Finding 2023-001 Identification of the federal program: Federal Agency: Department of Defense and Department of Health and Human Services Assistance Listing No., Award Name, Award Number and Pass-Through Agency: Assistance Listing Award Name Award Number Pass-Through Agency 93.865 Child Health and Human Development Extramural Research 5R00HD096115-05 93.242 Mental Health Research Grants 1R01MH130437-01A1 93.846 Arthritis, Musculoskeletal and Skin Diseases Research 5R01AR078395-02 93.837 Cardiovascular Diseases Research 5R01HL157491-02 93.393 Cancer Cause and Prevention Research 1R01CA272872-01 93.353 21st Century Cures Act - Beau Biden Cancer Moonshot 1U01CA232488-01 93.242 Mental Health Research Grants 1P50MH127476-01A1 93.855 Allergy and Infectious Diseases Research 5R01AI139511-05 93.838 Lung Diseases Research 5R01HL155095-03 93.855 Allergy and Infectious Diseases Research 5R01AI146581-02 93.396 Cancer Biology Research 5R01CA260178-02 93.RD MP2PRT - Cosgrove 21X121F Q2 Leidos Biomedical Research Inc 93.121 Oral Diseases and Disorders Research 5R01DE028296-05 93.865 Child Health and Human Development Extramural Research 5R01HD095976-04 93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research 109938-19114 University of Illinois Champaign 93.396 Cancer Biology Research 5R01CA247941-03 93.846 Arthritis, Musculoskeletal and Skin Diseases Research 5R01AR073908-04 93.273 Alcohol Research Programs 5R01AA027502-04 93.838 Lung Diseases Research 5R01HL155095-03 93.394 Cancer Detection and Diagnosis Research 5U24CA196173-08 93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders 1R01NS129784-01 93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders 1R01NS129784-01 93.855 Allergy and Infectious Diseases Research 5R01AI155501-03 93.859 Biomedical Research and Research Training 5R35GM131875-05 93.855 Allergy and Infectious Diseases Research 5R01AI155501-03 93.353 21st Century Cures Act - Beau Biden Cancer Moonshot 1U01CA232488-01 12.420 Military Medical Research and Development W81XWH2210597 93.846 Arthritis, Musculoskeletal and Skin Diseases Research 5R01AR073908-04 93.121 Oral Diseases and Disorders Research 5R01DE028296-05 93.396 Cancer Biology Research 1R01CA260178-01A1 93.121 Oral Diseases and Disorders Research 5R01DE028296-05 93.393 Cancer Cause and Prevention Research 1R01CA272872-01 93.121 Oral Diseases and Disorders Research ULRF_21-0285-01 University of Louisville Research Foundation, Inc. 93.353 21st Century Cures Act - Beau Biden Cancer Moonshot 1U01CA232488-01 93.RD CCG-BCR HHSN261201700015I 75N91022F000 93.855 Allergy and Infectious Diseases Research 5R21AI156406-02 93.865 Child Health and Human Development Extramural Research 5R01HD100420-03 93.394 Cancer Detection and Diagnosis Research 5U24CA254445-03 93.855 Allergy and Infectious Diseases Research 5R01AI139519-05 93.394 Cancer Detection and Diagnosis Research BSB06-RAMIREZ NRG Oncology Criteria or specific requirement (including statutory, regulatory or other citation): Section 200.303 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states the following regarding internal control: “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ‘Standards for Internal Control in the Federal Government’ issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Section 200.214 Suspension and Debarment “Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities.” Condition: Nationwide Children’s Hospital (the Corporation) uses a third-party to perform its suspension and debarment checks on a monthly basis. However, we noted the following matters: • The Corporation did not retain the monthly supporting documentation related to the monthly suspension and debarment check. The suspension and debarment checks performed at year-end were retained. • The Corporation does not have a process to reconcile the vendor list provided to the third-party vendor with the results received from the third-party vendor after the suspension and debarment checks are performed to ensure the listing is complete. • The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. The Corporation relied on the results of the suspension and debarment checks performed by the third-party vendor without implementing an internal process to ensure the results provided by the third-party vendor were accurate. In addition, the Corporation performs a suspension and debarment check of all new vendors prior to activating them in the procurement system. The Corporation did not consistently maintain supporting documentation to support the vendor was checked for suspension and debarment before the-“new”-vendor was set up in the procurement system. Cause: The Corporation does not have internal controls in place to require supporting documentation be maintained over the monthly suspension and debarment checks including documentation of management’s review and approval. The Corporation does not have internal controls in place to review the accuracy of third-party reports and to require a reconciliation between the vendor list sent to the third-party vendor and the results provided by the third-party vendor. The Corporation does not have internal controls in place to require supporting documentation be maintained over the suspension and debarment check performed on new vendors. Effect or potential effect: The Corporation’s vendors may not be screened for suspension and debarment, or the suspension and debarment results may not be accurate. A vendor may be set up in the procurement system that is suspended or debarred. Questioned costs: None Context: We tested a sample of 40 new vendors set up in the procurement system in 2023 and noted three instances where management did not retain the supporting documents of its review of suspension and debarment for the new vendor set up. The federal portion of procurement expenditures subject to suspension and debarment was $12,965,319 which represents approximately 12.5% of the R&D Cluster federal expenditures. The total amount reported on the schedule of expenditures of federal awards (Schedule) for the R&D cluster is $103,660,603. Identification as a repeat finding, if applicable: This is a repeat finding; see 2022-001. Recommendation: The Corporation should implement the following internal controls: • The monthly suspension and debarment review process • Reconciliation of the number of vendor files sent to the third-party vendor with the number of files received from the third-party vendor with the suspension and debarment results and review of the accuracy of the suspension and debarment results performed by the third-party vendor • Maintenance of the supporting documentation over the suspension and debarment checks performed on new vendors Views of responsible officials: Management agrees with the recommendation. In September 2023, E&Y rendered the same finding and recommendation for the 2022 calendar year audit. The finding has been partially remediated. Management implemented the following remediations between Q4 2023 and Q1 2024: • Retained the monthly supporting documentation related to a monthly suspension and debarment check • Reconciled the vendor list provided to the third-party vendor with the results received from the third-party vendor after the suspension and debarment checks are performed • Verified the accuracy of the results produced by the third-party vendor • Consistently maintained supporting documentation to support the vendor was checked for suspension and debarment before the “new”-vendor is set up in the procurement system. Views of responsible officials: Management agrees with the recommendation. In September 2023, E&Y rendered the same finding and recommendation for the 2022 calendar year audit. The finding has been partially remediated. Management implemented the following remediations between Q4 2023 and Q1 2024: • Retained the monthly supporting documentation related to a monthly suspension and debarment check • Reconciled the vendor list provided to the third-party vendor with the results received from the third-party vendor after the suspension and debarment checks are performed • Verified the accuracy of the results produced by the third-party vendor • Consistently maintained supporting documentation to support the vendor was checked for suspension and debarment before the “new”-vendor is set up in the procurement system.
Finding 2023-001 Identification of the federal program: Federal Agency: Department of Defense and Department of Health and Human Services Assistance Listing No., Award Name, Award Number and Pass-Through Agency: Assistance Listing Award Name Award Number Pass-Through Agency 93.865 Child Health and Human Development Extramural Research 5R00HD096115-05 93.242 Mental Health Research Grants 1R01MH130437-01A1 93.846 Arthritis, Musculoskeletal and Skin Diseases Research 5R01AR078395-02 93.837 Cardiovascular Diseases Research 5R01HL157491-02 93.393 Cancer Cause and Prevention Research 1R01CA272872-01 93.353 21st Century Cures Act - Beau Biden Cancer Moonshot 1U01CA232488-01 93.242 Mental Health Research Grants 1P50MH127476-01A1 93.855 Allergy and Infectious Diseases Research 5R01AI139511-05 93.838 Lung Diseases Research 5R01HL155095-03 93.855 Allergy and Infectious Diseases Research 5R01AI146581-02 93.396 Cancer Biology Research 5R01CA260178-02 93.RD MP2PRT - Cosgrove 21X121F Q2 Leidos Biomedical Research Inc 93.121 Oral Diseases and Disorders Research 5R01DE028296-05 93.865 Child Health and Human Development Extramural Research 5R01HD095976-04 93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research 109938-19114 University of Illinois Champaign 93.396 Cancer Biology Research 5R01CA247941-03 93.846 Arthritis, Musculoskeletal and Skin Diseases Research 5R01AR073908-04 93.273 Alcohol Research Programs 5R01AA027502-04 93.838 Lung Diseases Research 5R01HL155095-03 93.394 Cancer Detection and Diagnosis Research 5U24CA196173-08 93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders 1R01NS129784-01 93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders 1R01NS129784-01 93.855 Allergy and Infectious Diseases Research 5R01AI155501-03 93.859 Biomedical Research and Research Training 5R35GM131875-05 93.855 Allergy and Infectious Diseases Research 5R01AI155501-03 93.353 21st Century Cures Act - Beau Biden Cancer Moonshot 1U01CA232488-01 12.420 Military Medical Research and Development W81XWH2210597 93.846 Arthritis, Musculoskeletal and Skin Diseases Research 5R01AR073908-04 93.121 Oral Diseases and Disorders Research 5R01DE028296-05 93.396 Cancer Biology Research 1R01CA260178-01A1 93.121 Oral Diseases and Disorders Research 5R01DE028296-05 93.393 Cancer Cause and Prevention Research 1R01CA272872-01 93.121 Oral Diseases and Disorders Research ULRF_21-0285-01 University of Louisville Research Foundation, Inc. 93.353 21st Century Cures Act - Beau Biden Cancer Moonshot 1U01CA232488-01 93.RD CCG-BCR HHSN261201700015I 75N91022F000 93.855 Allergy and Infectious Diseases Research 5R21AI156406-02 93.865 Child Health and Human Development Extramural Research 5R01HD100420-03 93.394 Cancer Detection and Diagnosis Research 5U24CA254445-03 93.855 Allergy and Infectious Diseases Research 5R01AI139519-05 93.394 Cancer Detection and Diagnosis Research BSB06-RAMIREZ NRG Oncology Criteria or specific requirement (including statutory, regulatory or other citation): Section 200.303 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states the following regarding internal control: “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ‘Standards for Internal Control in the Federal Government’ issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Section 200.214 Suspension and Debarment “Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities.” Condition: Nationwide Children’s Hospital (the Corporation) uses a third-party to perform its suspension and debarment checks on a monthly basis. However, we noted the following matters: • The Corporation did not retain the monthly supporting documentation related to the monthly suspension and debarment check. The suspension and debarment checks performed at year-end were retained. • The Corporation does not have a process to reconcile the vendor list provided to the third-party vendor with the results received from the third-party vendor after the suspension and debarment checks are performed to ensure the listing is complete. • The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. The Corporation relied on the results of the suspension and debarment checks performed by the third-party vendor without implementing an internal process to ensure the results provided by the third-party vendor were accurate. In addition, the Corporation performs a suspension and debarment check of all new vendors prior to activating them in the procurement system. The Corporation did not consistently maintain supporting documentation to support the vendor was checked for suspension and debarment before the-“new”-vendor was set up in the procurement system. Cause: The Corporation does not have internal controls in place to require supporting documentation be maintained over the monthly suspension and debarment checks including documentation of management’s review and approval. The Corporation does not have internal controls in place to review the accuracy of third-party reports and to require a reconciliation between the vendor list sent to the third-party vendor and the results provided by the third-party vendor. The Corporation does not have internal controls in place to require supporting documentation be maintained over the suspension and debarment check performed on new vendors. Effect or potential effect: The Corporation’s vendors may not be screened for suspension and debarment, or the suspension and debarment results may not be accurate. A vendor may be set up in the procurement system that is suspended or debarred. Questioned costs: None Context: We tested a sample of 40 new vendors set up in the procurement system in 2023 and noted three instances where management did not retain the supporting documents of its review of suspension and debarment for the new vendor set up. The federal portion of procurement expenditures subject to suspension and debarment was $12,965,319 which represents approximately 12.5% of the R&D Cluster federal expenditures. The total amount reported on the schedule of expenditures of federal awards (Schedule) for the R&D cluster is $103,660,603. Identification as a repeat finding, if applicable: This is a repeat finding; see 2022-001. Recommendation: The Corporation should implement the following internal controls: • The monthly suspension and debarment review process • Reconciliation of the number of vendor files sent to the third-party vendor with the number of files received from the third-party vendor with the suspension and debarment results and review of the accuracy of the suspension and debarment results performed by the third-party vendor • Maintenance of the supporting documentation over the suspension and debarment checks performed on new vendors Views of responsible officials: Management agrees with the recommendation. In September 2023, E&Y rendered the same finding and recommendation for the 2022 calendar year audit. The finding has been partially remediated. Management implemented the following remediations between Q4 2023 and Q1 2024: • Retained the monthly supporting documentation related to a monthly suspension and debarment check • Reconciled the vendor list provided to the third-party vendor with the results received from the third-party vendor after the suspension and debarment checks are performed • Verified the accuracy of the results produced by the third-party vendor • Consistently maintained supporting documentation to support the vendor was checked for suspension and debarment before the “new”-vendor is set up in the procurement system. Views of responsible officials: Management agrees with the recommendation. In September 2023, E&Y rendered the same finding and recommendation for the 2022 calendar year audit. The finding has been partially remediated. Management implemented the following remediations between Q4 2023 and Q1 2024: • Retained the monthly supporting documentation related to a monthly suspension and debarment check • Reconciled the vendor list provided to the third-party vendor with the results received from the third-party vendor after the suspension and debarment checks are performed • Verified the accuracy of the results produced by the third-party vendor • Consistently maintained supporting documentation to support the vendor was checked for suspension and debarment before the “new”-vendor is set up in the procurement system.
Finding 2023-001 Identification of the federal program: Federal Agency: Department of Defense and Department of Health and Human Services Assistance Listing No., Award Name, Award Number and Pass-Through Agency: Assistance Listing Award Name Award Number Pass-Through Agency 93.865 Child Health and Human Development Extramural Research 5R00HD096115-05 93.242 Mental Health Research Grants 1R01MH130437-01A1 93.846 Arthritis, Musculoskeletal and Skin Diseases Research 5R01AR078395-02 93.837 Cardiovascular Diseases Research 5R01HL157491-02 93.393 Cancer Cause and Prevention Research 1R01CA272872-01 93.353 21st Century Cures Act - Beau Biden Cancer Moonshot 1U01CA232488-01 93.242 Mental Health Research Grants 1P50MH127476-01A1 93.855 Allergy and Infectious Diseases Research 5R01AI139511-05 93.838 Lung Diseases Research 5R01HL155095-03 93.855 Allergy and Infectious Diseases Research 5R01AI146581-02 93.396 Cancer Biology Research 5R01CA260178-02 93.RD MP2PRT - Cosgrove 21X121F Q2 Leidos Biomedical Research Inc 93.121 Oral Diseases and Disorders Research 5R01DE028296-05 93.865 Child Health and Human Development Extramural Research 5R01HD095976-04 93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research 109938-19114 University of Illinois Champaign 93.396 Cancer Biology Research 5R01CA247941-03 93.846 Arthritis, Musculoskeletal and Skin Diseases Research 5R01AR073908-04 93.273 Alcohol Research Programs 5R01AA027502-04 93.838 Lung Diseases Research 5R01HL155095-03 93.394 Cancer Detection and Diagnosis Research 5U24CA196173-08 93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders 1R01NS129784-01 93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders 1R01NS129784-01 93.855 Allergy and Infectious Diseases Research 5R01AI155501-03 93.859 Biomedical Research and Research Training 5R35GM131875-05 93.855 Allergy and Infectious Diseases Research 5R01AI155501-03 93.353 21st Century Cures Act - Beau Biden Cancer Moonshot 1U01CA232488-01 12.420 Military Medical Research and Development W81XWH2210597 93.846 Arthritis, Musculoskeletal and Skin Diseases Research 5R01AR073908-04 93.121 Oral Diseases and Disorders Research 5R01DE028296-05 93.396 Cancer Biology Research 1R01CA260178-01A1 93.121 Oral Diseases and Disorders Research 5R01DE028296-05 93.393 Cancer Cause and Prevention Research 1R01CA272872-01 93.121 Oral Diseases and Disorders Research ULRF_21-0285-01 University of Louisville Research Foundation, Inc. 93.353 21st Century Cures Act - Beau Biden Cancer Moonshot 1U01CA232488-01 93.RD CCG-BCR HHSN261201700015I 75N91022F000 93.855 Allergy and Infectious Diseases Research 5R21AI156406-02 93.865 Child Health and Human Development Extramural Research 5R01HD100420-03 93.394 Cancer Detection and Diagnosis Research 5U24CA254445-03 93.855 Allergy and Infectious Diseases Research 5R01AI139519-05 93.394 Cancer Detection and Diagnosis Research BSB06-RAMIREZ NRG Oncology Criteria or specific requirement (including statutory, regulatory or other citation): Section 200.303 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states the following regarding internal control: “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ‘Standards for Internal Control in the Federal Government’ issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Section 200.214 Suspension and Debarment “Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities.” Condition: Nationwide Children’s Hospital (the Corporation) uses a third-party to perform its suspension and debarment checks on a monthly basis. However, we noted the following matters: • The Corporation did not retain the monthly supporting documentation related to the monthly suspension and debarment check. The suspension and debarment checks performed at year-end were retained. • The Corporation does not have a process to reconcile the vendor list provided to the third-party vendor with the results received from the third-party vendor after the suspension and debarment checks are performed to ensure the listing is complete. • The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. The Corporation relied on the results of the suspension and debarment checks performed by the third-party vendor without implementing an internal process to ensure the results provided by the third-party vendor were accurate. In addition, the Corporation performs a suspension and debarment check of all new vendors prior to activating them in the procurement system. The Corporation did not consistently maintain supporting documentation to support the vendor was checked for suspension and debarment before the-“new”-vendor was set up in the procurement system. Cause: The Corporation does not have internal controls in place to require supporting documentation be maintained over the monthly suspension and debarment checks including documentation of management’s review and approval. The Corporation does not have internal controls in place to review the accuracy of third-party reports and to require a reconciliation between the vendor list sent to the third-party vendor and the results provided by the third-party vendor. The Corporation does not have internal controls in place to require supporting documentation be maintained over the suspension and debarment check performed on new vendors. Effect or potential effect: The Corporation’s vendors may not be screened for suspension and debarment, or the suspension and debarment results may not be accurate. A vendor may be set up in the procurement system that is suspended or debarred. Questioned costs: None Context: We tested a sample of 40 new vendors set up in the procurement system in 2023 and noted three instances where management did not retain the supporting documents of its review of suspension and debarment for the new vendor set up. The federal portion of procurement expenditures subject to suspension and debarment was $12,965,319 which represents approximately 12.5% of the R&D Cluster federal expenditures. The total amount reported on the schedule of expenditures of federal awards (Schedule) for the R&D cluster is $103,660,603. Identification as a repeat finding, if applicable: This is a repeat finding; see 2022-001. Recommendation: The Corporation should implement the following internal controls: • The monthly suspension and debarment review process • Reconciliation of the number of vendor files sent to the third-party vendor with the number of files received from the third-party vendor with the suspension and debarment results and review of the accuracy of the suspension and debarment results performed by the third-party vendor • Maintenance of the supporting documentation over the suspension and debarment checks performed on new vendors Views of responsible officials: Management agrees with the recommendation. In September 2023, E&Y rendered the same finding and recommendation for the 2022 calendar year audit. The finding has been partially remediated. Management implemented the following remediations between Q4 2023 and Q1 2024: • Retained the monthly supporting documentation related to a monthly suspension and debarment check • Reconciled the vendor list provided to the third-party vendor with the results received from the third-party vendor after the suspension and debarment checks are performed • Verified the accuracy of the results produced by the third-party vendor • Consistently maintained supporting documentation to support the vendor was checked for suspension and debarment before the “new”-vendor is set up in the procurement system. Views of responsible officials: Management agrees with the recommendation. In September 2023, E&Y rendered the same finding and recommendation for the 2022 calendar year audit. The finding has been partially remediated. Management implemented the following remediations between Q4 2023 and Q1 2024: • Retained the monthly supporting documentation related to a monthly suspension and debarment check • Reconciled the vendor list provided to the third-party vendor with the results received from the third-party vendor after the suspension and debarment checks are performed • Verified the accuracy of the results produced by the third-party vendor • Consistently maintained supporting documentation to support the vendor was checked for suspension and debarment before the “new”-vendor is set up in the procurement system.
Finding 2023-001 Identification of the federal program: Federal Agency: Department of Defense and Department of Health and Human Services Assistance Listing No., Award Name, Award Number and Pass-Through Agency: Assistance Listing Award Name Award Number Pass-Through Agency 93.865 Child Health and Human Development Extramural Research 5R00HD096115-05 93.242 Mental Health Research Grants 1R01MH130437-01A1 93.846 Arthritis, Musculoskeletal and Skin Diseases Research 5R01AR078395-02 93.837 Cardiovascular Diseases Research 5R01HL157491-02 93.393 Cancer Cause and Prevention Research 1R01CA272872-01 93.353 21st Century Cures Act - Beau Biden Cancer Moonshot 1U01CA232488-01 93.242 Mental Health Research Grants 1P50MH127476-01A1 93.855 Allergy and Infectious Diseases Research 5R01AI139511-05 93.838 Lung Diseases Research 5R01HL155095-03 93.855 Allergy and Infectious Diseases Research 5R01AI146581-02 93.396 Cancer Biology Research 5R01CA260178-02 93.RD MP2PRT - Cosgrove 21X121F Q2 Leidos Biomedical Research Inc 93.121 Oral Diseases and Disorders Research 5R01DE028296-05 93.865 Child Health and Human Development Extramural Research 5R01HD095976-04 93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research 109938-19114 University of Illinois Champaign 93.396 Cancer Biology Research 5R01CA247941-03 93.846 Arthritis, Musculoskeletal and Skin Diseases Research 5R01AR073908-04 93.273 Alcohol Research Programs 5R01AA027502-04 93.838 Lung Diseases Research 5R01HL155095-03 93.394 Cancer Detection and Diagnosis Research 5U24CA196173-08 93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders 1R01NS129784-01 93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders 1R01NS129784-01 93.855 Allergy and Infectious Diseases Research 5R01AI155501-03 93.859 Biomedical Research and Research Training 5R35GM131875-05 93.855 Allergy and Infectious Diseases Research 5R01AI155501-03 93.353 21st Century Cures Act - Beau Biden Cancer Moonshot 1U01CA232488-01 12.420 Military Medical Research and Development W81XWH2210597 93.846 Arthritis, Musculoskeletal and Skin Diseases Research 5R01AR073908-04 93.121 Oral Diseases and Disorders Research 5R01DE028296-05 93.396 Cancer Biology Research 1R01CA260178-01A1 93.121 Oral Diseases and Disorders Research 5R01DE028296-05 93.393 Cancer Cause and Prevention Research 1R01CA272872-01 93.121 Oral Diseases and Disorders Research ULRF_21-0285-01 University of Louisville Research Foundation, Inc. 93.353 21st Century Cures Act - Beau Biden Cancer Moonshot 1U01CA232488-01 93.RD CCG-BCR HHSN261201700015I 75N91022F000 93.855 Allergy and Infectious Diseases Research 5R21AI156406-02 93.865 Child Health and Human Development Extramural Research 5R01HD100420-03 93.394 Cancer Detection and Diagnosis Research 5U24CA254445-03 93.855 Allergy and Infectious Diseases Research 5R01AI139519-05 93.394 Cancer Detection and Diagnosis Research BSB06-RAMIREZ NRG Oncology Criteria or specific requirement (including statutory, regulatory or other citation): Section 200.303 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states the following regarding internal control: “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ‘Standards for Internal Control in the Federal Government’ issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Section 200.214 Suspension and Debarment “Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities.” Condition: Nationwide Children’s Hospital (the Corporation) uses a third-party to perform its suspension and debarment checks on a monthly basis. However, we noted the following matters: • The Corporation did not retain the monthly supporting documentation related to the monthly suspension and debarment check. The suspension and debarment checks performed at year-end were retained. • The Corporation does not have a process to reconcile the vendor list provided to the third-party vendor with the results received from the third-party vendor after the suspension and debarment checks are performed to ensure the listing is complete. • The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. The Corporation relied on the results of the suspension and debarment checks performed by the third-party vendor without implementing an internal process to ensure the results provided by the third-party vendor were accurate. In addition, the Corporation performs a suspension and debarment check of all new vendors prior to activating them in the procurement system. The Corporation did not consistently maintain supporting documentation to support the vendor was checked for suspension and debarment before the-“new”-vendor was set up in the procurement system. Cause: The Corporation does not have internal controls in place to require supporting documentation be maintained over the monthly suspension and debarment checks including documentation of management’s review and approval. The Corporation does not have internal controls in place to review the accuracy of third-party reports and to require a reconciliation between the vendor list sent to the third-party vendor and the results provided by the third-party vendor. The Corporation does not have internal controls in place to require supporting documentation be maintained over the suspension and debarment check performed on new vendors. Effect or potential effect: The Corporation’s vendors may not be screened for suspension and debarment, or the suspension and debarment results may not be accurate. A vendor may be set up in the procurement system that is suspended or debarred. Questioned costs: None Context: We tested a sample of 40 new vendors set up in the procurement system in 2023 and noted three instances where management did not retain the supporting documents of its review of suspension and debarment for the new vendor set up. The federal portion of procurement expenditures subject to suspension and debarment was $12,965,319 which represents approximately 12.5% of the R&D Cluster federal expenditures. The total amount reported on the schedule of expenditures of federal awards (Schedule) for the R&D cluster is $103,660,603. Identification as a repeat finding, if applicable: This is a repeat finding; see 2022-001. Recommendation: The Corporation should implement the following internal controls: • The monthly suspension and debarment review process • Reconciliation of the number of vendor files sent to the third-party vendor with the number of files received from the third-party vendor with the suspension and debarment results and review of the accuracy of the suspension and debarment results performed by the third-party vendor • Maintenance of the supporting documentation over the suspension and debarment checks performed on new vendors Views of responsible officials: Management agrees with the recommendation. In September 2023, E&Y rendered the same finding and recommendation for the 2022 calendar year audit. The finding has been partially remediated. Management implemented the following remediations between Q4 2023 and Q1 2024: • Retained the monthly supporting documentation related to a monthly suspension and debarment check • Reconciled the vendor list provided to the third-party vendor with the results received from the third-party vendor after the suspension and debarment checks are performed • Verified the accuracy of the results produced by the third-party vendor • Consistently maintained supporting documentation to support the vendor was checked for suspension and debarment before the “new”-vendor is set up in the procurement system. Views of responsible officials: Management agrees with the recommendation. In September 2023, E&Y rendered the same finding and recommendation for the 2022 calendar year audit. The finding has been partially remediated. Management implemented the following remediations between Q4 2023 and Q1 2024: • Retained the monthly supporting documentation related to a monthly suspension and debarment check • Reconciled the vendor list provided to the third-party vendor with the results received from the third-party vendor after the suspension and debarment checks are performed • Verified the accuracy of the results produced by the third-party vendor • Consistently maintained supporting documentation to support the vendor was checked for suspension and debarment before the “new”-vendor is set up in the procurement system.
Finding 2023-001 Identification of the federal program: Federal Agency: Department of Defense and Department of Health and Human Services Assistance Listing No., Award Name, Award Number and Pass-Through Agency: Assistance Listing Award Name Award Number Pass-Through Agency 93.865 Child Health and Human Development Extramural Research 5R00HD096115-05 93.242 Mental Health Research Grants 1R01MH130437-01A1 93.846 Arthritis, Musculoskeletal and Skin Diseases Research 5R01AR078395-02 93.837 Cardiovascular Diseases Research 5R01HL157491-02 93.393 Cancer Cause and Prevention Research 1R01CA272872-01 93.353 21st Century Cures Act - Beau Biden Cancer Moonshot 1U01CA232488-01 93.242 Mental Health Research Grants 1P50MH127476-01A1 93.855 Allergy and Infectious Diseases Research 5R01AI139511-05 93.838 Lung Diseases Research 5R01HL155095-03 93.855 Allergy and Infectious Diseases Research 5R01AI146581-02 93.396 Cancer Biology Research 5R01CA260178-02 93.RD MP2PRT - Cosgrove 21X121F Q2 Leidos Biomedical Research Inc 93.121 Oral Diseases and Disorders Research 5R01DE028296-05 93.865 Child Health and Human Development Extramural Research 5R01HD095976-04 93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research 109938-19114 University of Illinois Champaign 93.396 Cancer Biology Research 5R01CA247941-03 93.846 Arthritis, Musculoskeletal and Skin Diseases Research 5R01AR073908-04 93.273 Alcohol Research Programs 5R01AA027502-04 93.838 Lung Diseases Research 5R01HL155095-03 93.394 Cancer Detection and Diagnosis Research 5U24CA196173-08 93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders 1R01NS129784-01 93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders 1R01NS129784-01 93.855 Allergy and Infectious Diseases Research 5R01AI155501-03 93.859 Biomedical Research and Research Training 5R35GM131875-05 93.855 Allergy and Infectious Diseases Research 5R01AI155501-03 93.353 21st Century Cures Act - Beau Biden Cancer Moonshot 1U01CA232488-01 12.420 Military Medical Research and Development W81XWH2210597 93.846 Arthritis, Musculoskeletal and Skin Diseases Research 5R01AR073908-04 93.121 Oral Diseases and Disorders Research 5R01DE028296-05 93.396 Cancer Biology Research 1R01CA260178-01A1 93.121 Oral Diseases and Disorders Research 5R01DE028296-05 93.393 Cancer Cause and Prevention Research 1R01CA272872-01 93.121 Oral Diseases and Disorders Research ULRF_21-0285-01 University of Louisville Research Foundation, Inc. 93.353 21st Century Cures Act - Beau Biden Cancer Moonshot 1U01CA232488-01 93.RD CCG-BCR HHSN261201700015I 75N91022F000 93.855 Allergy and Infectious Diseases Research 5R21AI156406-02 93.865 Child Health and Human Development Extramural Research 5R01HD100420-03 93.394 Cancer Detection and Diagnosis Research 5U24CA254445-03 93.855 Allergy and Infectious Diseases Research 5R01AI139519-05 93.394 Cancer Detection and Diagnosis Research BSB06-RAMIREZ NRG Oncology Criteria or specific requirement (including statutory, regulatory or other citation): Section 200.303 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states the following regarding internal control: “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ‘Standards for Internal Control in the Federal Government’ issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Section 200.214 Suspension and Debarment “Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities.” Condition: Nationwide Children’s Hospital (the Corporation) uses a third-party to perform its suspension and debarment checks on a monthly basis. However, we noted the following matters: • The Corporation did not retain the monthly supporting documentation related to the monthly suspension and debarment check. The suspension and debarment checks performed at year-end were retained. • The Corporation does not have a process to reconcile the vendor list provided to the third-party vendor with the results received from the third-party vendor after the suspension and debarment checks are performed to ensure the listing is complete. • The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. The Corporation relied on the results of the suspension and debarment checks performed by the third-party vendor without implementing an internal process to ensure the results provided by the third-party vendor were accurate. In addition, the Corporation performs a suspension and debarment check of all new vendors prior to activating them in the procurement system. The Corporation did not consistently maintain supporting documentation to support the vendor was checked for suspension and debarment before the-“new”-vendor was set up in the procurement system. Cause: The Corporation does not have internal controls in place to require supporting documentation be maintained over the monthly suspension and debarment checks including documentation of management’s review and approval. The Corporation does not have internal controls in place to review the accuracy of third-party reports and to require a reconciliation between the vendor list sent to the third-party vendor and the results provided by the third-party vendor. The Corporation does not have internal controls in place to require supporting documentation be maintained over the suspension and debarment check performed on new vendors. Effect or potential effect: The Corporation’s vendors may not be screened for suspension and debarment, or the suspension and debarment results may not be accurate. A vendor may be set up in the procurement system that is suspended or debarred. Questioned costs: None Context: We tested a sample of 40 new vendors set up in the procurement system in 2023 and noted three instances where management did not retain the supporting documents of its review of suspension and debarment for the new vendor set up. The federal portion of procurement expenditures subject to suspension and debarment was $12,965,319 which represents approximately 12.5% of the R&D Cluster federal expenditures. The total amount reported on the schedule of expenditures of federal awards (Schedule) for the R&D cluster is $103,660,603. Identification as a repeat finding, if applicable: This is a repeat finding; see 2022-001. Recommendation: The Corporation should implement the following internal controls: • The monthly suspension and debarment review process • Reconciliation of the number of vendor files sent to the third-party vendor with the number of files received from the third-party vendor with the suspension and debarment results and review of the accuracy of the suspension and debarment results performed by the third-party vendor • Maintenance of the supporting documentation over the suspension and debarment checks performed on new vendors Views of responsible officials: Management agrees with the recommendation. In September 2023, E&Y rendered the same finding and recommendation for the 2022 calendar year audit. The finding has been partially remediated. Management implemented the following remediations between Q4 2023 and Q1 2024: • Retained the monthly supporting documentation related to a monthly suspension and debarment check • Reconciled the vendor list provided to the third-party vendor with the results received from the third-party vendor after the suspension and debarment checks are performed • Verified the accuracy of the results produced by the third-party vendor • Consistently maintained supporting documentation to support the vendor was checked for suspension and debarment before the “new”-vendor is set up in the procurement system. Views of responsible officials: Management agrees with the recommendation. In September 2023, E&Y rendered the same finding and recommendation for the 2022 calendar year audit. The finding has been partially remediated. Management implemented the following remediations between Q4 2023 and Q1 2024: • Retained the monthly supporting documentation related to a monthly suspension and debarment check • Reconciled the vendor list provided to the third-party vendor with the results received from the third-party vendor after the suspension and debarment checks are performed • Verified the accuracy of the results produced by the third-party vendor • Consistently maintained supporting documentation to support the vendor was checked for suspension and debarment before the “new”-vendor is set up in the procurement system.
Finding 2023-001 Identification of the federal program: Federal Agency: Department of Defense and Department of Health and Human Services Assistance Listing No., Award Name, Award Number and Pass-Through Agency: Assistance Listing Award Name Award Number Pass-Through Agency 93.865 Child Health and Human Development Extramural Research 5R00HD096115-05 93.242 Mental Health Research Grants 1R01MH130437-01A1 93.846 Arthritis, Musculoskeletal and Skin Diseases Research 5R01AR078395-02 93.837 Cardiovascular Diseases Research 5R01HL157491-02 93.393 Cancer Cause and Prevention Research 1R01CA272872-01 93.353 21st Century Cures Act - Beau Biden Cancer Moonshot 1U01CA232488-01 93.242 Mental Health Research Grants 1P50MH127476-01A1 93.855 Allergy and Infectious Diseases Research 5R01AI139511-05 93.838 Lung Diseases Research 5R01HL155095-03 93.855 Allergy and Infectious Diseases Research 5R01AI146581-02 93.396 Cancer Biology Research 5R01CA260178-02 93.RD MP2PRT - Cosgrove 21X121F Q2 Leidos Biomedical Research Inc 93.121 Oral Diseases and Disorders Research 5R01DE028296-05 93.865 Child Health and Human Development Extramural Research 5R01HD095976-04 93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research 109938-19114 University of Illinois Champaign 93.396 Cancer Biology Research 5R01CA247941-03 93.846 Arthritis, Musculoskeletal and Skin Diseases Research 5R01AR073908-04 93.273 Alcohol Research Programs 5R01AA027502-04 93.838 Lung Diseases Research 5R01HL155095-03 93.394 Cancer Detection and Diagnosis Research 5U24CA196173-08 93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders 1R01NS129784-01 93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders 1R01NS129784-01 93.855 Allergy and Infectious Diseases Research 5R01AI155501-03 93.859 Biomedical Research and Research Training 5R35GM131875-05 93.855 Allergy and Infectious Diseases Research 5R01AI155501-03 93.353 21st Century Cures Act - Beau Biden Cancer Moonshot 1U01CA232488-01 12.420 Military Medical Research and Development W81XWH2210597 93.846 Arthritis, Musculoskeletal and Skin Diseases Research 5R01AR073908-04 93.121 Oral Diseases and Disorders Research 5R01DE028296-05 93.396 Cancer Biology Research 1R01CA260178-01A1 93.121 Oral Diseases and Disorders Research 5R01DE028296-05 93.393 Cancer Cause and Prevention Research 1R01CA272872-01 93.121 Oral Diseases and Disorders Research ULRF_21-0285-01 University of Louisville Research Foundation, Inc. 93.353 21st Century Cures Act - Beau Biden Cancer Moonshot 1U01CA232488-01 93.RD CCG-BCR HHSN261201700015I 75N91022F000 93.855 Allergy and Infectious Diseases Research 5R21AI156406-02 93.865 Child Health and Human Development Extramural Research 5R01HD100420-03 93.394 Cancer Detection and Diagnosis Research 5U24CA254445-03 93.855 Allergy and Infectious Diseases Research 5R01AI139519-05 93.394 Cancer Detection and Diagnosis Research BSB06-RAMIREZ NRG Oncology Criteria or specific requirement (including statutory, regulatory or other citation): Section 200.303 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states the following regarding internal control: “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ‘Standards for Internal Control in the Federal Government’ issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Section 200.214 Suspension and Debarment “Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities.” Condition: Nationwide Children’s Hospital (the Corporation) uses a third-party to perform its suspension and debarment checks on a monthly basis. However, we noted the following matters: • The Corporation did not retain the monthly supporting documentation related to the monthly suspension and debarment check. The suspension and debarment checks performed at year-end were retained. • The Corporation does not have a process to reconcile the vendor list provided to the third-party vendor with the results received from the third-party vendor after the suspension and debarment checks are performed to ensure the listing is complete. • The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. The Corporation relied on the results of the suspension and debarment checks performed by the third-party vendor without implementing an internal process to ensure the results provided by the third-party vendor were accurate. In addition, the Corporation performs a suspension and debarment check of all new vendors prior to activating them in the procurement system. The Corporation did not consistently maintain supporting documentation to support the vendor was checked for suspension and debarment before the-“new”-vendor was set up in the procurement system. Cause: The Corporation does not have internal controls in place to require supporting documentation be maintained over the monthly suspension and debarment checks including documentation of management’s review and approval. The Corporation does not have internal controls in place to review the accuracy of third-party reports and to require a reconciliation between the vendor list sent to the third-party vendor and the results provided by the third-party vendor. The Corporation does not have internal controls in place to require supporting documentation be maintained over the suspension and debarment check performed on new vendors. Effect or potential effect: The Corporation’s vendors may not be screened for suspension and debarment, or the suspension and debarment results may not be accurate. A vendor may be set up in the procurement system that is suspended or debarred. Questioned costs: None Context: We tested a sample of 40 new vendors set up in the procurement system in 2023 and noted three instances where management did not retain the supporting documents of its review of suspension and debarment for the new vendor set up. The federal portion of procurement expenditures subject to suspension and debarment was $12,965,319 which represents approximately 12.5% of the R&D Cluster federal expenditures. The total amount reported on the schedule of expenditures of federal awards (Schedule) for the R&D cluster is $103,660,603. Identification as a repeat finding, if applicable: This is a repeat finding; see 2022-001. Recommendation: The Corporation should implement the following internal controls: • The monthly suspension and debarment review process • Reconciliation of the number of vendor files sent to the third-party vendor with the number of files received from the third-party vendor with the suspension and debarment results and review of the accuracy of the suspension and debarment results performed by the third-party vendor • Maintenance of the supporting documentation over the suspension and debarment checks performed on new vendors Views of responsible officials: Management agrees with the recommendation. In September 2023, E&Y rendered the same finding and recommendation for the 2022 calendar year audit. The finding has been partially remediated. Management implemented the following remediations between Q4 2023 and Q1 2024: • Retained the monthly supporting documentation related to a monthly suspension and debarment check • Reconciled the vendor list provided to the third-party vendor with the results received from the third-party vendor after the suspension and debarment checks are performed • Verified the accuracy of the results produced by the third-party vendor • Consistently maintained supporting documentation to support the vendor was checked for suspension and debarment before the “new”-vendor is set up in the procurement system. Views of responsible officials: Management agrees with the recommendation. In September 2023, E&Y rendered the same finding and recommendation for the 2022 calendar year audit. The finding has been partially remediated. Management implemented the following remediations between Q4 2023 and Q1 2024: • Retained the monthly supporting documentation related to a monthly suspension and debarment check • Reconciled the vendor list provided to the third-party vendor with the results received from the third-party vendor after the suspension and debarment checks are performed • Verified the accuracy of the results produced by the third-party vendor • Consistently maintained supporting documentation to support the vendor was checked for suspension and debarment before the “new”-vendor is set up in the procurement system.
Finding 2023-001 Identification of the federal program: Federal Agency: Department of Defense and Department of Health and Human Services Assistance Listing No., Award Name, Award Number and Pass-Through Agency: Assistance Listing Award Name Award Number Pass-Through Agency 93.865 Child Health and Human Development Extramural Research 5R00HD096115-05 93.242 Mental Health Research Grants 1R01MH130437-01A1 93.846 Arthritis, Musculoskeletal and Skin Diseases Research 5R01AR078395-02 93.837 Cardiovascular Diseases Research 5R01HL157491-02 93.393 Cancer Cause and Prevention Research 1R01CA272872-01 93.353 21st Century Cures Act - Beau Biden Cancer Moonshot 1U01CA232488-01 93.242 Mental Health Research Grants 1P50MH127476-01A1 93.855 Allergy and Infectious Diseases Research 5R01AI139511-05 93.838 Lung Diseases Research 5R01HL155095-03 93.855 Allergy and Infectious Diseases Research 5R01AI146581-02 93.396 Cancer Biology Research 5R01CA260178-02 93.RD MP2PRT - Cosgrove 21X121F Q2 Leidos Biomedical Research Inc 93.121 Oral Diseases and Disorders Research 5R01DE028296-05 93.865 Child Health and Human Development Extramural Research 5R01HD095976-04 93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research 109938-19114 University of Illinois Champaign 93.396 Cancer Biology Research 5R01CA247941-03 93.846 Arthritis, Musculoskeletal and Skin Diseases Research 5R01AR073908-04 93.273 Alcohol Research Programs 5R01AA027502-04 93.838 Lung Diseases Research 5R01HL155095-03 93.394 Cancer Detection and Diagnosis Research 5U24CA196173-08 93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders 1R01NS129784-01 93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders 1R01NS129784-01 93.855 Allergy and Infectious Diseases Research 5R01AI155501-03 93.859 Biomedical Research and Research Training 5R35GM131875-05 93.855 Allergy and Infectious Diseases Research 5R01AI155501-03 93.353 21st Century Cures Act - Beau Biden Cancer Moonshot 1U01CA232488-01 12.420 Military Medical Research and Development W81XWH2210597 93.846 Arthritis, Musculoskeletal and Skin Diseases Research 5R01AR073908-04 93.121 Oral Diseases and Disorders Research 5R01DE028296-05 93.396 Cancer Biology Research 1R01CA260178-01A1 93.121 Oral Diseases and Disorders Research 5R01DE028296-05 93.393 Cancer Cause and Prevention Research 1R01CA272872-01 93.121 Oral Diseases and Disorders Research ULRF_21-0285-01 University of Louisville Research Foundation, Inc. 93.353 21st Century Cures Act - Beau Biden Cancer Moonshot 1U01CA232488-01 93.RD CCG-BCR HHSN261201700015I 75N91022F000 93.855 Allergy and Infectious Diseases Research 5R21AI156406-02 93.865 Child Health and Human Development Extramural Research 5R01HD100420-03 93.394 Cancer Detection and Diagnosis Research 5U24CA254445-03 93.855 Allergy and Infectious Diseases Research 5R01AI139519-05 93.394 Cancer Detection and Diagnosis Research BSB06-RAMIREZ NRG Oncology Criteria or specific requirement (including statutory, regulatory or other citation): Section 200.303 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states the following regarding internal control: “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ‘Standards for Internal Control in the Federal Government’ issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Section 200.214 Suspension and Debarment “Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities.” Condition: Nationwide Children’s Hospital (the Corporation) uses a third-party to perform its suspension and debarment checks on a monthly basis. However, we noted the following matters: • The Corporation did not retain the monthly supporting documentation related to the monthly suspension and debarment check. The suspension and debarment checks performed at year-end were retained. • The Corporation does not have a process to reconcile the vendor list provided to the third-party vendor with the results received from the third-party vendor after the suspension and debarment checks are performed to ensure the listing is complete. • The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. The Corporation relied on the results of the suspension and debarment checks performed by the third-party vendor without implementing an internal process to ensure the results provided by the third-party vendor were accurate. In addition, the Corporation performs a suspension and debarment check of all new vendors prior to activating them in the procurement system. The Corporation did not consistently maintain supporting documentation to support the vendor was checked for suspension and debarment before the-“new”-vendor was set up in the procurement system. Cause: The Corporation does not have internal controls in place to require supporting documentation be maintained over the monthly suspension and debarment checks including documentation of management’s review and approval. The Corporation does not have internal controls in place to review the accuracy of third-party reports and to require a reconciliation between the vendor list sent to the third-party vendor and the results provided by the third-party vendor. The Corporation does not have internal controls in place to require supporting documentation be maintained over the suspension and debarment check performed on new vendors. Effect or potential effect: The Corporation’s vendors may not be screened for suspension and debarment, or the suspension and debarment results may not be accurate. A vendor may be set up in the procurement system that is suspended or debarred. Questioned costs: None Context: We tested a sample of 40 new vendors set up in the procurement system in 2023 and noted three instances where management did not retain the supporting documents of its review of suspension and debarment for the new vendor set up. The federal portion of procurement expenditures subject to suspension and debarment was $12,965,319 which represents approximately 12.5% of the R&D Cluster federal expenditures. The total amount reported on the schedule of expenditures of federal awards (Schedule) for the R&D cluster is $103,660,603. Identification as a repeat finding, if applicable: This is a repeat finding; see 2022-001. Recommendation: The Corporation should implement the following internal controls: • The monthly suspension and debarment review process • Reconciliation of the number of vendor files sent to the third-party vendor with the number of files received from the third-party vendor with the suspension and debarment results and review of the accuracy of the suspension and debarment results performed by the third-party vendor • Maintenance of the supporting documentation over the suspension and debarment checks performed on new vendors Views of responsible officials: Management agrees with the recommendation. In September 2023, E&Y rendered the same finding and recommendation for the 2022 calendar year audit. The finding has been partially remediated. Management implemented the following remediations between Q4 2023 and Q1 2024: • Retained the monthly supporting documentation related to a monthly suspension and debarment check • Reconciled the vendor list provided to the third-party vendor with the results received from the third-party vendor after the suspension and debarment checks are performed • Verified the accuracy of the results produced by the third-party vendor • Consistently maintained supporting documentation to support the vendor was checked for suspension and debarment before the “new”-vendor is set up in the procurement system. Views of responsible officials: Management agrees with the recommendation. In September 2023, E&Y rendered the same finding and recommendation for the 2022 calendar year audit. The finding has been partially remediated. Management implemented the following remediations between Q4 2023 and Q1 2024: • Retained the monthly supporting documentation related to a monthly suspension and debarment check • Reconciled the vendor list provided to the third-party vendor with the results received from the third-party vendor after the suspension and debarment checks are performed • Verified the accuracy of the results produced by the third-party vendor • Consistently maintained supporting documentation to support the vendor was checked for suspension and debarment before the “new”-vendor is set up in the procurement system.
Finding 2023-001 Identification of the federal program: Federal Agency: Department of Defense and Department of Health and Human Services Assistance Listing No., Award Name, Award Number and Pass-Through Agency: Assistance Listing Award Name Award Number Pass-Through Agency 93.865 Child Health and Human Development Extramural Research 5R00HD096115-05 93.242 Mental Health Research Grants 1R01MH130437-01A1 93.846 Arthritis, Musculoskeletal and Skin Diseases Research 5R01AR078395-02 93.837 Cardiovascular Diseases Research 5R01HL157491-02 93.393 Cancer Cause and Prevention Research 1R01CA272872-01 93.353 21st Century Cures Act - Beau Biden Cancer Moonshot 1U01CA232488-01 93.242 Mental Health Research Grants 1P50MH127476-01A1 93.855 Allergy and Infectious Diseases Research 5R01AI139511-05 93.838 Lung Diseases Research 5R01HL155095-03 93.855 Allergy and Infectious Diseases Research 5R01AI146581-02 93.396 Cancer Biology Research 5R01CA260178-02 93.RD MP2PRT - Cosgrove 21X121F Q2 Leidos Biomedical Research Inc 93.121 Oral Diseases and Disorders Research 5R01DE028296-05 93.865 Child Health and Human Development Extramural Research 5R01HD095976-04 93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research 109938-19114 University of Illinois Champaign 93.396 Cancer Biology Research 5R01CA247941-03 93.846 Arthritis, Musculoskeletal and Skin Diseases Research 5R01AR073908-04 93.273 Alcohol Research Programs 5R01AA027502-04 93.838 Lung Diseases Research 5R01HL155095-03 93.394 Cancer Detection and Diagnosis Research 5U24CA196173-08 93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders 1R01NS129784-01 93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders 1R01NS129784-01 93.855 Allergy and Infectious Diseases Research 5R01AI155501-03 93.859 Biomedical Research and Research Training 5R35GM131875-05 93.855 Allergy and Infectious Diseases Research 5R01AI155501-03 93.353 21st Century Cures Act - Beau Biden Cancer Moonshot 1U01CA232488-01 12.420 Military Medical Research and Development W81XWH2210597 93.846 Arthritis, Musculoskeletal and Skin Diseases Research 5R01AR073908-04 93.121 Oral Diseases and Disorders Research 5R01DE028296-05 93.396 Cancer Biology Research 1R01CA260178-01A1 93.121 Oral Diseases and Disorders Research 5R01DE028296-05 93.393 Cancer Cause and Prevention Research 1R01CA272872-01 93.121 Oral Diseases and Disorders Research ULRF_21-0285-01 University of Louisville Research Foundation, Inc. 93.353 21st Century Cures Act - Beau Biden Cancer Moonshot 1U01CA232488-01 93.RD CCG-BCR HHSN261201700015I 75N91022F000 93.855 Allergy and Infectious Diseases Research 5R21AI156406-02 93.865 Child Health and Human Development Extramural Research 5R01HD100420-03 93.394 Cancer Detection and Diagnosis Research 5U24CA254445-03 93.855 Allergy and Infectious Diseases Research 5R01AI139519-05 93.394 Cancer Detection and Diagnosis Research BSB06-RAMIREZ NRG Oncology Criteria or specific requirement (including statutory, regulatory or other citation): Section 200.303 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states the following regarding internal control: “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ‘Standards for Internal Control in the Federal Government’ issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Section 200.214 Suspension and Debarment “Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities.” Condition: Nationwide Children’s Hospital (the Corporation) uses a third-party to perform its suspension and debarment checks on a monthly basis. However, we noted the following matters: • The Corporation did not retain the monthly supporting documentation related to the monthly suspension and debarment check. The suspension and debarment checks performed at year-end were retained. • The Corporation does not have a process to reconcile the vendor list provided to the third-party vendor with the results received from the third-party vendor after the suspension and debarment checks are performed to ensure the listing is complete. • The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. The Corporation relied on the results of the suspension and debarment checks performed by the third-party vendor without implementing an internal process to ensure the results provided by the third-party vendor were accurate. In addition, the Corporation performs a suspension and debarment check of all new vendors prior to activating them in the procurement system. The Corporation did not consistently maintain supporting documentation to support the vendor was checked for suspension and debarment before the-“new”-vendor was set up in the procurement system. Cause: The Corporation does not have internal controls in place to require supporting documentation be maintained over the monthly suspension and debarment checks including documentation of management’s review and approval. The Corporation does not have internal controls in place to review the accuracy of third-party reports and to require a reconciliation between the vendor list sent to the third-party vendor and the results provided by the third-party vendor. The Corporation does not have internal controls in place to require supporting documentation be maintained over the suspension and debarment check performed on new vendors. Effect or potential effect: The Corporation’s vendors may not be screened for suspension and debarment, or the suspension and debarment results may not be accurate. A vendor may be set up in the procurement system that is suspended or debarred. Questioned costs: None Context: We tested a sample of 40 new vendors set up in the procurement system in 2023 and noted three instances where management did not retain the supporting documents of its review of suspension and debarment for the new vendor set up. The federal portion of procurement expenditures subject to suspension and debarment was $12,965,319 which represents approximately 12.5% of the R&D Cluster federal expenditures. The total amount reported on the schedule of expenditures of federal awards (Schedule) for the R&D cluster is $103,660,603. Identification as a repeat finding, if applicable: This is a repeat finding; see 2022-001. Recommendation: The Corporation should implement the following internal controls: • The monthly suspension and debarment review process • Reconciliation of the number of vendor files sent to the third-party vendor with the number of files received from the third-party vendor with the suspension and debarment results and review of the accuracy of the suspension and debarment results performed by the third-party vendor • Maintenance of the supporting documentation over the suspension and debarment checks performed on new vendors Views of responsible officials: Management agrees with the recommendation. In September 2023, E&Y rendered the same finding and recommendation for the 2022 calendar year audit. The finding has been partially remediated. Management implemented the following remediations between Q4 2023 and Q1 2024: • Retained the monthly supporting documentation related to a monthly suspension and debarment check • Reconciled the vendor list provided to the third-party vendor with the results received from the third-party vendor after the suspension and debarment checks are performed • Verified the accuracy of the results produced by the third-party vendor • Consistently maintained supporting documentation to support the vendor was checked for suspension and debarment before the “new”-vendor is set up in the procurement system. Views of responsible officials: Management agrees with the recommendation. In September 2023, E&Y rendered the same finding and recommendation for the 2022 calendar year audit. The finding has been partially remediated. Management implemented the following remediations between Q4 2023 and Q1 2024: • Retained the monthly supporting documentation related to a monthly suspension and debarment check • Reconciled the vendor list provided to the third-party vendor with the results received from the third-party vendor after the suspension and debarment checks are performed • Verified the accuracy of the results produced by the third-party vendor • Consistently maintained supporting documentation to support the vendor was checked for suspension and debarment before the “new”-vendor is set up in the procurement system.
Finding 2023-001 Identification of the federal program: Federal Agency: Department of Defense and Department of Health and Human Services Assistance Listing No., Award Name, Award Number and Pass-Through Agency: Assistance Listing Award Name Award Number Pass-Through Agency 93.865 Child Health and Human Development Extramural Research 5R00HD096115-05 93.242 Mental Health Research Grants 1R01MH130437-01A1 93.846 Arthritis, Musculoskeletal and Skin Diseases Research 5R01AR078395-02 93.837 Cardiovascular Diseases Research 5R01HL157491-02 93.393 Cancer Cause and Prevention Research 1R01CA272872-01 93.353 21st Century Cures Act - Beau Biden Cancer Moonshot 1U01CA232488-01 93.242 Mental Health Research Grants 1P50MH127476-01A1 93.855 Allergy and Infectious Diseases Research 5R01AI139511-05 93.838 Lung Diseases Research 5R01HL155095-03 93.855 Allergy and Infectious Diseases Research 5R01AI146581-02 93.396 Cancer Biology Research 5R01CA260178-02 93.RD MP2PRT - Cosgrove 21X121F Q2 Leidos Biomedical Research Inc 93.121 Oral Diseases and Disorders Research 5R01DE028296-05 93.865 Child Health and Human Development Extramural Research 5R01HD095976-04 93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research 109938-19114 University of Illinois Champaign 93.396 Cancer Biology Research 5R01CA247941-03 93.846 Arthritis, Musculoskeletal and Skin Diseases Research 5R01AR073908-04 93.273 Alcohol Research Programs 5R01AA027502-04 93.838 Lung Diseases Research 5R01HL155095-03 93.394 Cancer Detection and Diagnosis Research 5U24CA196173-08 93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders 1R01NS129784-01 93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders 1R01NS129784-01 93.855 Allergy and Infectious Diseases Research 5R01AI155501-03 93.859 Biomedical Research and Research Training 5R35GM131875-05 93.855 Allergy and Infectious Diseases Research 5R01AI155501-03 93.353 21st Century Cures Act - Beau Biden Cancer Moonshot 1U01CA232488-01 12.420 Military Medical Research and Development W81XWH2210597 93.846 Arthritis, Musculoskeletal and Skin Diseases Research 5R01AR073908-04 93.121 Oral Diseases and Disorders Research 5R01DE028296-05 93.396 Cancer Biology Research 1R01CA260178-01A1 93.121 Oral Diseases and Disorders Research 5R01DE028296-05 93.393 Cancer Cause and Prevention Research 1R01CA272872-01 93.121 Oral Diseases and Disorders Research ULRF_21-0285-01 University of Louisville Research Foundation, Inc. 93.353 21st Century Cures Act - Beau Biden Cancer Moonshot 1U01CA232488-01 93.RD CCG-BCR HHSN261201700015I 75N91022F000 93.855 Allergy and Infectious Diseases Research 5R21AI156406-02 93.865 Child Health and Human Development Extramural Research 5R01HD100420-03 93.394 Cancer Detection and Diagnosis Research 5U24CA254445-03 93.855 Allergy and Infectious Diseases Research 5R01AI139519-05 93.394 Cancer Detection and Diagnosis Research BSB06-RAMIREZ NRG Oncology Criteria or specific requirement (including statutory, regulatory or other citation): Section 200.303 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states the following regarding internal control: “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ‘Standards for Internal Control in the Federal Government’ issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Section 200.214 Suspension and Debarment “Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities.” Condition: Nationwide Children’s Hospital (the Corporation) uses a third-party to perform its suspension and debarment checks on a monthly basis. However, we noted the following matters: • The Corporation did not retain the monthly supporting documentation related to the monthly suspension and debarment check. The suspension and debarment checks performed at year-end were retained. • The Corporation does not have a process to reconcile the vendor list provided to the third-party vendor with the results received from the third-party vendor after the suspension and debarment checks are performed to ensure the listing is complete. • The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. The Corporation relied on the results of the suspension and debarment checks performed by the third-party vendor without implementing an internal process to ensure the results provided by the third-party vendor were accurate. In addition, the Corporation performs a suspension and debarment check of all new vendors prior to activating them in the procurement system. The Corporation did not consistently maintain supporting documentation to support the vendor was checked for suspension and debarment before the-“new”-vendor was set up in the procurement system. Cause: The Corporation does not have internal controls in place to require supporting documentation be maintained over the monthly suspension and debarment checks including documentation of management’s review and approval. The Corporation does not have internal controls in place to review the accuracy of third-party reports and to require a reconciliation between the vendor list sent to the third-party vendor and the results provided by the third-party vendor. The Corporation does not have internal controls in place to require supporting documentation be maintained over the suspension and debarment check performed on new vendors. Effect or potential effect: The Corporation’s vendors may not be screened for suspension and debarment, or the suspension and debarment results may not be accurate. A vendor may be set up in the procurement system that is suspended or debarred. Questioned costs: None Context: We tested a sample of 40 new vendors set up in the procurement system in 2023 and noted three instances where management did not retain the supporting documents of its review of suspension and debarment for the new vendor set up. The federal portion of procurement expenditures subject to suspension and debarment was $12,965,319 which represents approximately 12.5% of the R&D Cluster federal expenditures. The total amount reported on the schedule of expenditures of federal awards (Schedule) for the R&D cluster is $103,660,603. Identification as a repeat finding, if applicable: This is a repeat finding; see 2022-001. Recommendation: The Corporation should implement the following internal controls: • The monthly suspension and debarment review process • Reconciliation of the number of vendor files sent to the third-party vendor with the number of files received from the third-party vendor with the suspension and debarment results and review of the accuracy of the suspension and debarment results performed by the third-party vendor • Maintenance of the supporting documentation over the suspension and debarment checks performed on new vendors Views of responsible officials: Management agrees with the recommendation. In September 2023, E&Y rendered the same finding and recommendation for the 2022 calendar year audit. The finding has been partially remediated. Management implemented the following remediations between Q4 2023 and Q1 2024: • Retained the monthly supporting documentation related to a monthly suspension and debarment check • Reconciled the vendor list provided to the third-party vendor with the results received from the third-party vendor after the suspension and debarment checks are performed • Verified the accuracy of the results produced by the third-party vendor • Consistently maintained supporting documentation to support the vendor was checked for suspension and debarment before the “new”-vendor is set up in the procurement system. Views of responsible officials: Management agrees with the recommendation. In September 2023, E&Y rendered the same finding and recommendation for the 2022 calendar year audit. The finding has been partially remediated. Management implemented the following remediations between Q4 2023 and Q1 2024: • Retained the monthly supporting documentation related to a monthly suspension and debarment check • Reconciled the vendor list provided to the third-party vendor with the results received from the third-party vendor after the suspension and debarment checks are performed • Verified the accuracy of the results produced by the third-party vendor • Consistently maintained supporting documentation to support the vendor was checked for suspension and debarment before the “new”-vendor is set up in the procurement system.
Finding 2023-004: Procurement, Suspension, and Debarment (Significant Deficiency) Information on the Federal Programs: Both Major Programs Criteria or Specific Requirement: 2 CFR Section 200.318 requires that the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. In addition, 2 CFR Section 200.214 requires that, for covered transactions, a non-Federal entity must verify that entities are not suspended, debarred or otherwise excluded. This verification may be accomplished by checking the System for Award Management (SAM) website maintained by the General Services Administration. Condition: FCE did not have a documented procurement policy until January 2024. In addition, for all disbursements tested, FCE did not verify, prior to payment, that the vendors were not suspended, debarred or otherwise excluded. However, FCE provided documentation of the verification that occurred after the payments had been made and no exclusion issues were noted with the vendors. Cause: Prior to the implementation of a formal procurement policy in January 2024, FCE did not require that evidence of SAM checks be maintained in its vendor files. However, FCE performed a search after the payments had been made. In this way, FCE was able to verify that the vendors or individuals in our sample were not suspended, debarred or otherwise excluded.Effect or Potential Effect: FCE was not in compliance with the procurement policy and documentation requirements of the Uniform Guidance until January 2024. Questioned Costs: None. Repeat Finding: See Findings 2022-002 and 2022-003. Recommendation: FCE established internal controls in January 2024 to ensure proper documentation is maintained as evidence to support that it performed the required suspension and debarment searches on the SAM website.
Finding 2023-004: Procurement, Suspension, and Debarment (Significant Deficiency) Information on the Federal Programs: Both Major Programs Criteria or Specific Requirement: 2 CFR Section 200.318 requires that the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. In addition, 2 CFR Section 200.214 requires that, for covered transactions, a non-Federal entity must verify that entities are not suspended, debarred or otherwise excluded. This verification may be accomplished by checking the System for Award Management (SAM) website maintained by the General Services Administration. Condition: FCE did not have a documented procurement policy until January 2024. In addition, for all disbursements tested, FCE did not verify, prior to payment, that the vendors were not suspended, debarred or otherwise excluded. However, FCE provided documentation of the verification that occurred after the payments had been made and no exclusion issues were noted with the vendors. Cause: Prior to the implementation of a formal procurement policy in January 2024, FCE did not require that evidence of SAM checks be maintained in its vendor files. However, FCE performed a search after the payments had been made. In this way, FCE was able to verify that the vendors or individuals in our sample were not suspended, debarred or otherwise excluded.Effect or Potential Effect: FCE was not in compliance with the procurement policy and documentation requirements of the Uniform Guidance until January 2024. Questioned Costs: None. Repeat Finding: See Findings 2022-002 and 2022-003. Recommendation: FCE established internal controls in January 2024 to ensure proper documentation is maintained as evidence to support that it performed the required suspension and debarment searches on the SAM website.
2023-005 – Suspension and Debarment Federal agency: U.S. Department of Health and Human Services Federal program title: Health Centers Cluster Assistance Listing Number: 93.224/93.527 Pass-Through Agency: n/a Pass-Through Number(s): n/a Award Period: 9/1/23-8/31/25; 4/1/21-3/31/23; 6/1/19-5/31/23; 6/1/23-5/31/26; 12/1/22-5/31/23 Type of Finding: Material Noncompliance and Material Weakness in Internal Control over Compliance Criteria or Specific Requirement: § 200.214 Suspension and debarment. Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: The Organization could not provide documentation that vendor was verified as not being suspended or debarred prior to entering into the transaction. Questioned Costs: $48,472. Context: One of one vendor selected for testing suspension and debarment did not have documentation showing that suspension and debarment had been checked prior to entering into a contract. Cause: Management turnover. Effect: The Organization could enter into transactions using federal dollars with vendors that are suspended or debarred. Repeat Finding: Yes, 2022-005. Recommendation: We recommend that the Organization verify that vendors are not suspended or debarred prior to signing contracts or create an approved vendor list. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of the Treasury Federal Program Name: State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Period: 3/3/2021 – 12/31/2026 Compliance Requirement: Procurement – Suspension and Debarment Type of Finding: * Significant Deficiency in Internal Control over Compliance * Other Matters Criteria or Specific Requirement: 2 CFR Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: The City’s documentation of their search for suspension and debarment did not include the date the search was performed and therefore it was not possible to determine that the search was performed prior to the date of procurement. Questioned Costs: None Context: While performing audit procedures, it was noted that City management did not maintain documentation of the date that the search for suspension and debarment was performed and that it was prior to finalizing the procurement. Cause: The City did not have a procedure in place to require documentation be maintained that the search for suspension and department associated with procurement transactions in excess of the $25,000 threshold had been performed prior to procurement. Effect: Certain vendors could be used that are considered suspended or debarred by the federal government resulting in noncompliance. Repeat Finding: 2022-002 Recommendation: We recommend that the City review its policies over suspension and debarment review to ensure they are maintaining compliance and controls over verifying or contracting with vendors that are allowable. Views of Responsible Officials: There is no disagreement with the audit finding.
Criteria: The Corporation must maintain and adhere to documented procurement procedures that must conform to the procurement standards in 2 CFR Sections 200.317 through 200.327. These sections include policies and procedures related to competition, informal and formal procurement methods and noncompetitive procurement. Condition: We noted that there was a lack of evidence that policies and procedures were applied as required under the noted 2 CFR Sections in “Criteria”. Cause: The Corporation did not maintain formal documentation or evidence to support that a competitive price analysis for vendors or that suspension and debarment verifications were performed for vendors, as required by the general procurement standards of the Uniform Guidance. Effect or Potential Effect: We were unable to determine whether charges relating to vendor services or goods charged to the Federal programs are in accordance with 2 CFR Sections 200.317 through 200.327 or 200.214. Questioned costs: None Context: The Corporation was unable to provide evidence of procurement, suspension or debarment verification performed for walkthrough purposes or any samples that would be selected. Additionally, per management, no written documentation can be provided for any sole source procurements. Repeat finding: This is a repeat finding from prior year. This was reported as finding 2022-010 in the 2022 report. Recommendation: We recommend the Corporation establish formal internal controls, and documentation of their performance, relating procurement, required price analysis of vendors, and suspension and debarment verifications. View of Responsible Officials: Due to turnover of several key financial executives and personnel and lack of formal documentation of current policies and procedures, the Corporation was unable to provide evidence of procurement, suspension or debarment verification performed as of December 31, 2023.
Criteria: The Corporation must maintain and adhere to documented procurement procedures that must conform to the procurement standards in 2 CFR Sections 200.317 through 200.327. These sections include policies and procedures related to competition, informal and formal procurement methods and noncompetitive procurement. Condition: We noted that there was a lack of evidence that policies and procedures were applied as required under the noted 2 CFR Sections in “Criteria”. Cause: The Corporation did not maintain formal documentation or evidence to support that a competitive price analysis for vendors or that suspension and debarment verifications were performed for vendors, as required by the general procurement standards of the Uniform Guidance. Effect or Potential Effect: We were unable to determine whether charges relating to vendor services or goods charged to the Federal programs are in accordance with 2 CFR Sections 200.317 through 200.327 or 200.214. Questioned costs: None Context: The Corporation was unable to provide evidence of procurement, suspension or debarment verification performed for walkthrough purposes or any samples that would be selected. Additionally, per management, no written documentation can be provided for any sole source procurements. Repeat finding: This is a repeat finding from prior year. This was reported as finding 2022-010 in the 2022 report. Recommendation: We recommend the Corporation establish formal internal controls, and documentation of their performance, relating procurement, required price analysis of vendors, and suspension and debarment verifications. View of Responsible Officials: Due to turnover of several key financial executives and personnel and lack of formal documentation of current policies and procedures, the Corporation was unable to provide evidence of procurement, suspension or debarment verification performed as of December 31, 2023.
Criteria: The Corporation must maintain and adhere to documented procurement procedures that must conform to the procurement standards in 2 CFR Sections 200.317 through 200.327. These sections include policies and procedures related to competition, informal and formal procurement methods and noncompetitive procurement. Condition: We noted that there was a lack of evidence that policies and procedures were applied as required under the noted 2 CFR Sections in “Criteria”. Cause: The Corporation did not maintain formal documentation or evidence to support that a competitive price analysis for vendors or that suspension and debarment verifications were performed for vendors, as required by the general procurement standards of the Uniform Guidance. Effect or Potential Effect: We were unable to determine whether charges relating to vendor services or goods charged to the Federal programs are in accordance with 2 CFR Sections 200.317 through 200.327 or 200.214. Questioned costs: None Context: The Corporation was unable to provide evidence of procurement, suspension or debarment verification performed for walkthrough purposes or any samples that would be selected. Additionally, per management, no written documentation can be provided for any sole source procurements. Repeat finding: This is a repeat finding from prior year. This was reported as finding 2022-010 in the 2022 report. Recommendation: We recommend the Corporation establish formal internal controls, and documentation of their performance, relating procurement, required price analysis of vendors, and suspension and debarment verifications. View of Responsible Officials: Due to turnover of several key financial executives and personnel and lack of formal documentation of current policies and procedures, the Corporation was unable to provide evidence of procurement, suspension or debarment verification performed as of December 31, 2023.
Criteria: The Corporation must maintain and adhere to documented procurement procedures that must conform to the procurement standards in 2 CFR Sections 200.317 through 200.327. These sections include policies and procedures related to competition, informal and formal procurement methods and noncompetitive procurement. Condition: We noted that there was a lack of evidence that policies and procedures were applied as required under the noted 2 CFR Sections in “Criteria”. Cause: The Corporation did not maintain formal documentation or evidence to support that a competitive price analysis for vendors or that suspension and debarment verifications were performed for vendors, as required by the general procurement standards of the Uniform Guidance. Effect or Potential Effect: We were unable to determine whether charges relating to vendor services or goods charged to the Federal programs are in accordance with 2 CFR Sections 200.317 through 200.327 or 200.214. Questioned costs: None Context: The Corporation was unable to provide evidence of procurement, suspension or debarment verification performed for walkthrough purposes or any samples that would be selected. Additionally, per management, no written documentation can be provided for any sole source procurements. Repeat finding: This is a repeat finding from prior year. This was reported as finding 2022-010 in the 2022 report. Recommendation: We recommend the Corporation establish formal internal controls, and documentation of their performance, relating procurement, required price analysis of vendors, and suspension and debarment verifications. View of Responsible Officials: Due to turnover of several key financial executives and personnel and lack of formal documentation of current policies and procedures, the Corporation was unable to provide evidence of procurement, suspension or debarment verification performed as of December 31, 2023.
U.S. Department of Health and Human Services, passed through Kansas Department of Aging Aging Cluster - ALN 93.044 - Special Programs for the Aging_Title III, Part B_Grants for Supportive Services and Senior Centers - 2301KSOASS ALN 93.045 - Special Programs for the Aging _Title III, Part C_Nutrition Services - 2301KSOAHD Criteria or Specific Requirement: Suspension and Debarment and Significant Deficiency In accordance with 2 CFR 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR Section 180.215. Per 2 CFR 200.303, the non-Federal entities receiving federal awards (i.e., auditee management) establish and maintain internal control design to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: Suspension and debarment checks were not completed for the subrecipients that received federal funds. Questioned Costs: None noted. Context: Only one subreceipient received pass-through funding from the Unified Government. The single subrecipient under both ALN 93.044 and 93.045, receiving approximately $180,000, was not evaluated for suspension and debarment. It was noted after subsequent check, that the subrecipient was not suspended or debarred. Identification of Prior Year Finding: 2022-007 Effect: Federal funds could be paid to entities that are suspended or debarred. Cause: For the Unified Government, this is typically included in the contracts, but was not included in the subrecipient contracts for this program and the Unified Government did not have another means of validating suspension and debarment. Recommendation: Policies and procedures should be modified to ensure that suspension and debarment checks are performed on vendors and subrecipients alike prior to making purchases with federal funds. When newly established programs include subrecipients, we also recommend the contracts include suspension and debarment language. View of Responsible Official and Planned Corrective Actions: The reason for recurrence is the finding was communicated late in the prior year and due to transition and turnover within the department's staff. Procurement has begun the process of checking SAM.gov for debarment for potential suppliers. Also, departments have been informed of this required step for both suppliers and subrecipients. Downstream, need to evaluate if this language can be added to the contract templates.
U.S. Department of Health and Human Services, passed through Kansas Department of Aging Aging Cluster - ALN 93.044 - Special Programs for the Aging_Title III, Part B_Grants for Supportive Services and Senior Centers - 2301KSOASS ALN 93.045 - Special Programs for the Aging _Title III, Part C_Nutrition Services - 2301KSOAHD Criteria or Specific Requirement: Suspension and Debarment and Significant Deficiency In accordance with 2 CFR 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR Section 180.215. Per 2 CFR 200.303, the non-Federal entities receiving federal awards (i.e., auditee management) establish and maintain internal control design to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: Suspension and debarment checks were not completed for the subrecipients that received federal funds. Questioned Costs: None noted. Context: Only one subreceipient received pass-through funding from the Unified Government. The single subrecipient under both ALN 93.044 and 93.045, receiving approximately $180,000, was not evaluated for suspension and debarment. It was noted after subsequent check, that the subrecipient was not suspended or debarred. Identification of Prior Year Finding: 2022-007 Effect: Federal funds could be paid to entities that are suspended or debarred. Cause: For the Unified Government, this is typically included in the contracts, but was not included in the subrecipient contracts for this program and the Unified Government did not have another means of validating suspension and debarment. Recommendation: Policies and procedures should be modified to ensure that suspension and debarment checks are performed on vendors and subrecipients alike prior to making purchases with federal funds. When newly established programs include subrecipients, we also recommend the contracts include suspension and debarment language. View of Responsible Official and Planned Corrective Actions: The reason for recurrence is the finding was communicated late in the prior year and due to transition and turnover within the department's staff. Procurement has begun the process of checking SAM.gov for debarment for potential suppliers. Also, departments have been informed of this required step for both suppliers and subrecipients. Downstream, need to evaluate if this language can be added to the contract templates.
Information on the federal program – All federal programs Criteria or specific requirement – As stated in 2 CFR §200.303, the non-federal entity (i.e., the Center) must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations and terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR §200.214, the non-federal entity is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition – During the 2022 audit, the predecessor auditor noted several cases in which the Organization did not perform, or did not maintain proper support to demonstrate that it performed checks via SAM.gov to ensure that potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be excluded by the U.S. Government. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that suspension and debarment was being performed prior to entering into contracts with vendors or contractors/consultants. Effect or potential effect – The Organization is exposed to an increased risk that future noncompliance could occur by entering into transactions with vendors, contractors, or consultants that are suspended and debarred. Questioned costs – None Context – The Organization failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature. Identification as a repeat finding, if applicable – Is a repeat finding (2022-010) Recommendation – We recommend the Organization implement internal controls to ensure that all vendors, contractors, and consultants are screened for suspension and debarment prior to entering into any executed contract. We further recommend that a policy be formalized and implemented that requires an annual screening of any current vendors, contractors, or consultants as well. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
Information on the federal program – All federal programs Criteria or specific requirement – As stated in 2 CFR §200.303, the non-federal entity (i.e., the Center) must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations and terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR §200.214, the non-federal entity is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition – During the 2022 audit, the predecessor auditor noted several cases in which the Organization did not perform, or did not maintain proper support to demonstrate that it performed checks via SAM.gov to ensure that potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be excluded by the U.S. Government. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that suspension and debarment was being performed prior to entering into contracts with vendors or contractors/consultants. Effect or potential effect – The Organization is exposed to an increased risk that future noncompliance could occur by entering into transactions with vendors, contractors, or consultants that are suspended and debarred. Questioned costs – None Context – The Organization failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature. Identification as a repeat finding, if applicable – Is a repeat finding (2022-010) Recommendation – We recommend the Organization implement internal controls to ensure that all vendors, contractors, and consultants are screened for suspension and debarment prior to entering into any executed contract. We further recommend that a policy be formalized and implemented that requires an annual screening of any current vendors, contractors, or consultants as well. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
Information on the federal program – All federal programs Criteria or specific requirement – As stated in 2 CFR §200.303, the non-federal entity (i.e., the Center) must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations and terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR §200.214, the non-federal entity is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition – During the 2022 audit, the predecessor auditor noted several cases in which the Organization did not perform, or did not maintain proper support to demonstrate that it performed checks via SAM.gov to ensure that potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be excluded by the U.S. Government. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that suspension and debarment was being performed prior to entering into contracts with vendors or contractors/consultants. Effect or potential effect – The Organization is exposed to an increased risk that future noncompliance could occur by entering into transactions with vendors, contractors, or consultants that are suspended and debarred. Questioned costs – None Context – The Organization failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature. Identification as a repeat finding, if applicable – Is a repeat finding (2022-010) Recommendation – We recommend the Organization implement internal controls to ensure that all vendors, contractors, and consultants are screened for suspension and debarment prior to entering into any executed contract. We further recommend that a policy be formalized and implemented that requires an annual screening of any current vendors, contractors, or consultants as well. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
Information on the federal program – All federal programs Criteria or specific requirement – As stated in 2 CFR §200.303, the non-federal entity (i.e., the Center) must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations and terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR §200.214, the non-federal entity is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition – During the 2022 audit, the predecessor auditor noted several cases in which the Organization did not perform, or did not maintain proper support to demonstrate that it performed checks via SAM.gov to ensure that potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be excluded by the U.S. Government. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that suspension and debarment was being performed prior to entering into contracts with vendors or contractors/consultants. Effect or potential effect – The Organization is exposed to an increased risk that future noncompliance could occur by entering into transactions with vendors, contractors, or consultants that are suspended and debarred. Questioned costs – None Context – The Organization failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature. Identification as a repeat finding, if applicable – Is a repeat finding (2022-010) Recommendation – We recommend the Organization implement internal controls to ensure that all vendors, contractors, and consultants are screened for suspension and debarment prior to entering into any executed contract. We further recommend that a policy be formalized and implemented that requires an annual screening of any current vendors, contractors, or consultants as well. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
Information on the federal program – All federal programs Criteria or specific requirement – As stated in 2 CFR §200.303, the non-federal entity (i.e., the Center) must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations and terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR §200.214, the non-federal entity is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition – During the 2022 audit, the predecessor auditor noted several cases in which the Organization did not perform, or did not maintain proper support to demonstrate that it performed checks via SAM.gov to ensure that potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be excluded by the U.S. Government. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that suspension and debarment was being performed prior to entering into contracts with vendors or contractors/consultants. Effect or potential effect – The Organization is exposed to an increased risk that future noncompliance could occur by entering into transactions with vendors, contractors, or consultants that are suspended and debarred. Questioned costs – None Context – The Organization failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature. Identification as a repeat finding, if applicable – Is a repeat finding (2022-010) Recommendation – We recommend the Organization implement internal controls to ensure that all vendors, contractors, and consultants are screened for suspension and debarment prior to entering into any executed contract. We further recommend that a policy be formalized and implemented that requires an annual screening of any current vendors, contractors, or consultants as well. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
Information on the federal program – All federal programs Criteria or specific requirement – As stated in 2 CFR §200.303, the non-federal entity (i.e., the Center) must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations and terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR §200.214, the non-federal entity is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition – During the 2022 audit, the predecessor auditor noted several cases in which the Organization did not perform, or did not maintain proper support to demonstrate that it performed checks via SAM.gov to ensure that potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be excluded by the U.S. Government. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that suspension and debarment was being performed prior to entering into contracts with vendors or contractors/consultants. Effect or potential effect – The Organization is exposed to an increased risk that future noncompliance could occur by entering into transactions with vendors, contractors, or consultants that are suspended and debarred. Questioned costs – None Context – The Organization failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature. Identification as a repeat finding, if applicable – Is a repeat finding (2022-010) Recommendation – We recommend the Organization implement internal controls to ensure that all vendors, contractors, and consultants are screened for suspension and debarment prior to entering into any executed contract. We further recommend that a policy be formalized and implemented that requires an annual screening of any current vendors, contractors, or consultants as well. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
Information on the federal program – All federal programs Criteria or specific requirement – As stated in 2 CFR §200.303, the non-federal entity (i.e., the Center) must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations and terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR §200.214, the non-federal entity is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition – During the 2022 audit, the predecessor auditor noted several cases in which the Organization did not perform, or did not maintain proper support to demonstrate that it performed checks via SAM.gov to ensure that potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be excluded by the U.S. Government. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that suspension and debarment was being performed prior to entering into contracts with vendors or contractors/consultants. Effect or potential effect – The Organization is exposed to an increased risk that future noncompliance could occur by entering into transactions with vendors, contractors, or consultants that are suspended and debarred. Questioned costs – None Context – The Organization failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature. Identification as a repeat finding, if applicable – Is a repeat finding (2022-010) Recommendation – We recommend the Organization implement internal controls to ensure that all vendors, contractors, and consultants are screened for suspension and debarment prior to entering into any executed contract. We further recommend that a policy be formalized and implemented that requires an annual screening of any current vendors, contractors, or consultants as well. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
Information on the federal program – All federal programs Criteria or specific requirement – As stated in 2 CFR §200.303, the non-federal entity (i.e., the Center) must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations and terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR §200.214, the non-federal entity is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition – During the 2022 audit, the predecessor auditor noted several cases in which the Organization did not perform, or did not maintain proper support to demonstrate that it performed checks via SAM.gov to ensure that potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be excluded by the U.S. Government. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that suspension and debarment was being performed prior to entering into contracts with vendors or contractors/consultants. Effect or potential effect – The Organization is exposed to an increased risk that future noncompliance could occur by entering into transactions with vendors, contractors, or consultants that are suspended and debarred. Questioned costs – None Context – The Organization failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature. Identification as a repeat finding, if applicable – Is a repeat finding (2022-010) Recommendation – We recommend the Organization implement internal controls to ensure that all vendors, contractors, and consultants are screened for suspension and debarment prior to entering into any executed contract. We further recommend that a policy be formalized and implemented that requires an annual screening of any current vendors, contractors, or consultants as well. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
AL number: 10.561 AL title: Supplemental Nutrition Assistance Program Award term: October 29, 2021 through September 30, 2024 Name of federal agency: U.S. Department of Agriculture Name of pass-through entity: Colorado Department of Human Services Repeat finding: Yes - 2022-002 & 2022-003 Criteria: The Code of Federal Regulations 2 CFR 200.3 l 8(a) states, "the non- Federal entity must have and use document procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward." In addition, per the Code of Federal Regulations 2 CFR 200.214, non- Federal entities are subject to the non-procurement debarment and suspension regulations. The regulations restrict awards, subawards, and contracts with certain- parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: During our testing, we noted the Organization had not adopted a procurement policy and no procurement procedures were performed in selecting contractors. Cause: Procurement policies and procedures were not adopted by the Organization. Possible effect: The Organization may not have received a competitive bid for services, and may have engaged a suspended or debarred contractor. Questioned cost: None Recommendation: We recommend the Organization implement necessary internal controls to ensure a competitive bid process is performed and all vendors are reviewed for suspension and debarment, prior to entering into contracts utilizing federal awards. These internal controls should also include a conflict-of- interest clause with all vendors within contract language. Views of responsible officials: Management recruited a procurement officer in December 2024 to design and implement best practice procurement processes effective the first quarter 2025. Procurement policies will ensure full compliance with Federal and State requirements. Procurement policies will incorporate clearly defined procedures around all contractors ensuring appropriate selection processes and contractual terms. Anticipated completion date: March 31, 2025.
FINDING 2023-003 Subject: COVID-19 - State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): 2023 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Suspension and Debarment Prior to entering into subawards and covered transactions with the COVID-19 - State and Local Fiscal Recovery Funds (SLFRF) award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. The City did not have any policies or procedures in place related to the SLFRF suspension and debarment requirements. A population of four covered transactions totaling $1,301,367 that equaled or exceeded $25,000 paid from SLFRF funds were identified. All four covered transactions were selected for testing. For each of the four transactions, the City did not verify the vendors' suspension or debarment status prior to payment due to the City not having any policies or procedures in place to verify that contractors were neither suspended nor debarred or otherwise excluded or disqualified from participating in federal assistance programs or activities. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.214 states: "Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause The City did not implement its Corrective Action Plan from 2021 and was unable to provide documentation to demonstrate it had policies or procedures in place to verify suspension and debarment status for covered transactions it intends to pay with federal funds. The City was unable to provide documentation to demonstrate they had properly verified that contractors were neither suspended nor debarred or otherwise excluded or disqualified from participating in federal assistance programs or activities. Effect Without the proper implementation of an effectively designed system of internal controls, the City cannot ensure that contractors paid with federal funds are eligible to participate in federal programs. Any program funds the City used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Questioned Costs There were no questioned costs identified. Recommendation We recommend that management of the City design and implement a system of internal controls to ensure that all contractors that are paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before entering into contracts. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Information on Federal Programs: 93.083 – Centers for Disease Control and Prevention: Prevention of Disease, Disability, and Death through Immunization & Control of Respiratory & Related Diseases. Criteria or Specific Requirements: According to 2 CFR §200.303, the non-Federal entity must: establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Integrated Framework, issued by COSO. Additionally, according to 2 CFR §200.214, the non-Federal entity is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: During our audit, we noted that ATS did not perform checks via SAM.gov to ensure that potential contractors or consultants were not suspended or debarred. Cause: Management did not have internal control procedures in place to ensure that suspension and debarment checks were being performed prior to entering into contracts with contractors and consultants. Effect: The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be suspended or disbarred by the U.S. Government. Perspective: ATS established a new process where a debarment certification representation paragraph is automatically included on all the contractor agreements. ATS also issued contract modifications which included the debarment certification for all contracts signed prior to the change. Within a random sample of 24 disbursements, 17 disbursements to 3 contractors would have required compliance with the suspension and debarment check. Questioned Costs: Questioned costs were not identified. Repeat Finding: Not applicable. Recommendation: ATS should continue including the debarment certification paragraph on all new contracts to ensure compliance with the Uniform Guidance going forward.
Procurement, Suspension and Debarment Identification of the federal program: Federal Agencies: U.S. Department of Health and Human Services and U.S. Department of Defense Federal Cluster: Research and Development (R&D) Pass-Through Entity: The University of Texas Health (93.853, NS119834) Assistance Listing Nos.: 12.420, 93.310, 93.353, 93.393, and 93.853 Award Numbers: W81XWH-15-1-0292 (12.420), OD23121 (93.310), CA246568 (93.353), CA259201 (93.393), NS119834 (93.853), NS122096 (93.853) Award Periods: Various Criteria or specific requirement (including statutory, regulatory or other citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: “The Non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Section 200.320(a)(2)(i) of the Uniform Guidance states the following regarding small purchases: “The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.” Section 200.320(b) of the Uniform Guidance states the following regarding formal procurement methods to be followed: “When the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold (SAT), or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section.” Section 200.214 of the Uniform Guidance states “Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities.” The Clinic procurement justification form for procurements more than $25,000 requires completion of the rationale for the procurement and a search of the federal government’s exclusion list to be performed and documented at the time of the procurement. On a monthly basis, Supply Chain Management performs a review of completed procurement justification forms related to procurements > $25,000 to ensure they are documented in accordance with the Clinic’s procurement, suspension and debarment policies and procedures. Condition: Internal Control For five (56%) of nine procurement transactions tested for operating effectiveness of internal controls, the procurement justification form used by the Clinic to document the history of the procurement and compliance with Uniform Guidance CFR 200.303, was not completed until after the purchase order was created and/or invoice received from the vendor. In addition, for these same five procurement transactions, the Clinic did not timely document its suspension and debarment check at the time of procurement as required by its procurement justification form. In addition, for four (44%) of nine procurement transactions tested for operating effectiveness of internal controls (two of which relate to the five cited above), the procurement justification form used by the Clinic to document the procurement transaction’s compliance with policies, procedures and the Uniform Guidance was outdated. Furthermore, the monthly review of completed procurement justification forms related to procurements > $25,000 to ensure they are documented in accordance with the Clinic’s procurement, suspension and debarment policies and procedures was not operating effectively. Compliance For one (9%) of 11 procurement transactions tested for compliance, the procurement was an add-on purchase related to a larger procurement of the same product under a prior purchase order. The prior procurement was above the simplified acquisition threshold and the Clinic’s competitive bid threshold. The Clinic did not complete a procurement justification form for the add-on purchase (which was a small purchase), and the original procurement did not have adequate support to evidence that it had been competitively bid. As such, adequate documentation did not exist for the procurement in accordance with Uniform Guidance Section 230.320(a)(2)(i) and(b). In addition, for five procurement transactions, the Clinic did not follow its suspension and debarment procedures as required by its procurement justification form. Cause: While management has internal controls in place to review procurements > $25,000 to ensure they are documented in accordance with the Clinic’s procurement, suspension and debarment policies and procedures and Uniform Guidance CFR 200.320, the review of the procurement justification form is not robust enough to identify errors and there is not a process in place to ensure the form is completed prior to the purchase. Effect or potential effect: The Clinic’s internal controls over procurement were not properly followed during the fiscal year. In addition, the Clinic did not follow the Uniform Guidance requirements related to small purchases and noncompetitive procurements. Questioned costs: $53,482, determined as the amount of the procurement expenditures included in the schedule of expenditures of federal awards for the year ended December 31, 2023, for the one procurement transaction that had inadequate support for compliance with CFR 200.320 at the time of procurement, as follows: • Assistance Listing No. 93.310, OD023121 – $53,482 Context: Internal Control We sampled nine federal procurements over $25,000 to test operating effectiveness of internal controls, totaling $962,393, from a population of 74 federal procurements over $25,000, totaling $5,400,242 and noted the following: • For seven of the 11 federal procurements tested totaling $770,093, procurement controls were not operating effectively. • For five of 11 procurement transactions tested totaling $529,273, the independent suspension and debarment check to be performed at the time of procurement was not performed until approximately two to eight months later. Compliance We sampled 11 federal procurements over $25,000 to test compliance, totaling $1,736,844, from a population of 74 federal procurements over $25,000, totaling $5,400,242 and noted the following: • For one of 11 federal procurements tested totaling $53,482, documentation retained was not adequate to support that the procurement transaction was executed in accordance with the Uniform Guidance Sections 200.320(a)(2)(i) and (b). • For five of 11 procurement transactions tested totaling $529,273, the Clinic did not follow its suspension and debarment procedures as required by its procurement justification form. Procurement-related expenditures are approximately 9% of total Federal expenditures for the R&D Cluster of $445,961,340 for the year ended December 31, 2023. Identification as a repeat finding, if applicable: The finding is not a repeat of the finding of the prior year. Recommendation: The Clinic should ensure that all R&D awards that require procurement of goods and services follow established policies, procedures, and internal controls to comply with the Uniform Guidance procurement standards and that the procurement justification form is reviewed prior to entering into the purchase transaction. The Clinic should ensure that independent checks for suspension and debarment should be timely completed at the time of procurement in accordance with the Clinic documented policies, procedures, and internal controls. Views of responsible officials: Management will reinforce education and training to the research community and procurement teams regarding the procurement requirements, Justification of Source Selection Checklist/Form, and timely completion of the required documentation. The Clinic utilizes a third party, Visual Compliance, to execute daily supplier sanction and debarment checks for all Mayo Clinic vendors. All third party suspension and debarment match alerts are reviewed and adjudicated as needed. Going forward, the Clinic will supplement this daily review by periodically validating a sample of vendors who are not flagged with an alert by Visual Compliance.
Procurement, Suspension and Debarment Identification of the federal program: Federal Agencies: U.S. Department of Health and Human Services and U.S. Department of Defense Federal Cluster: Research and Development (R&D) Pass-Through Entity: The University of Texas Health (93.853, NS119834) Assistance Listing Nos.: 12.420, 93.310, 93.353, 93.393, and 93.853 Award Numbers: W81XWH-15-1-0292 (12.420), OD23121 (93.310), CA246568 (93.353), CA259201 (93.393), NS119834 (93.853), NS122096 (93.853) Award Periods: Various Criteria or specific requirement (including statutory, regulatory or other citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: “The Non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Section 200.320(a)(2)(i) of the Uniform Guidance states the following regarding small purchases: “The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.” Section 200.320(b) of the Uniform Guidance states the following regarding formal procurement methods to be followed: “When the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold (SAT), or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section.” Section 200.214 of the Uniform Guidance states “Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities.” The Clinic procurement justification form for procurements more than $25,000 requires completion of the rationale for the procurement and a search of the federal government’s exclusion list to be performed and documented at the time of the procurement. On a monthly basis, Supply Chain Management performs a review of completed procurement justification forms related to procurements > $25,000 to ensure they are documented in accordance with the Clinic’s procurement, suspension and debarment policies and procedures. Condition: Internal Control For five (56%) of nine procurement transactions tested for operating effectiveness of internal controls, the procurement justification form used by the Clinic to document the history of the procurement and compliance with Uniform Guidance CFR 200.303, was not completed until after the purchase order was created and/or invoice received from the vendor. In addition, for these same five procurement transactions, the Clinic did not timely document its suspension and debarment check at the time of procurement as required by its procurement justification form. In addition, for four (44%) of nine procurement transactions tested for operating effectiveness of internal controls (two of which relate to the five cited above), the procurement justification form used by the Clinic to document the procurement transaction’s compliance with policies, procedures and the Uniform Guidance was outdated. Furthermore, the monthly review of completed procurement justification forms related to procurements > $25,000 to ensure they are documented in accordance with the Clinic’s procurement, suspension and debarment policies and procedures was not operating effectively. Compliance For one (9%) of 11 procurement transactions tested for compliance, the procurement was an add-on purchase related to a larger procurement of the same product under a prior purchase order. The prior procurement was above the simplified acquisition threshold and the Clinic’s competitive bid threshold. The Clinic did not complete a procurement justification form for the add-on purchase (which was a small purchase), and the original procurement did not have adequate support to evidence that it had been competitively bid. As such, adequate documentation did not exist for the procurement in accordance with Uniform Guidance Section 230.320(a)(2)(i) and(b). In addition, for five procurement transactions, the Clinic did not follow its suspension and debarment procedures as required by its procurement justification form. Cause: While management has internal controls in place to review procurements > $25,000 to ensure they are documented in accordance with the Clinic’s procurement, suspension and debarment policies and procedures and Uniform Guidance CFR 200.320, the review of the procurement justification form is not robust enough to identify errors and there is not a process in place to ensure the form is completed prior to the purchase. Effect or potential effect: The Clinic’s internal controls over procurement were not properly followed during the fiscal year. In addition, the Clinic did not follow the Uniform Guidance requirements related to small purchases and noncompetitive procurements. Questioned costs: $53,482, determined as the amount of the procurement expenditures included in the schedule of expenditures of federal awards for the year ended December 31, 2023, for the one procurement transaction that had inadequate support for compliance with CFR 200.320 at the time of procurement, as follows: • Assistance Listing No. 93.310, OD023121 – $53,482 Context: Internal Control We sampled nine federal procurements over $25,000 to test operating effectiveness of internal controls, totaling $962,393, from a population of 74 federal procurements over $25,000, totaling $5,400,242 and noted the following: • For seven of the 11 federal procurements tested totaling $770,093, procurement controls were not operating effectively. • For five of 11 procurement transactions tested totaling $529,273, the independent suspension and debarment check to be performed at the time of procurement was not performed until approximately two to eight months later. Compliance We sampled 11 federal procurements over $25,000 to test compliance, totaling $1,736,844, from a population of 74 federal procurements over $25,000, totaling $5,400,242 and noted the following: • For one of 11 federal procurements tested totaling $53,482, documentation retained was not adequate to support that the procurement transaction was executed in accordance with the Uniform Guidance Sections 200.320(a)(2)(i) and (b). • For five of 11 procurement transactions tested totaling $529,273, the Clinic did not follow its suspension and debarment procedures as required by its procurement justification form. Procurement-related expenditures are approximately 9% of total Federal expenditures for the R&D Cluster of $445,961,340 for the year ended December 31, 2023. Identification as a repeat finding, if applicable: The finding is not a repeat of the finding of the prior year. Recommendation: The Clinic should ensure that all R&D awards that require procurement of goods and services follow established policies, procedures, and internal controls to comply with the Uniform Guidance procurement standards and that the procurement justification form is reviewed prior to entering into the purchase transaction. The Clinic should ensure that independent checks for suspension and debarment should be timely completed at the time of procurement in accordance with the Clinic documented policies, procedures, and internal controls. Views of responsible officials: Management will reinforce education and training to the research community and procurement teams regarding the procurement requirements, Justification of Source Selection Checklist/Form, and timely completion of the required documentation. The Clinic utilizes a third party, Visual Compliance, to execute daily supplier sanction and debarment checks for all Mayo Clinic vendors. All third party suspension and debarment match alerts are reviewed and adjudicated as needed. Going forward, the Clinic will supplement this daily review by periodically validating a sample of vendors who are not flagged with an alert by Visual Compliance.
Procurement, Suspension and Debarment Identification of the federal program: Federal Agencies: U.S. Department of Health and Human Services and U.S. Department of Defense Federal Cluster: Research and Development (R&D) Pass-Through Entity: The University of Texas Health (93.853, NS119834) Assistance Listing Nos.: 12.420, 93.310, 93.353, 93.393, and 93.853 Award Numbers: W81XWH-15-1-0292 (12.420), OD23121 (93.310), CA246568 (93.353), CA259201 (93.393), NS119834 (93.853), NS122096 (93.853) Award Periods: Various Criteria or specific requirement (including statutory, regulatory or other citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: “The Non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Section 200.320(a)(2)(i) of the Uniform Guidance states the following regarding small purchases: “The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.” Section 200.320(b) of the Uniform Guidance states the following regarding formal procurement methods to be followed: “When the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold (SAT), or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section.” Section 200.214 of the Uniform Guidance states “Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities.” The Clinic procurement justification form for procurements more than $25,000 requires completion of the rationale for the procurement and a search of the federal government’s exclusion list to be performed and documented at the time of the procurement. On a monthly basis, Supply Chain Management performs a review of completed procurement justification forms related to procurements > $25,000 to ensure they are documented in accordance with the Clinic’s procurement, suspension and debarment policies and procedures. Condition: Internal Control For five (56%) of nine procurement transactions tested for operating effectiveness of internal controls, the procurement justification form used by the Clinic to document the history of the procurement and compliance with Uniform Guidance CFR 200.303, was not completed until after the purchase order was created and/or invoice received from the vendor. In addition, for these same five procurement transactions, the Clinic did not timely document its suspension and debarment check at the time of procurement as required by its procurement justification form. In addition, for four (44%) of nine procurement transactions tested for operating effectiveness of internal controls (two of which relate to the five cited above), the procurement justification form used by the Clinic to document the procurement transaction’s compliance with policies, procedures and the Uniform Guidance was outdated. Furthermore, the monthly review of completed procurement justification forms related to procurements > $25,000 to ensure they are documented in accordance with the Clinic’s procurement, suspension and debarment policies and procedures was not operating effectively. Compliance For one (9%) of 11 procurement transactions tested for compliance, the procurement was an add-on purchase related to a larger procurement of the same product under a prior purchase order. The prior procurement was above the simplified acquisition threshold and the Clinic’s competitive bid threshold. The Clinic did not complete a procurement justification form for the add-on purchase (which was a small purchase), and the original procurement did not have adequate support to evidence that it had been competitively bid. As such, adequate documentation did not exist for the procurement in accordance with Uniform Guidance Section 230.320(a)(2)(i) and(b). In addition, for five procurement transactions, the Clinic did not follow its suspension and debarment procedures as required by its procurement justification form. Cause: While management has internal controls in place to review procurements > $25,000 to ensure they are documented in accordance with the Clinic’s procurement, suspension and debarment policies and procedures and Uniform Guidance CFR 200.320, the review of the procurement justification form is not robust enough to identify errors and there is not a process in place to ensure the form is completed prior to the purchase. Effect or potential effect: The Clinic’s internal controls over procurement were not properly followed during the fiscal year. In addition, the Clinic did not follow the Uniform Guidance requirements related to small purchases and noncompetitive procurements. Questioned costs: $53,482, determined as the amount of the procurement expenditures included in the schedule of expenditures of federal awards for the year ended December 31, 2023, for the one procurement transaction that had inadequate support for compliance with CFR 200.320 at the time of procurement, as follows: • Assistance Listing No. 93.310, OD023121 – $53,482 Context: Internal Control We sampled nine federal procurements over $25,000 to test operating effectiveness of internal controls, totaling $962,393, from a population of 74 federal procurements over $25,000, totaling $5,400,242 and noted the following: • For seven of the 11 federal procurements tested totaling $770,093, procurement controls were not operating effectively. • For five of 11 procurement transactions tested totaling $529,273, the independent suspension and debarment check to be performed at the time of procurement was not performed until approximately two to eight months later. Compliance We sampled 11 federal procurements over $25,000 to test compliance, totaling $1,736,844, from a population of 74 federal procurements over $25,000, totaling $5,400,242 and noted the following: • For one of 11 federal procurements tested totaling $53,482, documentation retained was not adequate to support that the procurement transaction was executed in accordance with the Uniform Guidance Sections 200.320(a)(2)(i) and (b). • For five of 11 procurement transactions tested totaling $529,273, the Clinic did not follow its suspension and debarment procedures as required by its procurement justification form. Procurement-related expenditures are approximately 9% of total Federal expenditures for the R&D Cluster of $445,961,340 for the year ended December 31, 2023. Identification as a repeat finding, if applicable: The finding is not a repeat of the finding of the prior year. Recommendation: The Clinic should ensure that all R&D awards that require procurement of goods and services follow established policies, procedures, and internal controls to comply with the Uniform Guidance procurement standards and that the procurement justification form is reviewed prior to entering into the purchase transaction. The Clinic should ensure that independent checks for suspension and debarment should be timely completed at the time of procurement in accordance with the Clinic documented policies, procedures, and internal controls. Views of responsible officials: Management will reinforce education and training to the research community and procurement teams regarding the procurement requirements, Justification of Source Selection Checklist/Form, and timely completion of the required documentation. The Clinic utilizes a third party, Visual Compliance, to execute daily supplier sanction and debarment checks for all Mayo Clinic vendors. All third party suspension and debarment match alerts are reviewed and adjudicated as needed. Going forward, the Clinic will supplement this daily review by periodically validating a sample of vendors who are not flagged with an alert by Visual Compliance.
Procurement, Suspension and Debarment Identification of the federal program: Federal Agencies: U.S. Department of Health and Human Services and U.S. Department of Defense Federal Cluster: Research and Development (R&D) Pass-Through Entity: The University of Texas Health (93.853, NS119834) Assistance Listing Nos.: 12.420, 93.310, 93.353, 93.393, and 93.853 Award Numbers: W81XWH-15-1-0292 (12.420), OD23121 (93.310), CA246568 (93.353), CA259201 (93.393), NS119834 (93.853), NS122096 (93.853) Award Periods: Various Criteria or specific requirement (including statutory, regulatory or other citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: “The Non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Section 200.320(a)(2)(i) of the Uniform Guidance states the following regarding small purchases: “The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.” Section 200.320(b) of the Uniform Guidance states the following regarding formal procurement methods to be followed: “When the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold (SAT), or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section.” Section 200.214 of the Uniform Guidance states “Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities.” The Clinic procurement justification form for procurements more than $25,000 requires completion of the rationale for the procurement and a search of the federal government’s exclusion list to be performed and documented at the time of the procurement. On a monthly basis, Supply Chain Management performs a review of completed procurement justification forms related to procurements > $25,000 to ensure they are documented in accordance with the Clinic’s procurement, suspension and debarment policies and procedures. Condition: Internal Control For five (56%) of nine procurement transactions tested for operating effectiveness of internal controls, the procurement justification form used by the Clinic to document the history of the procurement and compliance with Uniform Guidance CFR 200.303, was not completed until after the purchase order was created and/or invoice received from the vendor. In addition, for these same five procurement transactions, the Clinic did not timely document its suspension and debarment check at the time of procurement as required by its procurement justification form. In addition, for four (44%) of nine procurement transactions tested for operating effectiveness of internal controls (two of which relate to the five cited above), the procurement justification form used by the Clinic to document the procurement transaction’s compliance with policies, procedures and the Uniform Guidance was outdated. Furthermore, the monthly review of completed procurement justification forms related to procurements > $25,000 to ensure they are documented in accordance with the Clinic’s procurement, suspension and debarment policies and procedures was not operating effectively. Compliance For one (9%) of 11 procurement transactions tested for compliance, the procurement was an add-on purchase related to a larger procurement of the same product under a prior purchase order. The prior procurement was above the simplified acquisition threshold and the Clinic’s competitive bid threshold. The Clinic did not complete a procurement justification form for the add-on purchase (which was a small purchase), and the original procurement did not have adequate support to evidence that it had been competitively bid. As such, adequate documentation did not exist for the procurement in accordance with Uniform Guidance Section 230.320(a)(2)(i) and(b). In addition, for five procurement transactions, the Clinic did not follow its suspension and debarment procedures as required by its procurement justification form. Cause: While management has internal controls in place to review procurements > $25,000 to ensure they are documented in accordance with the Clinic’s procurement, suspension and debarment policies and procedures and Uniform Guidance CFR 200.320, the review of the procurement justification form is not robust enough to identify errors and there is not a process in place to ensure the form is completed prior to the purchase. Effect or potential effect: The Clinic’s internal controls over procurement were not properly followed during the fiscal year. In addition, the Clinic did not follow the Uniform Guidance requirements related to small purchases and noncompetitive procurements. Questioned costs: $53,482, determined as the amount of the procurement expenditures included in the schedule of expenditures of federal awards for the year ended December 31, 2023, for the one procurement transaction that had inadequate support for compliance with CFR 200.320 at the time of procurement, as follows: • Assistance Listing No. 93.310, OD023121 – $53,482 Context: Internal Control We sampled nine federal procurements over $25,000 to test operating effectiveness of internal controls, totaling $962,393, from a population of 74 federal procurements over $25,000, totaling $5,400,242 and noted the following: • For seven of the 11 federal procurements tested totaling $770,093, procurement controls were not operating effectively. • For five of 11 procurement transactions tested totaling $529,273, the independent suspension and debarment check to be performed at the time of procurement was not performed until approximately two to eight months later. Compliance We sampled 11 federal procurements over $25,000 to test compliance, totaling $1,736,844, from a population of 74 federal procurements over $25,000, totaling $5,400,242 and noted the following: • For one of 11 federal procurements tested totaling $53,482, documentation retained was not adequate to support that the procurement transaction was executed in accordance with the Uniform Guidance Sections 200.320(a)(2)(i) and (b). • For five of 11 procurement transactions tested totaling $529,273, the Clinic did not follow its suspension and debarment procedures as required by its procurement justification form. Procurement-related expenditures are approximately 9% of total Federal expenditures for the R&D Cluster of $445,961,340 for the year ended December 31, 2023. Identification as a repeat finding, if applicable: The finding is not a repeat of the finding of the prior year. Recommendation: The Clinic should ensure that all R&D awards that require procurement of goods and services follow established policies, procedures, and internal controls to comply with the Uniform Guidance procurement standards and that the procurement justification form is reviewed prior to entering into the purchase transaction. The Clinic should ensure that independent checks for suspension and debarment should be timely completed at the time of procurement in accordance with the Clinic documented policies, procedures, and internal controls. Views of responsible officials: Management will reinforce education and training to the research community and procurement teams regarding the procurement requirements, Justification of Source Selection Checklist/Form, and timely completion of the required documentation. The Clinic utilizes a third party, Visual Compliance, to execute daily supplier sanction and debarment checks for all Mayo Clinic vendors. All third party suspension and debarment match alerts are reviewed and adjudicated as needed. Going forward, the Clinic will supplement this daily review by periodically validating a sample of vendors who are not flagged with an alert by Visual Compliance.
Procurement, Suspension and Debarment Identification of the federal program: Federal Agencies: U.S. Department of Health and Human Services and U.S. Department of Defense Federal Cluster: Research and Development (R&D) Pass-Through Entity: The University of Texas Health (93.853, NS119834) Assistance Listing Nos.: 12.420, 93.310, 93.353, 93.393, and 93.853 Award Numbers: W81XWH-15-1-0292 (12.420), OD23121 (93.310), CA246568 (93.353), CA259201 (93.393), NS119834 (93.853), NS122096 (93.853) Award Periods: Various Criteria or specific requirement (including statutory, regulatory or other citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: “The Non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Section 200.320(a)(2)(i) of the Uniform Guidance states the following regarding small purchases: “The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.” Section 200.320(b) of the Uniform Guidance states the following regarding formal procurement methods to be followed: “When the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold (SAT), or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section.” Section 200.214 of the Uniform Guidance states “Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities.” The Clinic procurement justification form for procurements more than $25,000 requires completion of the rationale for the procurement and a search of the federal government’s exclusion list to be performed and documented at the time of the procurement. On a monthly basis, Supply Chain Management performs a review of completed procurement justification forms related to procurements > $25,000 to ensure they are documented in accordance with the Clinic’s procurement, suspension and debarment policies and procedures. Condition: Internal Control For five (56%) of nine procurement transactions tested for operating effectiveness of internal controls, the procurement justification form used by the Clinic to document the history of the procurement and compliance with Uniform Guidance CFR 200.303, was not completed until after the purchase order was created and/or invoice received from the vendor. In addition, for these same five procurement transactions, the Clinic did not timely document its suspension and debarment check at the time of procurement as required by its procurement justification form. In addition, for four (44%) of nine procurement transactions tested for operating effectiveness of internal controls (two of which relate to the five cited above), the procurement justification form used by the Clinic to document the procurement transaction’s compliance with policies, procedures and the Uniform Guidance was outdated. Furthermore, the monthly review of completed procurement justification forms related to procurements > $25,000 to ensure they are documented in accordance with the Clinic’s procurement, suspension and debarment policies and procedures was not operating effectively. Compliance For one (9%) of 11 procurement transactions tested for compliance, the procurement was an add-on purchase related to a larger procurement of the same product under a prior purchase order. The prior procurement was above the simplified acquisition threshold and the Clinic’s competitive bid threshold. The Clinic did not complete a procurement justification form for the add-on purchase (which was a small purchase), and the original procurement did not have adequate support to evidence that it had been competitively bid. As such, adequate documentation did not exist for the procurement in accordance with Uniform Guidance Section 230.320(a)(2)(i) and(b). In addition, for five procurement transactions, the Clinic did not follow its suspension and debarment procedures as required by its procurement justification form. Cause: While management has internal controls in place to review procurements > $25,000 to ensure they are documented in accordance with the Clinic’s procurement, suspension and debarment policies and procedures and Uniform Guidance CFR 200.320, the review of the procurement justification form is not robust enough to identify errors and there is not a process in place to ensure the form is completed prior to the purchase. Effect or potential effect: The Clinic’s internal controls over procurement were not properly followed during the fiscal year. In addition, the Clinic did not follow the Uniform Guidance requirements related to small purchases and noncompetitive procurements. Questioned costs: $53,482, determined as the amount of the procurement expenditures included in the schedule of expenditures of federal awards for the year ended December 31, 2023, for the one procurement transaction that had inadequate support for compliance with CFR 200.320 at the time of procurement, as follows: • Assistance Listing No. 93.310, OD023121 – $53,482 Context: Internal Control We sampled nine federal procurements over $25,000 to test operating effectiveness of internal controls, totaling $962,393, from a population of 74 federal procurements over $25,000, totaling $5,400,242 and noted the following: • For seven of the 11 federal procurements tested totaling $770,093, procurement controls were not operating effectively. • For five of 11 procurement transactions tested totaling $529,273, the independent suspension and debarment check to be performed at the time of procurement was not performed until approximately two to eight months later. Compliance We sampled 11 federal procurements over $25,000 to test compliance, totaling $1,736,844, from a population of 74 federal procurements over $25,000, totaling $5,400,242 and noted the following: • For one of 11 federal procurements tested totaling $53,482, documentation retained was not adequate to support that the procurement transaction was executed in accordance with the Uniform Guidance Sections 200.320(a)(2)(i) and (b). • For five of 11 procurement transactions tested totaling $529,273, the Clinic did not follow its suspension and debarment procedures as required by its procurement justification form. Procurement-related expenditures are approximately 9% of total Federal expenditures for the R&D Cluster of $445,961,340 for the year ended December 31, 2023. Identification as a repeat finding, if applicable: The finding is not a repeat of the finding of the prior year. Recommendation: The Clinic should ensure that all R&D awards that require procurement of goods and services follow established policies, procedures, and internal controls to comply with the Uniform Guidance procurement standards and that the procurement justification form is reviewed prior to entering into the purchase transaction. The Clinic should ensure that independent checks for suspension and debarment should be timely completed at the time of procurement in accordance with the Clinic documented policies, procedures, and internal controls. Views of responsible officials: Management will reinforce education and training to the research community and procurement teams regarding the procurement requirements, Justification of Source Selection Checklist/Form, and timely completion of the required documentation. The Clinic utilizes a third party, Visual Compliance, to execute daily supplier sanction and debarment checks for all Mayo Clinic vendors. All third party suspension and debarment match alerts are reviewed and adjudicated as needed. Going forward, the Clinic will supplement this daily review by periodically validating a sample of vendors who are not flagged with an alert by Visual Compliance.
Procurement, Suspension and Debarment Identification of the federal program: Federal Agencies: U.S. Department of Health and Human Services and U.S. Department of Defense Federal Cluster: Research and Development (R&D) Pass-Through Entity: The University of Texas Health (93.853, NS119834) Assistance Listing Nos.: 12.420, 93.310, 93.353, 93.393, and 93.853 Award Numbers: W81XWH-15-1-0292 (12.420), OD23121 (93.310), CA246568 (93.353), CA259201 (93.393), NS119834 (93.853), NS122096 (93.853) Award Periods: Various Criteria or specific requirement (including statutory, regulatory or other citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: “The Non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Section 200.320(a)(2)(i) of the Uniform Guidance states the following regarding small purchases: “The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.” Section 200.320(b) of the Uniform Guidance states the following regarding formal procurement methods to be followed: “When the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold (SAT), or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section.” Section 200.214 of the Uniform Guidance states “Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities.” The Clinic procurement justification form for procurements more than $25,000 requires completion of the rationale for the procurement and a search of the federal government’s exclusion list to be performed and documented at the time of the procurement. On a monthly basis, Supply Chain Management performs a review of completed procurement justification forms related to procurements > $25,000 to ensure they are documented in accordance with the Clinic’s procurement, suspension and debarment policies and procedures. Condition: Internal Control For five (56%) of nine procurement transactions tested for operating effectiveness of internal controls, the procurement justification form used by the Clinic to document the history of the procurement and compliance with Uniform Guidance CFR 200.303, was not completed until after the purchase order was created and/or invoice received from the vendor. In addition, for these same five procurement transactions, the Clinic did not timely document its suspension and debarment check at the time of procurement as required by its procurement justification form. In addition, for four (44%) of nine procurement transactions tested for operating effectiveness of internal controls (two of which relate to the five cited above), the procurement justification form used by the Clinic to document the procurement transaction’s compliance with policies, procedures and the Uniform Guidance was outdated. Furthermore, the monthly review of completed procurement justification forms related to procurements > $25,000 to ensure they are documented in accordance with the Clinic’s procurement, suspension and debarment policies and procedures was not operating effectively. Compliance For one (9%) of 11 procurement transactions tested for compliance, the procurement was an add-on purchase related to a larger procurement of the same product under a prior purchase order. The prior procurement was above the simplified acquisition threshold and the Clinic’s competitive bid threshold. The Clinic did not complete a procurement justification form for the add-on purchase (which was a small purchase), and the original procurement did not have adequate support to evidence that it had been competitively bid. As such, adequate documentation did not exist for the procurement in accordance with Uniform Guidance Section 230.320(a)(2)(i) and(b). In addition, for five procurement transactions, the Clinic did not follow its suspension and debarment procedures as required by its procurement justification form. Cause: While management has internal controls in place to review procurements > $25,000 to ensure they are documented in accordance with the Clinic’s procurement, suspension and debarment policies and procedures and Uniform Guidance CFR 200.320, the review of the procurement justification form is not robust enough to identify errors and there is not a process in place to ensure the form is completed prior to the purchase. Effect or potential effect: The Clinic’s internal controls over procurement were not properly followed during the fiscal year. In addition, the Clinic did not follow the Uniform Guidance requirements related to small purchases and noncompetitive procurements. Questioned costs: $53,482, determined as the amount of the procurement expenditures included in the schedule of expenditures of federal awards for the year ended December 31, 2023, for the one procurement transaction that had inadequate support for compliance with CFR 200.320 at the time of procurement, as follows: • Assistance Listing No. 93.310, OD023121 – $53,482 Context: Internal Control We sampled nine federal procurements over $25,000 to test operating effectiveness of internal controls, totaling $962,393, from a population of 74 federal procurements over $25,000, totaling $5,400,242 and noted the following: • For seven of the 11 federal procurements tested totaling $770,093, procurement controls were not operating effectively. • For five of 11 procurement transactions tested totaling $529,273, the independent suspension and debarment check to be performed at the time of procurement was not performed until approximately two to eight months later. Compliance We sampled 11 federal procurements over $25,000 to test compliance, totaling $1,736,844, from a population of 74 federal procurements over $25,000, totaling $5,400,242 and noted the following: • For one of 11 federal procurements tested totaling $53,482, documentation retained was not adequate to support that the procurement transaction was executed in accordance with the Uniform Guidance Sections 200.320(a)(2)(i) and (b). • For five of 11 procurement transactions tested totaling $529,273, the Clinic did not follow its suspension and debarment procedures as required by its procurement justification form. Procurement-related expenditures are approximately 9% of total Federal expenditures for the R&D Cluster of $445,961,340 for the year ended December 31, 2023. Identification as a repeat finding, if applicable: The finding is not a repeat of the finding of the prior year. Recommendation: The Clinic should ensure that all R&D awards that require procurement of goods and services follow established policies, procedures, and internal controls to comply with the Uniform Guidance procurement standards and that the procurement justification form is reviewed prior to entering into the purchase transaction. The Clinic should ensure that independent checks for suspension and debarment should be timely completed at the time of procurement in accordance with the Clinic documented policies, procedures, and internal controls. Views of responsible officials: Management will reinforce education and training to the research community and procurement teams regarding the procurement requirements, Justification of Source Selection Checklist/Form, and timely completion of the required documentation. The Clinic utilizes a third party, Visual Compliance, to execute daily supplier sanction and debarment checks for all Mayo Clinic vendors. All third party suspension and debarment match alerts are reviewed and adjudicated as needed. Going forward, the Clinic will supplement this daily review by periodically validating a sample of vendors who are not flagged with an alert by Visual Compliance.
Information on the Federal Program: Assistance Listing Number 21.027 – Coronavirus State and Local Fiscal Recovery Funds. Compliance Requirement: Procurement and Suspension and Debarment. Type of Finding: Significant deficiency in internal control over major federal programs. Criteria: The Uniform Guidance at 2 CFR 200.214, 2 CFR Part 180, and Treasury’s implementing regulations at 31 CFR Part 19, prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Covered transactions include contracts for goods and services awarded under a nonprocurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All nonprocurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: We noted that the County does not have a process to check for suspension and debarment. Cause: County staff are not familiar with federal suspension and debarment requirements. Effect or Potential Effect: The County has a significant deficiency in internal control with respect to its procurement policies and procedures, which could result in significant noncompliance or questioned costs in the future. Recommendation: County management should ensure that procurement policies and procedures regarding the expenditure of federal funds are updated to address suspension and debarment and that these policies and procedures are being following by all County personnel. In addition, we recommend that County management provide training related to procurement policies and procedures to all County personnel with the ability to enter into a contract.
2023-003 Federal Grants Management - Procurement Policy – Suspension and Debarment Federal Agency: Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: N/A Pass-Through Agency: Michigan Department of Treasury Award Period: March 1, 2021 – December 31, 2024 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matter Criteria or Specific Requirement: 2 CFR Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: The County did not perform a search for suspension and debarment for vendors the County initiated procurement transactions in excess of $25,000. Questioned Costs: None Context: During our testing, it was noted on both items tested that Dickinson County, Michigan was not reviewing vendors prior to entering into a contract with a vendor to ensure the vendor was not on the suspended or debarred vendor list maintained by the General Services Administration. Cause: The County was not aware of the requirements under suspension and debarment. Effect: The County could contract with a vendor that has been suspended or debarred from receiving federal funds. Repeat Finding: Repeat of Finding 2022-003 Recommendation: We recommend the County use sam.gov or the ELPS listing to review clients at the beginning of the year or before a transaction is incurred in accordance with Uniform Guidance requirements. Views of Responsible Officials: There is no disagreement with the audit finding.
FINDING 2023-004 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Procurement and Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY2023 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report for suspension and debarment. The prior audit finding number was 2022-003. Condition and Context Procurement - Policy The County did not have a County Council approved procurement policy that would reflect applicable state laws and regulations, including procedures to avoid acquisition of unnecessary or duplicative items and procedures to ensure that all solicitations incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Procurement - Small Purchases Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a nonfederal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $50,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. INDIANA STATE BOARD OF ACCOUNTS 25 BOONE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The County had five vendors that qualified for testing under small purchase procurement requirements (vendors paid $10,000-$150,000). Of the two chosen for testing, one was awarded a contract without the County obtaining quotes. The contract awarded was $31,000 for engineering services related to drain construction. The lack of effective internal controls and noncompliance was isolated to the small purchase identified above. Suspension and Debarment Prior to entering into subawards and covered transactions with State and Local Fiscal Recovery Funds (SLFRF), recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. Due to the U.S. Department of the Treasury's (Treasury) determination that the revenue loss eligible use category does not give rise to subawards, the County was only required to comply with suspension and debarment requirements related to covered transactions. Upon inquiry of the County, in order to review the procedures in place for verifying that an entity with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the County explained they were aware of the suspension and debarment requirements related to the SLFRF awards; however, the County did not retain documentation of SAMs.gov checks nor was a clause always included in a contract. A population of ten covered transactions for goods or services, totaling $2,371,047, that equaled or exceeded $25,000 paid from SLFRF funds during the audit period was identified. A sample of three transactions, totaling $1,473,295, was selected for testing. For each of the three transactions, the County did not verify the vendors' suspension and debarment status prior to payment. Due to the number and magnitude of exceptions identified, per auditor judgment, we concluded it would not be appropriate to expand the sample size or perform any additional audit procedures. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 26 BOONE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.318 states: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will 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. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." 2 CFR 200.214 states: "Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are de-barred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or INDIANA STATE BOARD OF ACCOUNTS 27 BOONE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (c) Adding a clause or condition to the covered transaction with that person." Part 4 of the Treasury's Compliance and Reporting Guidance states in part: ". . . recipients are expected to have procurement policies and procedures in place that comply with the procurement standards outlined in the Uniform Guidance . . ." Cause A proper system of internal controls was not designed by the management of the County. The County was unable to provide documentation to demonstrate it checked SAM.gov to verify that contractors and vendors were not suspended or debarred. The County was also unable to provide documentation explaining the rationale behind decisions to offer contracts without obtaining an adequate number of bids or quotes. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the County's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, one small purchase did not have an adequate number of quotes. In addition, vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. Questioned Costs There were no questioned costs identified. Recommendation We recommended the County establish documented procurement procedures consistent with state and local laws for the acquisition of property or services required under a federal award or subaward as outlined in the code of federal regulations. In addition, we recommended the County adhere to the procurement policies and obtain required quotes and bids or adequately document a sole source situation. Finally, we recommended that the County strengthen its system of internal controls to ensure that all vendors that are paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before entering into any covered transactions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2023-004: Suspension and Debarment Federal Programs: All programs Criteria: As stated in 2 CFR §200.303, the non-Federal entity (i.e. the Center) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR §200.214, the non-Federal entity is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: During our audit, we noted several cases in which the Center did not perform, or did not maintain proper support to demonstrate that it performed checks via SAM.gov to ensure that potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be excluded by the U.S. Government. Cause: During 2023, the Center's finance department turned over significantly, resulting in oversight of the compliance requirement. Effect or Potential Effect: The Center is exposed to an increased risk that future noncompliance could occur by entering into transactions with vendors, contractors, or consultants that are suspended and debarred. If a non-Federal entity knowingly does business with an excluded person, the agency responsible for the Center's funding may disallow costs, annul or terminate the transaction, issue a stop work order, debar or suspend the non-Federal entity, or take other remedies as appropriate. Questioned Costs: None noted. Context: The Center failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the Center implement internal controls to ensure that all vendors, contractors, and consultants are screened for suspension and debarment prior to entering into any executed contract. We further recommend that a policy be formalized and implemented that requires an annual screening of any current vendors, contractors, or consultants as well.
Finding 2023-004: Suspension and Debarment Federal Programs: All programs Criteria: As stated in 2 CFR §200.303, the non-Federal entity (i.e. the Center) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR §200.214, the non-Federal entity is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: During our audit, we noted several cases in which the Center did not perform, or did not maintain proper support to demonstrate that it performed checks via SAM.gov to ensure that potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be excluded by the U.S. Government. Cause: During 2023, the Center's finance department turned over significantly, resulting in oversight of the compliance requirement. Effect or Potential Effect: The Center is exposed to an increased risk that future noncompliance could occur by entering into transactions with vendors, contractors, or consultants that are suspended and debarred. If a non-Federal entity knowingly does business with an excluded person, the agency responsible for the Center's funding may disallow costs, annul or terminate the transaction, issue a stop work order, debar or suspend the non-Federal entity, or take other remedies as appropriate. Questioned Costs: None noted. Context: The Center failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the Center implement internal controls to ensure that all vendors, contractors, and consultants are screened for suspension and debarment prior to entering into any executed contract. We further recommend that a policy be formalized and implemented that requires an annual screening of any current vendors, contractors, or consultants as well.
Finding 2023-004: Suspension and Debarment Federal Programs: All programs Criteria: As stated in 2 CFR §200.303, the non-Federal entity (i.e. the Center) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR §200.214, the non-Federal entity is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: During our audit, we noted several cases in which the Center did not perform, or did not maintain proper support to demonstrate that it performed checks via SAM.gov to ensure that potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be excluded by the U.S. Government. Cause: During 2023, the Center's finance department turned over significantly, resulting in oversight of the compliance requirement. Effect or Potential Effect: The Center is exposed to an increased risk that future noncompliance could occur by entering into transactions with vendors, contractors, or consultants that are suspended and debarred. If a non-Federal entity knowingly does business with an excluded person, the agency responsible for the Center's funding may disallow costs, annul or terminate the transaction, issue a stop work order, debar or suspend the non-Federal entity, or take other remedies as appropriate. Questioned Costs: None noted. Context: The Center failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the Center implement internal controls to ensure that all vendors, contractors, and consultants are screened for suspension and debarment prior to entering into any executed contract. We further recommend that a policy be formalized and implemented that requires an annual screening of any current vendors, contractors, or consultants as well.
Finding 2023-004: Suspension and Debarment Federal Programs: All programs Criteria: As stated in 2 CFR §200.303, the non-Federal entity (i.e. the Center) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR §200.214, the non-Federal entity is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: During our audit, we noted several cases in which the Center did not perform, or did not maintain proper support to demonstrate that it performed checks via SAM.gov to ensure that potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be excluded by the U.S. Government. Cause: During 2023, the Center's finance department turned over significantly, resulting in oversight of the compliance requirement. Effect or Potential Effect: The Center is exposed to an increased risk that future noncompliance could occur by entering into transactions with vendors, contractors, or consultants that are suspended and debarred. If a non-Federal entity knowingly does business with an excluded person, the agency responsible for the Center's funding may disallow costs, annul or terminate the transaction, issue a stop work order, debar or suspend the non-Federal entity, or take other remedies as appropriate. Questioned Costs: None noted. Context: The Center failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the Center implement internal controls to ensure that all vendors, contractors, and consultants are screened for suspension and debarment prior to entering into any executed contract. We further recommend that a policy be formalized and implemented that requires an annual screening of any current vendors, contractors, or consultants as well.
Finding 2023-004: Suspension and Debarment Federal Programs: All programs Criteria: As stated in 2 CFR §200.303, the non-Federal entity (i.e. the Center) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR §200.214, the non-Federal entity is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: During our audit, we noted several cases in which the Center did not perform, or did not maintain proper support to demonstrate that it performed checks via SAM.gov to ensure that potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be excluded by the U.S. Government. Cause: During 2023, the Center's finance department turned over significantly, resulting in oversight of the compliance requirement. Effect or Potential Effect: The Center is exposed to an increased risk that future noncompliance could occur by entering into transactions with vendors, contractors, or consultants that are suspended and debarred. If a non-Federal entity knowingly does business with an excluded person, the agency responsible for the Center's funding may disallow costs, annul or terminate the transaction, issue a stop work order, debar or suspend the non-Federal entity, or take other remedies as appropriate. Questioned Costs: None noted. Context: The Center failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the Center implement internal controls to ensure that all vendors, contractors, and consultants are screened for suspension and debarment prior to entering into any executed contract. We further recommend that a policy be formalized and implemented that requires an annual screening of any current vendors, contractors, or consultants as well.
Finding 2023-004: Suspension and Debarment Federal Programs: All programs Criteria: As stated in 2 CFR §200.303, the non-Federal entity (i.e. the Center) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR §200.214, the non-Federal entity is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: During our audit, we noted several cases in which the Center did not perform, or did not maintain proper support to demonstrate that it performed checks via SAM.gov to ensure that potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be excluded by the U.S. Government. Cause: During 2023, the Center's finance department turned over significantly, resulting in oversight of the compliance requirement. Effect or Potential Effect: The Center is exposed to an increased risk that future noncompliance could occur by entering into transactions with vendors, contractors, or consultants that are suspended and debarred. If a non-Federal entity knowingly does business with an excluded person, the agency responsible for the Center's funding may disallow costs, annul or terminate the transaction, issue a stop work order, debar or suspend the non-Federal entity, or take other remedies as appropriate. Questioned Costs: None noted. Context: The Center failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the Center implement internal controls to ensure that all vendors, contractors, and consultants are screened for suspension and debarment prior to entering into any executed contract. We further recommend that a policy be formalized and implemented that requires an annual screening of any current vendors, contractors, or consultants as well.
Finding 2023-004: Suspension and Debarment Federal Programs: All programs Criteria: As stated in 2 CFR §200.303, the non-Federal entity (i.e. the Center) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR §200.214, the non-Federal entity is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: During our audit, we noted several cases in which the Center did not perform, or did not maintain proper support to demonstrate that it performed checks via SAM.gov to ensure that potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be excluded by the U.S. Government. Cause: During 2023, the Center's finance department turned over significantly, resulting in oversight of the compliance requirement. Effect or Potential Effect: The Center is exposed to an increased risk that future noncompliance could occur by entering into transactions with vendors, contractors, or consultants that are suspended and debarred. If a non-Federal entity knowingly does business with an excluded person, the agency responsible for the Center's funding may disallow costs, annul or terminate the transaction, issue a stop work order, debar or suspend the non-Federal entity, or take other remedies as appropriate. Questioned Costs: None noted. Context: The Center failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the Center implement internal controls to ensure that all vendors, contractors, and consultants are screened for suspension and debarment prior to entering into any executed contract. We further recommend that a policy be formalized and implemented that requires an annual screening of any current vendors, contractors, or consultants as well.
2023-004 Federal Grants Management - Procurement Policy Federal Agency: Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: N/A Pass-Through Agency: N/A Award Period: March 1, 2021 – December 31, 2024 Type of Finding: Significant deficiency in internal control over compliance, other matters. Criteria or Specific Requirement 2 CFR Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. 2 CFR 200.303 states “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The County did not perform a search for suspension and debarment for vendors the County initiated procurement transactions in excess of $25,000. Questioned Costs None Section III – Findings and Questioned Costs – Major Federal and State Programs (Continued) 2023-004 (Continued) Context There was one transaction that exceeded the $25,000 covered transaction threshold during the granting period. During our testing, it was noted on the item tested that Florence County was not reviewing vendors prior to entering into a contract with a vendor to ensure the vendor was not on the suspended or debarred vendor list maintained by the General Services Administration. Cause The County was not aware of the requirements under suspension and debarment. Effect The County could contract with a vendor that has been suspended or debarred from receiving federal funds. Recommendation We recommend the County use sam.gov or the ELPS listing to review clients at the beginning of the year or before a transaction is incurred in accordance with Uniform Guidance requirements. Views of Responsible Officials and Planned Corrective Actions There is no disagreement with the audit finding.
2023-004 Federal Grants Management - Procurement Policy Federal Agency: Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: N/A Pass-Through Agency: N/A Award Period: March 1, 2021 – December 31, 2024 Type of Finding: Significant deficiency in internal control over compliance, other matters. Criteria or Specific Requirement 2 CFR Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. 2 CFR 200.303 states “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The County did not perform a search for suspension and debarment for vendors the County initiated procurement transactions in excess of $25,000. Questioned Costs None Section III – Findings and Questioned Costs – Major Federal and State Programs (Continued) 2023-004 (Continued) Context There was one transaction that exceeded the $25,000 covered transaction threshold during the granting period. During our testing, it was noted on the item tested that Florence County was not reviewing vendors prior to entering into a contract with a vendor to ensure the vendor was not on the suspended or debarred vendor list maintained by the General Services Administration. Cause The County was not aware of the requirements under suspension and debarment. Effect The County could contract with a vendor that has been suspended or debarred from receiving federal funds. Recommendation We recommend the County use sam.gov or the ELPS listing to review clients at the beginning of the year or before a transaction is incurred in accordance with Uniform Guidance requirements. Views of Responsible Officials and Planned Corrective Actions There is no disagreement with the audit finding.
2023-004 Federal Grants Management - Procurement Policy Federal Agency: Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: N/A Pass-Through Agency: N/A Award Period: March 1, 2021 – December 31, 2024 Type of Finding: Significant deficiency in internal control over compliance, other matters. Criteria or Specific Requirement 2 CFR Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. 2 CFR 200.303 states “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The County did not perform a search for suspension and debarment for vendors the County initiated procurement transactions in excess of $25,000. Questioned Costs None Section III – Findings and Questioned Costs – Major Federal and State Programs (Continued) 2023-004 (Continued) Context There was one transaction that exceeded the $25,000 covered transaction threshold during the granting period. During our testing, it was noted on the item tested that Florence County was not reviewing vendors prior to entering into a contract with a vendor to ensure the vendor was not on the suspended or debarred vendor list maintained by the General Services Administration. Cause The County was not aware of the requirements under suspension and debarment. Effect The County could contract with a vendor that has been suspended or debarred from receiving federal funds. Recommendation We recommend the County use sam.gov or the ELPS listing to review clients at the beginning of the year or before a transaction is incurred in accordance with Uniform Guidance requirements. Views of Responsible Officials and Planned Corrective Actions There is no disagreement with the audit finding.
2023-004 Federal Grants Management - Procurement Policy Federal Agency: Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: N/A Pass-Through Agency: N/A Award Period: March 1, 2021 – December 31, 2024 Type of Finding: Significant deficiency in internal control over compliance, other matters. Criteria or Specific Requirement 2 CFR Section 200.214 requires non-federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. 2 CFR 200.303 states “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The County did not perform a search for suspension and debarment for vendors the County initiated procurement transactions in excess of $25,000. Questioned Costs None Section III – Findings and Questioned Costs – Major Federal and State Programs (Continued) 2023-004 (Continued) Context There was one transaction that exceeded the $25,000 covered transaction threshold during the granting period. During our testing, it was noted on the item tested that Florence County was not reviewing vendors prior to entering into a contract with a vendor to ensure the vendor was not on the suspended or debarred vendor list maintained by the General Services Administration. Cause The County was not aware of the requirements under suspension and debarment. Effect The County could contract with a vendor that has been suspended or debarred from receiving federal funds. Recommendation We recommend the County use sam.gov or the ELPS listing to review clients at the beginning of the year or before a transaction is incurred in accordance with Uniform Guidance requirements. Views of Responsible Officials and Planned Corrective Actions There is no disagreement with the audit finding.