC should establish and document its review and approval procedures over the result of the annual physical inventory inspection, including related reconciliations, to ensure that differences identified are resolved and reconciled to the property records of each program. Views of Responsible Officials: CHCC concurs with the findings. CHCC updated its Capital Assets policy on June 10, 2026, to comply with the requirements of 2 CFR 200.313. Pursuant to the revised policy, CHCC will update the fixed assets listing for all the required components and proper documentation reconciliation results. Identification of the federal program:
Finding No. 2021-005 - Procurement and Suspension and Debarment Identification of the federal program: Federal Agency: U.S. Department of Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Award Number: D20AP00115, D20AP00049 Criteria or specific requirement (including statutory, regulatory or other citation): In accordance with 2 CFR 200.303(a), the recipient and subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with the Federal statutes, regulations, and the terms and conditions of the Federal award. Additionally, in accordance with 2 CFR 180.300, entities that enter into covered transactions must verify that the person with whom they intend to do business is not excluded or disqualified by: (a) Checking SAM.gov Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Lastly, according to 2 CFR 180.200 (b) (1), a procurement transaction is considered a covered transaction if the contract amount is expected to equal or exceed $25,000. Condition: CHCC did not verify whether a person or a vendor is excluded or disqualified pursuant to the requirements of 2 CFR 180.300 prior to entering covered transactions. Cause: CHCC’s current policy or procedure for suspension and debarment monitoring only applies to newly contracted persons or vendors under a covered transaction, thus not pursuant to the requirements or provisions of 2 CFR § 180.300. Effect or potential effect: CHCC is in noncompliance with applicable Suspension and Debarment regulations. Questioned Costs: $304,590 Questioned Costs, continued: Questioned costs of $304,590 represent expenditures incurred under covered transactions entered into during the fiscal year. However, additional documentation provided by CHCC confirmed that the vendors were not actually suspended or debarred during when the procurements were completed. Context: For two (or 100%) of two covered transactions approved during the year, CHCC did not verify whether a person or a vendor is excluded or disqualified pursuant to the requirements of 2 CFR 180.300 prior to entering into a contract. Identification as a repeat finding, if applicable: Finding No. 2020-005. Recommendation: CHCC should revise or update their policies and procedures for monitoring suspension and debarment status of each vendor of covered transactions. These should be reflective of the requirements set by 2 CFR 180.300. Views of Responsible Officials: CHCC concurs with the compliance finding concerning the absence of documented, contemporaneous suspension and debarment verification but respectfully disagrees with the questioned costs of $304,590. Under 2 CFR 200.516(b)(5), the effect of an audit finding should establish a clear and logical link between the identified condition and its actual or potential impact. Although CHCC did not retain evidence that the vendors’ exclusion status was verified before entering into the covered transactions, the historical SAM.gov Exclusions reports confirm that neither vendor was suspended, debarred, or otherwise excluded during the relevant procurement periods. Accordingly, the procedural deficiency did not result in an award to an ineligible vendor. Additionally, 2 CFR 200.516(b)(6) requires questioned costs to be identified and their computation explained. The $304,590 represents the total expenditure under the two covered transactions rather than costs demonstrated to be unallowable, unsupported, unreasonable, or incurred with an excluded vendor. The expenditures were supported, incurred for authorized program purposes, and resulted in goods or services received by CHCC. This finding is substantially the same as the suspension and debarment findings reported in CHCC’s FY2020 Single Audit. The U.S. Department of the Interior, Office of Insular Affairs, subsequently reviewed CHCC’s corrective-action documentation and determined that CHCC had provided sufficient and appropriate evidence to resolve Finding 2020-005, which included questioned costs of $551,917 Auditor Response: In accordance with 2 CFR 200.1(1)(i)(ii), questioned cost means an amount, expended or received from a Federal award, that is the auditor’s judgment: i. Is noncompliant or suspected noncompliant with Federal statutes, regulations or the terms and conditions of the Federal award; ii. At the time of the audit, lacked adequate documentation to support compliance. Additionally, in accordance with 2 CFR 200.1(2), the amount calculated in (1)(ii) is as if the portion of a transaction that lacked adequate documentation were confirmed noncompliant. Lastly, in accordance with 2 CFR 200.1(6), questioned costs are not improper payments until reviewed and confirmed to be improper payments. When audit procedures were performed, no documentation was provided to support that suspension and debarment monitoring procedures were conducted in accordance with 2 CFR 180.300. Accordingly, we retain the questioned costs.
Finding No. 2021-006 - Activities Allowed or Unallowed / Allowable Costs/Cost Principles Identification of the federal program: Federal Agency: Department of Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Award Number: CNMI22023 Criteria or specific requirement (including statutory, regulatory or other citation): In accordance with 2 CFR 200.303(a), the recipient and subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: CHCC performs a year-end reconciliation of the American Rescue Plan Act (ARPA) premium payments to identify overpayments exceeding the allowable limits. However, CHCC has not established review controls over the calculation of ARPA premiums on a per-pay-period basis to verify that amounts charged to the federal award are allowable and within applicable limits prior to payment. Cause: CHCC designed its control to identify overpayments after disbursement through a year-end reconciliation process rather than through a preventive or timely detective review of premium calculations before or during payroll processing. Effect or potential effect: CHCC’s controls to detect noncompliance for allowability are not effective. Questioned Costs: There are no questioned costs since the finding is related to internal controls. Context: CHCC currently detects overpayments of ARPA premium per employee at the end of the fiscal year through reconciliation. There is no established control that verifies allowability upon the calculation of the premiums on a per pay period basis. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: CHCC should establish controls and procedures for ARPA premium calculation that aim to detect allowability on a preventive approach or on a per-pay-period basis calculation to ensure that amounts charged to each employee per period are correct and within the maximum allowable amount. Views of Responsible Officials: CHCC concurs with the findings. Payroll procedures will be revised to review the calculation of any new differential and review of creation and activation of new pay types to ensure that there is no over or underpayment of benefits. Aside from this preventative control, any supplemental payroll for premium payment shall be reviewed by the Comptroller for compliance to the specific regulations before payment processed.
Finding No. 2021-007 - Equipment and Real Property Management Identification of the federal program: Federal Agency: U.S. Department of Health and Human Services AL Program: 93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance Award Number: H79SM062879, H79SM081982, U79SP020710 Criteria or specific requirement (including statutory, regulatory or other citation): In accordance with 2 CFR 200.303(a), the recipient and subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: CHCC performed a physical inventory inspection during fiscal year 2021. However, the physical inventory documentation did not contain evidence that the inventory results and related reconciliation were reviewed and approved by authorized personnel. Cause: CHCC has not implemented documented review and approval procedures over physical inventory results and the related reconciliation to property records. Effect or potential effect: CHCC’s internal controls over the physical inventory count are not effective. Questioned Costs: There is no questioned cost as this is an internal control finding. Context: The documentation supporting the inventory count inspection during FY 2021 did not contain evidence of review or approval by the program managers or the procurement director. Identification as a repeat finding, if applicable: Finding No. 2020-007 Recommendation: CHCC should establish and document its review and approval procedures over the results of the annual physical inventory inspection, including related reconciliations, to ensure that differences identified are resolved and reconciled to the property records of each program. Views of Responsible Officials: CHCC concurs with the findings. CHCC updated its Capital Assets policy on June 10, 2026, to comply with the requirements of 2 CFR 200.313. Pursuant to the revised policy, CHCC will update the fixed assets listing for all the required components and proper documentation reconciliation results.
Finding No. 2021-008 - Special Tests and Provisions - Control, Accountability and Safeguarding of Vaccine Identification of the federal program: Federal Agency: Department of Health and Human Services AL Program: 93.268 Immunization Cooperative Agreement Award Number: 5 NH23IP922587-03, 6 NH23IP922587-03, 6 NH23IP922587-02 Criteria or specific requirement (including statutory, regulatory or other citation): In accordance with 2 CFR 200.303(a), the recipient and subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Vaccine for Children Program (VFC) Policies and Procedures at the State/Local Immunization Program section 5.2.7 states that CHCC is required to conduct monthly reconciliation of the vaccination records which includes the vaccine inventory, patient screening forms, vaccine administered log sheet and the temperature log sheet. Additionally, VFC Policies and Procedures at the State/Local Immunization Program section 4.1 states that visits must be conducted on an annual or as per need basis which evaluates the program’s adherence to VFC program requirements, including appropriate vaccine handling, storage, and ordering procedures. CHCC is required to perform sampling of patient records to verify eligibility screening and the administration of VFC vaccine only to eligible children. Condition: 1. CHCC did not provide all sampled monthly inventory reconciliations. 2. CHCC did not provide all sampled annual site visit reports. Cause: CHCC’s current document maintenance and retention control and procedure is not designed effectively. Effect or potential effect: CHCC is in noncompliance with the applicable Special Tests and Provisions - Control, Accountability and Safeguarding of Vaccine. Questioned Costs: There are no questioned costs as the finding is non-monetary. Context: 1. For ten (or 71%) of fourteen monthly provider inventory reconciliations selected for testing, CHCC did not provide the supporting documentation. 2. For six (or 86%) of seven providers selected for testing, CHCC did not provide the annual site visit reports and the related supporting documentation that evidences that CHCC is monitoring the provider’s proper storage of vaccines and reviewing provider medical records for eligibility screening. Identification as a repeat finding, if applicable: Finding No. 2020-010. Recommendation: CHCC should improve its records management and document retention controls to ensure that documentation is available for oversight and audit purposes. Management may consider implementing centralized electronic storage and system-based retention procedures (such as the database functionality of its new financial management system). Views of Responsible Officials: CHCC concurs with the finding. To address this finding, the Immunization Program conducts the following reconciliation of vaccination records as follows: Vaccination records: daily entries of vaccination records are captured through the patient encounter form for all providers administering vaccinations. Data Entry Assistants and Program Assistants are responsible for entering the vaccinations based on the form. The Immunization Information Systems (IIS) team are responsible for ensuring data quality elements are complete on the form and reflected on the WebIZ system. Patient screening forms: also known as the patient encounter form is the paper-based document in which patient demographics and vaccination data elements are recorded upon visit for all providers. Data Entry Assistant and Program Assistant capture demographic and input vaccines an individual is to receive for the visit. The vaccinator then inputs vaccination data elements (lot number, manufacturer, site, route, etc.) to be inputted into the registry, WebIZ. Temperature log: utilized to document the vaccine storage unit temperature based on the thermometer reading and logged at the start and end of each workday, as well as after hours and weekends/holidays. The VFC Coordinator and Security team logs the temperatures on a daily, routine basis. Vaccine inventory: monitored weekly by the Logistics Technician via spreadsheet and tracked using the registry WebIZ for overall vaccine inventory management. Inventory is reported to CDC by the Program Manager every 14 days. Vaccine wastage from all providers is submitted to the program at the first week of each month for the previous month reporting period. Overall wastage reporting is done monthly to CDC. A summary report of FY2021 vaccine transactions on the CNMI Immunization Registry, WebIZ was submitted via spreadsheet format under, “Vaccine Inventory Reports” Views of Responsible Officials, continued: Additionally, the CHCC has conducted the following steps to strengthen that annual site visits for VFC providers are completed and documented appropriately to evaluate adherence to the VFC program requirements: - Provided training to the staff member assigned/responsible (VFC Coordinator) for conducting site visits - Worked with CDC Subject Matter Experts to ensure that data systems for site visit findings/reporting were accessible to the VFC Coordinator. Training on the system was also provided to the VFC Coordinator. This system is cloud based and accessible to anyone provided access. Therefore, should staff turnover occur, access to prior reports and the system for submitting new site visit reports will continue to be accessible to the organization and to team members who will take on the responsibility. - Ensure that Position Description for the VFC Coordinator clearly specify responsibilities for implementing the VFC Program in accordance with VFC Operations Guide, which outlines the requirements for annual provider compliance site visits, including the sampling of patient records to verify eligibility screening and administration of VFC vaccine only to eligible children. - Entries of vaccine reconciliation documentation such as vaccine inventory (orders, transfers, and wastages) are accessible on the registry, CNMI WebIZ, as well as routine reporting to CDC VtrckS Site visits were suspended per the CDC Project Officer during that time period due to the COVID-19 response. E-mail communication from the CDC Project Officer is attached. The Program continued to continuously monitor VFC Providers were maintaining proper storage of vaccines and reviewing medical records for eligibility screening despite not conducting a formal site visit.
Finding No. 2021-009 - Special Tests and Provisions - Record of Immunization Identification of the federal program: Federal Agency: Department of Health and Human Services AL Program: 93.268 Immunization Cooperative Agreement Award Number: 5 NH23IP922587-03, 6 NH23IP922587-03, 6 NH23IP922587-02 Criteria or specific requirement (including statutory, regulatory or other citation): In accordance with 2 CFR 200.303(a), the recipient and subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Additionally, in accordance with the Vaccine for Children Program (VFC) Policies and Procedures at the State/Local Immunization program section 4.1, visits must be conducted on an annual or as per need basis which evaluates the program’s adherence to VFC program requirements including sampling patient records to verify eligibility screening and the administration of VFC vaccine only to eligible children. Condition: 1. CHCC did not provide all sampled Annual Site Visit Reports. 2. CHCC did not provide all sampled Patient Encounter Forms. Cause: CHCC’s current document maintenance and retention control and procedure are not designed or operating effectively. Effect or potential effect: CHCC is in noncompliance with the applicable Special Tests and Provisions - Record of Immunization. As a result, management and oversight agencies may be unable to verify that providers had properly screened for vaccine eligibility and had administered VFC vaccines only to eligible children. Questioned Costs: There are no questioned costs since the finding is non-monetary. Context: For five (or 71%) of seven providers selected for testing, CHCC did not provide the Annual Site Visit Reports with supporting medical records to verify that the required information of vaccination records was maintained by each service provider. Identification as a repeat finding, if applicable: Finding No. 2020-011. Recommendation: CHCC should improve its records management and document retention controls to ensure that documentation is available for oversight and audit purposes. Management may consider implementing centralized electronic storage and system-based retention procedures (such as the database functionality of its new financial management system). Views of Responsible Officials: CHCC concurs with the finding. Since 2020, the CHCC has conducted the following steps to ensure that annual site visits for VFC providers are completed and documented appropriately to evaluate adherence to the VFC program requirements: - Worked with CDC Subject Matter Experts to ensure that data systems for site visit findings/reporting were accessible to the VFC Coordinator. Training on the system was also provided to the VFC Coordinator. This system is cloud based and accessible to anyone provided access. Therefore, should staff turnover occur, access to prior reports and the system for submitting new site visit reports will continue to be accessible to the organization and to team members who will take on the responsibility. - Ensure that Position Descriptions for the VFC Coordinator clearly specify responsibilities for implementing the VFC Program in accordance with the VFC Operations Guide, which outlines the requirements for annual provider compliance site visits, including the sampling of patient records to verify eligibility screening and administration of VFC vaccine only to eligible children. - Provided training/refresher to the staff member assigned/responsible (VFC Coordinator) for conducting site visits - Timeliness and completeness of site visit entries have been incorporated as part of the program’s activity workplan.
Finding No. 2021-010 - Equipment and Real Property Management Identification of the federal program: Federal Agency: Department of Health and Human Services - Centers for Diseases and Control Prevention (HHS-CDC) AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Award Number: NU50CK000499 Criteria or specific requirement (including statutory, regulatory or other citation): In accordance with 2 CFR Section 200.313(d)(1), property records must be maintained that include a description of the property, a serial number or another identification number, the source of funding for the property (including the Federal award identification number), the title holder, the acquisition date, the cost of the property, the percentage of the Federal agency contribution towards the original purchase, the location, use and condition of the property, and any disposition data including the date of disposal and sale price of the property. Additionally, as stated in CHCC Grants Management Policies and Administration Procedures section Procurement and Property Management Standards 13(a), property records must be maintained which include a description of the property, a serial number or other identification number, the source of property, the name of the titleholder, the acquisition date, the cost of the property, the percentage of federal or state participation in the cost of the property, and the disposition data including the date of disposal and sale price. Approval for disposal of property obtained with grant funds must be obtained by Medical Supplies Office (MSO) prior to actual disposal. In accordance with 2 CFR 200.303(a), the recipient and subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: 1. CHCC’s current policy and procedure for property records maintenance did not include all the requirement information as prescribed by 2 CFR 200.313(d)(1). 2. CHCC’s fixed assets registry (FAR) did not include all the required information prescribed by 2 CFR 200.313(d)(1). 3. CHCC performed a physical inventory inspection during fiscal year 2021. However, the physical inventory documentation did not contain evidence that the inventory results and related reconciliation were reviewed and approved by authorized personnel. Cause: 1. CHCC did not appropriately design its property records maintenance procedures to ensure compliance with all the requirements of 2 CFR 200.313(d)(1). 2. CHCC lacks monitoring controls to ensure that the information required by 2 CFR 200.313(d)(1) is included in the FAR for all federally funded property. 3. CHCC has not implemented documented review and approval procedures over physical inventory results and the related reconciliation to property records. Effect or potential effect: The CNMI is in noncompliance with applicable equipment and real property management requirements. Questioned Costs: $0; Undetermined. Conditions 1 and 3 relate to ineffective internal controls over compliance resulting in questioned costs of $0. Condition 2 is not determined. The noncompliance relates to incomplete equipment records that did not contain all information required under the equipment management requirements. While the net book value of the affected equipment is provided in the context section, the auditors were unable to reasonably determine or estimate the portion of Federal expenditures affected by the missing recordkeeping elements. Audit procedures did not identify unsupported, unallowable, or improperly used equipment associated with the items tested. Context: 1. The currently established policy and procedures for property record maintenance lacks the requirement to include the location, use and condition. 2. For seven (or 100%) of seven federal capital asset additions selected for testing, CHCC’s FAR did not include the assets’ location, use and condition, as required by 2 CFR 200.313.(d)(1). 3. The documentation supporting the inventory count inspection during FY 2021 did not contain evidence of review or approval by the program managers or the procurement director. Identification as a repeat finding, if applicable: Finding No. 2020-012. Recommendation: 1. CHCC should revise their property records management policy to include all information required by 2 CFR 200.313(d)(1) particularly the location, condition and use. 2. CHCC should establish monitoring controls to verify that required property information is complete and accurate, including when assets are acquired, inspected or disposed of. 3. CHCC should establish and document its review and approval procedures over the result of the annual physical inventory inspection, including related reconciliations, to ensure that differences identified are resolved and reconciled to the property records of each program. Views of Responsible Officials: CHCC concurs with the findings. CHCC updated its Capital Assets policy on June 10, 2026, to comply with the requirements of 2 CFR 200.313. Pursuant to the revised policy, CHCC will update the fixed assets listing for all the required components and proper documentation reconciliation results.
Finding No. 2021-011 - Procurement and Suspension and Debarment Identification of the federal program: Federal Agency: Department of Health and Human Services - Centers for Diseases and Control Prevention (HHS-CDC) AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Award Number: NU50CK000499-01 Criteria or specific requirement (including statutory, regulatory or other citation): In accordance with 2 CFR 200.303(a), the recipient and subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with the Federal statutes, regulations, and the terms and conditions of the Federal award. Additionally, in accordance with 2 CFR 180.300, entities that enter into covered transactions must verify that the person with whom they intend to do business is not excluded or disqualified by: (a) Checking SAM.gov Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Lastly, according to 2 CFR 180.200 (b) (1), a procurement transaction is considered a covered transaction if the contract amount is expected to equal or exceed $25,000. Condition: CHCC did not verify whether a person or a vendor is excluded or disqualified pursuant to the requirements of 2 CFR 180.300 prior to entering covered transactions. Cause: CHCC’s current policy or procedure for suspension and debarment monitoring only applies to newly contracted persons or vendors under a covered transaction, thus not pursuant to the requirements or provisions of 2 CFR § 180.300. Effect or potential effect: CHCC is in noncompliance with applicable Suspension and Debarment regulations. Questioned Costs: $352,470 The questioned cost of $352,470 is based on current-year expenditures for all covered transactions entered into during the year. Context: For 10 (or 100%) out of 10 covered transactions approved during the year, CHCC did not verify whether a person or a vendor is excluded or disqualified pursuant to the requirements of 2 CFR 180.300 prior to entering into a contract. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: CHCC should revise or update their policies and procedures for monitoring suspension and debarment status of each vendor of covered transactions. These should be reflective of the requirements set by 2 CFR 180.300. Views of Responsible Officials: CHCC concurs with the compliance finding concerning the absence of documented, contemporaneous suspension and debarment verification but respectfully disagrees with the questioned costs of $352,470. Under 2 CFR 200.516(b)(5), the effect of an audit finding should establish a clear and logical link between the identified condition and its actual or potential impact. Although CHCC did not retain evidence that the vendors’ exclusion status was verified before entering into the covered transactions, the historical SAM.gov Exclusions reports confirm that none of the vendors were suspended, debarred, or otherwise excluded during the relevant procurement periods. Accordingly, the procedural deficiency did not result in an award to an ineligible vendor. Additionally, 2 CFR 200.516(b)(6) requires questioned costs to be identified and their computation explained. The $352,470 represents the total expenditure under the seven covered transactions rather than costs demonstrated to be unallowable, unsupported, unreasonable, or incurred with an excluded vendor. The expenditures were supported, incurred for authorized program purposes, and resulted in goods or services received by CHCC. CHCC Division Grants and Financial Integrity (DGFI), updated our Suspension and Debarment procedure to comply with 2 CFR 180.300. Auditor Response: In accordance with 2 CFR 200.1(1)(i)(ii), questioned cost means an amount, expended or received from a Federal award, that is the auditor’s judgment: i. Is noncompliant or suspected noncompliant with Federal statutes, regulations or the terms and conditions of the Federal award; ii. At the time of the audit, lacked adequate documentation to support compliance. Additionally, in accordance with 2 CFR 200.1(2), the amount calculated in (1)(ii) is as if the portion of a transaction that lacked adequate documentation were confirmed noncompliant. Lastly, in accordance with 2 CFR 200.1(6), questioned costs are not improper payments until reviewed and confirmed to be improper payments. When audit procedures were performed, no documentation was provided to support that suspension and debarment monitoring procedures were conducted in accordance with 2 CFR 180.300. Accordingly, we retain the questioned costs.
Finding No. 2021-012 - Equipment and Real Property Management Identification of the federal program: Federal Agency: Department of Health and Human Services - Centers for Diseases and Control Prevention (HHS-CDC) AL Program: 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response Award Number: NU90TP922109 Criteria or specific requirement (including statutory, regulatory or other citation): In accordance with 2 CFR Section 200.313(d)(1), property records must be maintained that include a description of the property, a serial number or another identification number, the source of funding for the property (including the Federal award identification number), the title holder, the acquisition date, the cost of the property, the percentage of the Federal agency contribution towards the original purchase, the location, use and condition of the property, and any disposition data including the date of disposal and sale price of the property. Additionally, as stated in CHCC Grants Management Policies and Administration Procedures section Procurement and Property Management Standards 13(a), property records must be maintained which include a description of the property, a serial number or other identification number, the source of property, the name of the titleholder, the acquisition date, the cost of the property, the percentage of federal or state participation in the cost of the property, and the disposition data including the date of disposal and sale price. Approval for disposal of property obtained with grant funds must be obtained by Medical Supplies Office (MSO) prior to actual disposal. In accordance with 2 CFR 200.303(a), the recipient and subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: 1. CHCC’s current policy and procedure for property records maintenance did not include all the requirement information as prescribed by 2 CFR 200.313(d)(1). 2. CHCC’s fixed assets registry (FAR) did not include all the required information prescribed by 2 CFR 200.313(d)(1). 3. CHCC performed a physical inventory inspection during fiscal year 2021. However, the physical inventory documentation did not contain evidence that the inventory results and related reconciliation were reviewed and approved by authorized personnel. Cause: 1. CHCC did not appropriately design its property records maintenance procedures to ensure compliance with all the requirements of 2 CFR 200.313(d)(1). 2. CHCC lacks monitoring controls to ensure that the information required by 2 CFR 200.313(d)(1) is included in the FAR for all federally funded property. 3. CHCC has not implemented documented review and approval procedures over physical inventory results and the related reconciliation to property records. Effect or potential effect: The CNMI is in noncompliance with applicable equipment and real property management requirements. Questioned Costs: $0; Undetermined. Conditions 1 and 3 relate to ineffective internal controls over compliance resulting to a questioned costs of $0. Condition 2 is not determined. The noncompliance relates to incomplete equipment records that did not contain all information required under the equipment management requirements. While the net book value of the affected equipment is provided in the context section, the auditors were unable to reasonably determine or estimate the portion of Federal expenditures affected by the missing recordkeeping elements. Audit procedures did not identify unsupported, unallowable, or improperly used equipment associated with the items tested. Context: 1. The currently established policy and procedures for property record maintenance lack the requirement to include the location, use and condition. 2. For five (or 100%) of five federal capital asset additions selected for testing, CHCC’s FAR did not include the assets’ location, use and condition, as required by 2 CFR 200.313.(d)(1). 3. The documentation supporting the inventory count inspection during FY 2021 did not contain evidence of review or approval by the program managers or the procurement director. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: 1. CHCC should revise their property records management policy to include all information required by 2 CFR 200.313(d)(1) particularly the location, condition and use. 2. CHCC should establish monitoring controls to verify that required property information is complete and accurate, including when assets are acquired, inspected or disposed of. 3. CHCC should establish and document its review and approval procedures over the result of the annual physical inventory inspection, including related reconciliations, to ensure that differences identified are resolved and reconciled to the property records of each program. Views of Responsible Officials: CHCC concurs with the findings. CHCC updated its Capital Assets policy on June 10, 2026, to comply with the requirements of 2 CFR 200.313. Pursuant to the revised policy, CHCC will update the fixed assets listing for all the required components and proper documentation reconciliation results.
Finding No. 2021-013 - Procurement and Suspension and Debarment Identification of the federal program: Federal Agency: Department of Health and Human Services - Centers for Diseases and Control Prevention (HHS-CDC) AL Program: 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response Award Number: NU90TP922109 Criteria or specific requirement (including statutory, regulatory or other citation): In accordance with 2 CFR 200.303(a), the recipient and subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with the Federal statutes, regulations, and the terms and conditions of the Federal award. Additionally, in accordance with 2 CFR 180.300, entities that enter into covered transactions must verify that the person with whom they intend to do business is not excluded or disqualified by: (a) Checking SAM.gov Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Lastly, according to 2 CFR 180.200 (b) (1), a procurement transaction is considered a covered transaction if the contract amount is expected to equal or exceed $25,000. Condition: CHCC did not verify whether a person or a vendor is excluded or disqualified pursuant to the requirements of 2 CFR 180.300 prior to entering covered transactions. Cause: CHCC’s current policy or procedure for suspension and debarment monitoring only applies to newly contracted persons or vendors under a covered transaction, thus not pursuant to the requirements or provisions of 2 CFR § 180.300. Effect or potential effect: CHCC is in noncompliance with applicable Suspension and Debarment regulations. Questioned Costs:- $79,194 The questioned cost of $79,194 relates to expenditures incurred on all covered transactions entered into during the year. However, based on the additional information provided by CHCC, it was ascertained that the vendors did not have suspended or debarred status during the time the procurement procedures were completed. Context: For one (or 100%) out of one covered transaction approved during the year, CHCC did not verify whether a person or a vendor is excluded or disqualified pursuant to the requirements of 2 CFR 180.300 prior to entering into a contract. Grant Award No. PO/Contract Number PO/Contract Amount FY2021 Expenditures and Questioned Cost NU90TP922109 703018 $79,194 $79,194 Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: CHCC should revise or update their policies and procedures for monitoring suspension and debarment status of each vendor of covered transactions. These should be reflective of the requirements set by 2 CFR 180.300. Views of Responsible Officials: CHCC concurs with the compliance finding concerning the absence of documented, contemporaneous suspension and debarment verification but respectfully disagrees with the questioned costs of $79,194. Under 2 CFR 200.516(b)(5), the effect of an audit finding should establish a clear and logical link between the identified condition and its actual or potential impact. Although CHCC did not retain evidence that the vendors’ exclusion status was verified before entering into the covered transactions, the historical SAM.gov Exclusions reports confirm that this vendor was not suspended, debarred, or otherwise excluded during the relevant procurement periods. Accordingly, the procedural deficiency did not result in an award to an ineligible vendor. Views of Responsible Officials, continued: Additionally, 2 CFR 200.516(b)(6) requires questioned costs to be identified and their computation explained. The $79,194 represents the total expenditure under the seven covered transactions rather than costs demonstrated to be unallowable, unsupported, unreasonable, or incurred with an excluded vendor. The expenditures were supported, incurred for authorized program purposes, and resulted in goods or services received by CHCC. CHCC Division Grants and Financial Integrity (DGFI), updated our Suspension and Debarment procedure to comply with 2 CFR 180.300. Auditor Response: In accordance with 2 CFR 200.1(1)(i)(ii), questioned cost means an amount, expended or received from a Federal award, that is the auditor’s judgment: i. Is noncompliant or suspected noncompliant with Federal statutes, regulations or the terms and conditions of the Federal award; ii. At the time of the audit, lacked adequate documentation to support compliance. Additionally, in accordance with 2 CFR 200.1(2), the amount calculated in (1)(ii) is as if the portion of a transaction that lacked adequate documentation were confirmed noncompliant. Lastly, in accordance with 2 CFR 200.1(6), questioned costs are not improper payments until reviewed and confirmed to be improper payments. When audit procedures were performed, no documentation was provided to support that suspension and debarment monitoring procedures were conducted in accordance with 2 CFR 180.300. Accordingly, we retain the questioned costs.
Finding No. 2021-014 - Reporting Identification of the federal program: Federal Agency: Department of Health and Human Services - Centers for Diseases and Control Prevention (HHS-CDC) AL Program: 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response Award Number: NU50CK000499 Criteria or specific requirement (including statutory, regulatory or other citation): In accordance with 2 CFR 200.303(a), the recipient and subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Additionally, in accordance with the grant agreements, the recipient is required to submit an annual SF-425 report. Condition: CHCC was unable to provide a copy of the FY2021 SF-425 report or evidence of its review, certification and submission. Cause: CHCC did not maintain a documented retention process for SF-425 reports and related supporting documentation submitted through the RedCAP reporting system. Effect or potential effect: CHCC is in noncompliance with applicable reporting requirements. Questioned Costs: There are no questioned cost as this finding is related to the reporting compliance requirement. For one (or 100%) of one SF-425 report required to be submitted in FY 2021, CHCC did not provide a copy of the report. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: CHCC should establish and implement policies and procedures for the retention of grant reporting documentation, including copies of all reports submitted to grantors and evidence of management review and certification. In addition, CHCC should maintain backup copies of submitted reports and supporting records to ensure that documentation remains accessible throughout the applicable record retention period. Views of Responsible Officials: CHCC agrees with the findings and will establish a stringent records retention policy, even for reports that were electronically completed and submitted using Grantor portals. These fiscal reports were done on the RedCap before 2023 and were readily accessible, hence ELC Program Staff did not maintain separate offline copies of the reports. When ELC transitioned to ELC CAMP, we lost access to the submitted and saved reports. Hence, we cannot provide supporting documents to our assertion that all reports have been submitted.