Audit 55783

2022?001 Internal Controls and Processes for Procurement and Suspension and Debarment Program Information: Federal Agency Department of Health and Human Services Assistance Listing Number 93.829 ? Section 223 Demonstration Programs to Improve Community Mental Health Services Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Sections 200.318 through 200.326 set forth the procurement and suspension and debarment standards non-federal entities other than states must follow when operating federal programs. Under the terms and conditions of the award, the recipient certifies it will comply with federal procurement and suspension and debarment requirements, which includes maintaining records sufficient to detail the history of procurement. These records must include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. For contracts over $25,000, the recipient must also verify that the vendor is not suspended or debarred. Policies and procedures for these compliance requirements must be documented. Condition During our audit, we noted that the Hospital?s policies and procedures were not in compliance with the Uniform Guidance procurement standards, and the Hospital failed to maintain proper documentation over certain procurement transactions, including its consideration of contractor selection and price and its verification that contractors were not suspended or debarred. Context This finding appears to be a systemic problem. Cause The Hospital did not include the federal procurement and suspension and debarment compliance requirements in its policies and procedures. Effect By not following these federal requirements, the Hospital could be using vendors that may not provide the best services or property and/or may not provide the service or property at the best price, resulting in not getting the greatest value from the federal funds. Recommendation We recommend the Hospital?s management establish policies and procedures that are in compliance with federal standards and implement those policies and procedures immediately. Views of responsible officials and planned corrective actions The Hospital will immediately document and implement procurement policies and procedures in compliance with federal regulations.

2022?001 Internal Controls and Processes for Procurement and Suspension and Debarment Program Information: Federal Agency Department of Health and Human Services Assistance Listing Number 93.829 ? Section 223 Demonstration Programs to Improve Community Mental Health Services Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Sections 200.318 through 200.326 set forth the procurement and suspension and debarment standards non-federal entities other than states must follow when operating federal programs. Under the terms and conditions of the award, the recipient certifies it will comply with federal procurement and suspension and debarment requirements, which includes maintaining records sufficient to detail the history of procurement. These records must include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. For contracts over $25,000, the recipient must also verify that the vendor is not suspended or debarred. Policies and procedures for these compliance requirements must be documented. Condition During our audit, we noted that the Hospital?s policies and procedures were not in compliance with the Uniform Guidance procurement standards, and the Hospital failed to maintain proper documentation over certain procurement transactions, including its consideration of contractor selection and price and its verification that contractors were not suspended or debarred. Context This finding appears to be a systemic problem. Cause The Hospital did not include the federal procurement and suspension and debarment compliance requirements in its policies and procedures. Effect By not following these federal requirements, the Hospital could be using vendors that may not provide the best services or property and/or may not provide the service or property at the best price, resulting in not getting the greatest value from the federal funds. Recommendation We recommend the Hospital?s management establish policies and procedures that are in compliance with federal standards and implement those policies and procedures immediately. Views of responsible officials and planned corrective actions The Hospital will immediately document and implement procurement policies and procedures in compliance with federal regulations.