Audit 50698

Department of Health and Human Services Federal Assistance Listing #93.697 COVID-19 Testing and Mitigation for Rural Health Clinics Activities Allowed or Unallowed and Allowable Costs/Cost Principles Significant Deficiency in Internal Control Over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Medical Center is managing the federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award. Condition: The Medical Center?s listing of expenses claimed under the Testing and Mitigation for Rural Health Clinics program as an allowable cost had more expenses than funds received. Some of these excess funds related to a different period and would have been reported on the Schedule in a different year. This should have been caught with an effective secondary review of expenses. Cause: The Medical Center did not have an internal control process in place to ensure the review and approval of the expenses claimed under the federal program that was detailed enough to catch certain errors. Effect: Without an effective secondary review and approval, the allowable expenses might not be accurately calculated. Questioned Costs: None noted. Context: A nonstatistical sample of 65 ($152,804) from a population of 482 items ($602,846) were tested for activities allowed or unallowed and allowable costs/cost principles. Repeat Finding from Prior Years: No Recommendation: We recommend the Medical Center implement a control process which includes a secondary review and approval of the detail final expenditure listing used to claim the allowable costs under the federal program. Views of Responsible Officials: Management agrees with the finding.

Department of Health and Human Services Federal Assistance Listing #93.697 COVID-19 Testing and Mitigation for Rural Health Clinics Procurement and Suspension and Debarment Material Weakness in Internal Control Over Compliance and Noncompliance Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires that a non-Federal entity must use its own documented procurement procedures which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal law and standards. Condition: Written procurement policies were not updated to conform to applicable standards under Uniform Guidance. In addition, the Medical Center did not obtain quotes from multiple vendors on purchases over the micro purchase threshold. Cause: The Medical Center did not have proper procedures to ensure its written procurement policies were updated to conform to the requirements identified in Uniform Guidance and to ensure quotes were obtained for all purchases over the micro purchase threshold. Effect: Without an effective policy internal control process in place, a vendor purchase over the micro purchase threshold was made without seeking other quotes first. Questioned Costs: None noted. Context: No sampling was performed as the procurement policy was examined in its entirety and all vendor purchases over the micro purchase threshold were tested. Repeat Finding from Prior Years: No Recommendation: We recommend the Medical Center ensure its written procurement policies are updated to conform to the requirements identified in Uniform Guidance. We also recommend the Medical Center implement a control process which includes ensuring quotes are obtained for all purchases over the micro purchase threshold. Views of Responsible Officials: Management agrees with the finding.

Department of Health and Human Services Federal Assistance Listing #93.697 COVID-19 Testing and Mitigation for Rural Health Clinics Activities Allowed or Unallowed and Allowable Costs/Cost Principles Significant Deficiency in Internal Control Over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Medical Center is managing the federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award. Condition: The Medical Center?s listing of expenses claimed under the Testing and Mitigation for Rural Health Clinics program as an allowable cost had more expenses than funds received. Some of these excess funds related to a different period and would have been reported on the Schedule in a different year. This should have been caught with an effective secondary review of expenses. Cause: The Medical Center did not have an internal control process in place to ensure the review and approval of the expenses claimed under the federal program that was detailed enough to catch certain errors. Effect: Without an effective secondary review and approval, the allowable expenses might not be accurately calculated. Questioned Costs: None noted. Context: A nonstatistical sample of 65 ($152,804) from a population of 482 items ($602,846) were tested for activities allowed or unallowed and allowable costs/cost principles. Repeat Finding from Prior Years: No Recommendation: We recommend the Medical Center implement a control process which includes a secondary review and approval of the detail final expenditure listing used to claim the allowable costs under the federal program. Views of Responsible Officials: Management agrees with the finding.

Department of Health and Human Services Federal Assistance Listing #93.697 COVID-19 Testing and Mitigation for Rural Health Clinics Procurement and Suspension and Debarment Material Weakness in Internal Control Over Compliance and Noncompliance Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires that a non-Federal entity must use its own documented procurement procedures which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal law and standards. Condition: Written procurement policies were not updated to conform to applicable standards under Uniform Guidance. In addition, the Medical Center did not obtain quotes from multiple vendors on purchases over the micro purchase threshold. Cause: The Medical Center did not have proper procedures to ensure its written procurement policies were updated to conform to the requirements identified in Uniform Guidance and to ensure quotes were obtained for all purchases over the micro purchase threshold. Effect: Without an effective policy internal control process in place, a vendor purchase over the micro purchase threshold was made without seeking other quotes first. Questioned Costs: None noted. Context: No sampling was performed as the procurement policy was examined in its entirety and all vendor purchases over the micro purchase threshold were tested. Repeat Finding from Prior Years: No Recommendation: We recommend the Medical Center ensure its written procurement policies are updated to conform to the requirements identified in Uniform Guidance. We also recommend the Medical Center implement a control process which includes ensuring quotes are obtained for all purchases over the micro purchase threshold. Views of Responsible Officials: Management agrees with the finding.