Finding 2024-002 – Procurement, Suspension, and Debarment
Federal Grantor: Department of Health and Human Services
Assistance Listing No.: Assistance Listing 93.493, Congressional Directives
Federal Award Number: CE1HS52357-01-00
Federal Award Period of Performance: September 30, 2023 – September 2...
Finding 2024-002 – Procurement, Suspension, and Debarment
Federal Grantor: Department of Health and Human Services
Assistance Listing No.: Assistance Listing 93.493, Congressional Directives
Federal Award Number: CE1HS52357-01-00
Federal Award Period of Performance: September 30, 2023 – September 29, 2026
A material weakness was issued related to internal control over suppliers under the UG audit. CFNI recognizes the need to comply with the procurement standards outlined in 2 CFR §§ 200.318-326, which require written policies addressing competition, conflicts of interest, procurement methods (micro-purchases, small purchases, sealed bids, competitive proposals, and noncompetitive procurement), oversight, efforts to engage small and disadvantaged businesses, and procurement of recovered materials, among others. To address this deficiency, CFNI is committed to enhancing its documented procurement policies for procure-to-pay processes involving federal funds.
The audit identified three instances out of 40 sampled where CFNI did not retain documentation verifying that suspension and debarment reviews were conducted during the onboarding of new suppliers. Although CFNI has an established vetting process, it recognizes the need for consistent documentation to evidence compliance. CFNI will implement formalized procedures to ensure all suspension and debarment reviews are documented and retained for audit purposes.
CFNI engages a third-party contractor to monitor its supplier list against suspension and debarment databases. While the vendor provided a SOC 1 report, it did not specifically cover the suspension and debarment services provided. Additionally, CFNI did not conduct testing to validate the accuracy of the third-party's results. CFNI will revise its vendor management practices to ensure the SOC 1 reports cover the relevant services, and it will establish testing procedures to confirm the reliability of the vendor's outputs.
Although CFNI utilizes two processes to monitor active suppliers against suspension and debarment lists—periodic PeopleSoft program checks and an annual review by a third-party vendor—no reconciliation was documented to confirm that the supplier lists provided to and received from the third party were complete and accurate. Additionally, no testing was conducted to validate the third party’s work. CFNI will implement a reconciliation process to verify the completeness and accuracy of supplier lists before and after third-party reviews. Furthermore, it will establish a sampling and testing procedure to validate the results provided by external vendors.
CFNI will develop and implement a robust supplier management policy, incorporating requirements for procurement, suspension, and debarment reviews.
Responsible Official: Pamela Pokropinski, VP Finance
Status of finding: Completion expected June 2025