FINDING 2023-005 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): FY 2022 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. The prior audit finding number was 2022-004. Condition and Context An effective internal control system was not in place at the County to ensure compliance with the requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement - Policy The County had not established a purchasing policy that would reflect applicable state laws and regulations, including procedures to avoid acquisition of unnecessary or duplicative items; 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; and did not maintain written standards of conduct covering conflicts of interest and governing actions of its employees engaged in the selection, award, and administration of contracts. Suspension and Debarment Prior to entering into subawards and covered transactions with 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 County did not have internal controls in place to ensure compliance with the suspension and debarment compliance requirement. Upon inquiry of the County's policies and procedures related to suspension and debarment requirements, the County stated that they did not have policies or 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 or disqualified from participating in federal assistance programs or activities. INDIANA STATE BOARD OF ACCOUNTS 21 SHELBY COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Two covered transactions for goods or services that equaled or exceeded $25,000 that were paid from SLFRF funds during the audit period were identified. Each transaction was examined to determine whether the County verified the suspension and debarment status of either vendor prior to payment. The two covered transactions, totaling $223,499, did not include the appropriate provisions in the contracts nor did the County require a certification or check the EPLS to ensure the entity was not suspended or debarred prior to making payment. The lack of internal controls and noncompliance were systemic issues throughout the audit period for the FY 2022 grant. 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 200.318(a) states: "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." 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 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 (c) Adding a clause or condition to the covered transaction with that person." INDIANA STATE BOARD OF ACCOUNTS 22 SHELBY COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls was not designed by management of the County. 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 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, vendors and subrecipients to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. Any program funds the County used to pay vendors 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 recommended that management of the County establish a proper system of internal controls and develop policies and procedures to ensure contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Additionally, 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. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2023-003: Procurement, Suspension, and Debarment (Significant Deficiency) Federal Program: 93.129 - U.S. Department of Health and Human Services Criteria or Specific Requirement: 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: For all disbursements tested, the Organization could not provide documentation of their verification, prior to payment, that the vendors were not suspended, debarred or otherwise excluded. Questioned Costs: NoneCause: The Organization required evidence of SAM checks be maintained in its vendor files after conclusion of the 2022 audit, which was completed in October 2023. As a result, the Organization did not maintain adequate support to provide evidence that appropriate suspension and debarment searches were performed for all 2023 transactions. However, SAM checks were performed after the fact to verify that the vendors or individuals in our sample were not suspended, debarred or otherwise excluded. Therefore, no questioned costs have been reported related to the sample that was tested. Effect or Potential Effect: The Organization was not in compliance with the procurement documentation requirements of the Uniform Guidance. As a result, the Organization could not readily provide evidence that it had assessed whether or not its vendors were suspended, debarred, or otherwise excluded. The potential for payments to suspended, debarred, or otherwise excluded vendors and individuals exists. Recommendation: The Organization should establish internal controls to ensure proper documentation is maintained as evidence to support that the Organization performed the required suspension and debarment searches on the SAM website. Repeat Finding: Yes. See Finding 2022-002.
Finding 2023-003: Procurement, Suspension, and Debarment (Significant Deficiency) Federal Program: 93.129 - U.S. Department of Health and Human Services Criteria or Specific Requirement: 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: For all disbursements tested, the Organization could not provide documentation of their verification, prior to payment, that the vendors were not suspended, debarred or otherwise excluded. Questioned Costs: NoneCause: The Organization required evidence of SAM checks be maintained in its vendor files after conclusion of the 2022 audit, which was completed in October 2023. As a result, the Organization did not maintain adequate support to provide evidence that appropriate suspension and debarment searches were performed for all 2023 transactions. However, SAM checks were performed after the fact to verify that the vendors or individuals in our sample were not suspended, debarred or otherwise excluded. Therefore, no questioned costs have been reported related to the sample that was tested. Effect or Potential Effect: The Organization was not in compliance with the procurement documentation requirements of the Uniform Guidance. As a result, the Organization could not readily provide evidence that it had assessed whether or not its vendors were suspended, debarred, or otherwise excluded. The potential for payments to suspended, debarred, or otherwise excluded vendors and individuals exists. Recommendation: The Organization should establish internal controls to ensure proper documentation is maintained as evidence to support that the Organization performed the required suspension and debarment searches on the SAM website. Repeat Finding: Yes. See Finding 2022-002.
FINDING 2023-002 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasurer Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Numbers): FY 2023 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context Prior to entering into subawards and covered transactions with the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) awards 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 expended 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 County's policies related to SLFRF suspension and debarment requirement included checking the EPLS for vendor suspension and debarment. Of the 16 covered transactions, totaling $3,039,637.60, identified that were paid from the SLFRF funds during the audit period, 3 were selected for testing to verify the County followed its procedures related to suspension and debarment. Of the 3 covered transaction tested, 1 did not follow the County's procedures as outlined above. The 1 covered transaction, totaling $47,283, did not include the appropriate provisions in the contracts nor did the County require a certification or check the EPLS to ensure the entity was not suspended or debarred prior to making payment. The lack of internal controls and noncompliance were isolated to the transaction noted above. 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 contractors 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." INDIANA STATE BOARD OF ACCOUNTS 16 HOWARD COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 (c) Adding a clause or condition to the covered transaction with that person." Cause The system of internal controls as established by management of the County was not properly implemented to ensure that the policies and procedures in place related to suspension and debarment were appropriately followed. The County did not verify for one covered transaction identified in testing that the entity was not suspended or debarred prior to entering into the covered transaction. Effect Without the proper implementation of an effectively designed system of internal controls, the County could not ensure the vendors paid with federal funds were eligible to participate in federal programs. Any program funds the County used to pay vendors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. 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 strengthen its system of internal controls to ensure 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 2023-003, Procurement, Suspension and Debarment, Internal Control and Noncompliance Identification of the federal program Assistance listing number and title: 93.493 Congressional Directives Agency: U.S. Department of Health and Human Services Federal award identification number (FAIN): H79FG000996 Federal Award Year: 2023 Criteria or specific requirement (including statutory, regulatory or other citation) 2 CFR 200.303(a) requires that a 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 would be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.318 states 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 2 CFR 200.318 through 200.327. 2 CFR 200.320 discusses the methods of procurement to be followed for the acquisition of property or services required under a Federal award or sub-award. Part 3-I-1 of the 2023 OMB Compliance Supplement summarizes the regulation as follows: • Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micro-purchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). Criteria or specific requirement (including statutory, regulatory or other citation), continued • For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 2 CFR 200.214 provides that 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 System’s procurement policies did not conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200.320, and the suspension and debarment requirements in 2 CFR Part 180. Cause The System’s procurement policies lack certain elements of federal procurement, suspension and debarment standards. Effect or potential effect Not having policies that are consistent with federal requirements could lead to procurements under federal awards being inappropriate, not adequately documented or entered into with covered entities. Questioned costs None. Context The System’s procurement policies did not conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200.320. Specifically, the System’s procurement policies did not include a discussion of the criteria, thresholds and procedures to be followed for formal procurement methods (such as sealed bids and proposals), and for noncompetitive procurement. Further, the System’s vendor credentialing policy that is meant to address suspension and debarment requirements, includes a list of certain entities (such as academic institutions) that are exempted from the screening process. No such exemptions are provided for in 2 CFR Part 180. Identification as a repeat finding, if applicable Not a repeat finding. Recommendation: Management should enhance its procurement policies to ensure that all Federal requirements on procurement, suspension and debarment are incorporated. Management must ensure that the policies are supported by effective internal control activities to ensure compliance with Federal requirements. Views of responsible officials Vendor review for suspension and disbarment was performed monthly for all but one vendor in accordance with current CHST policies and management was informed of any vendors with issues; however, documentation of clean vendors was not provided. Management will coordinate with appropriate departments to review federal provisions for grant procurement and adjust policies and procedures to comply. Management will work with appropriate departments and each grant team to document monthly suspension and disbarment review process. Grant teams will review all current sourcing and provide sole source documentation where applicable.
Finding 2023-003 - Procurement and Suspension and Debarment – Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Name(s): Health Center Program Cluster - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and COVID-19 - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and Grants for New and Expanded Services Under the Health Center Program and COVID-19 - Grants for New and Expanded Services Under the Health Center Program Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number(s) and Year(s): H8F4083 - 2021, H8000626 - 2022, H8G48366 - 2022 Criteria In accordance with 2 CFR 200.214, nonfederal entities are subject to the nonprocurement debarment and suspension regulations. 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 BCHN did not perform a timely check at the System for Award Management Exclusions (sam.gov) to verify whether an employee or a vendor had been suspended or debarred before being hired. Cause There is no formal policy in place requiring a check to be performed at sam.gov for prospective employees and vendors. Effect or Potential Effect The condition could result in employees or vendors who are suspended or debarred receiving federal funds. Questioned Costs None. Context Seven exceptions from a statistically valid sample of seven. Identification as Repeat Finding No. Recommendation We recommend Human Resources (HR) personnel/management perform a check at sam.gov prior to the hire of an employee or vendor to ensure the employee or vendor was not suspended or debarred and retain evidence of that verification. We also recommend a check at sam.gov be done annually thereafter and evidence of that verification be maintained. Views of Responsible Officials BCHN will check sam.gov and the Office of Inspector General, to screen all potential employees, contractors/consultants, and vendors, prior to the commencement of their affiliation with BCHN and maintain evidence of the results. BCHN will also screen all employees, contractors, consultants, and vendors on an annual basis thereafter and maintain evidence of the results.
Finding 2023-003 - Procurement and Suspension and Debarment – Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Name(s): Health Center Program Cluster - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and COVID-19 - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and Grants for New and Expanded Services Under the Health Center Program and COVID-19 - Grants for New and Expanded Services Under the Health Center Program Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number(s) and Year(s): H8F4083 - 2021, H8000626 - 2022, H8G48366 - 2022 Criteria In accordance with 2 CFR 200.214, nonfederal entities are subject to the nonprocurement debarment and suspension regulations. 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 BCHN did not perform a timely check at the System for Award Management Exclusions (sam.gov) to verify whether an employee or a vendor had been suspended or debarred before being hired. Cause There is no formal policy in place requiring a check to be performed at sam.gov for prospective employees and vendors. Effect or Potential Effect The condition could result in employees or vendors who are suspended or debarred receiving federal funds. Questioned Costs None. Context Seven exceptions from a statistically valid sample of seven. Identification as Repeat Finding No. Recommendation We recommend Human Resources (HR) personnel/management perform a check at sam.gov prior to the hire of an employee or vendor to ensure the employee or vendor was not suspended or debarred and retain evidence of that verification. We also recommend a check at sam.gov be done annually thereafter and evidence of that verification be maintained. Views of Responsible Officials BCHN will check sam.gov and the Office of Inspector General, to screen all potential employees, contractors/consultants, and vendors, prior to the commencement of their affiliation with BCHN and maintain evidence of the results. BCHN will also screen all employees, contractors, consultants, and vendors on an annual basis thereafter and maintain evidence of the results.
Finding 2023-003 - Procurement and Suspension and Debarment – Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Name(s): Health Center Program Cluster - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and COVID-19 - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and Grants for New and Expanded Services Under the Health Center Program and COVID-19 - Grants for New and Expanded Services Under the Health Center Program Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number(s) and Year(s): H8F4083 - 2021, H8000626 - 2022, H8G48366 - 2022 Criteria In accordance with 2 CFR 200.214, nonfederal entities are subject to the nonprocurement debarment and suspension regulations. 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 BCHN did not perform a timely check at the System for Award Management Exclusions (sam.gov) to verify whether an employee or a vendor had been suspended or debarred before being hired. Cause There is no formal policy in place requiring a check to be performed at sam.gov for prospective employees and vendors. Effect or Potential Effect The condition could result in employees or vendors who are suspended or debarred receiving federal funds. Questioned Costs None. Context Seven exceptions from a statistically valid sample of seven. Identification as Repeat Finding No. Recommendation We recommend Human Resources (HR) personnel/management perform a check at sam.gov prior to the hire of an employee or vendor to ensure the employee or vendor was not suspended or debarred and retain evidence of that verification. We also recommend a check at sam.gov be done annually thereafter and evidence of that verification be maintained. Views of Responsible Officials BCHN will check sam.gov and the Office of Inspector General, to screen all potential employees, contractors/consultants, and vendors, prior to the commencement of their affiliation with BCHN and maintain evidence of the results. BCHN will also screen all employees, contractors, consultants, and vendors on an annual basis thereafter and maintain evidence of the results.
Finding 2023-003 - Procurement and Suspension and Debarment – Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Name(s): Health Center Program Cluster - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and COVID-19 - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and Grants for New and Expanded Services Under the Health Center Program and COVID-19 - Grants for New and Expanded Services Under the Health Center Program Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number(s) and Year(s): H8F4083 - 2021, H8000626 - 2022, H8G48366 - 2022 Criteria In accordance with 2 CFR 200.214, nonfederal entities are subject to the nonprocurement debarment and suspension regulations. 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 BCHN did not perform a timely check at the System for Award Management Exclusions (sam.gov) to verify whether an employee or a vendor had been suspended or debarred before being hired. Cause There is no formal policy in place requiring a check to be performed at sam.gov for prospective employees and vendors. Effect or Potential Effect The condition could result in employees or vendors who are suspended or debarred receiving federal funds. Questioned Costs None. Context Seven exceptions from a statistically valid sample of seven. Identification as Repeat Finding No. Recommendation We recommend Human Resources (HR) personnel/management perform a check at sam.gov prior to the hire of an employee or vendor to ensure the employee or vendor was not suspended or debarred and retain evidence of that verification. We also recommend a check at sam.gov be done annually thereafter and evidence of that verification be maintained. Views of Responsible Officials BCHN will check sam.gov and the Office of Inspector General, to screen all potential employees, contractors/consultants, and vendors, prior to the commencement of their affiliation with BCHN and maintain evidence of the results. BCHN will also screen all employees, contractors, consultants, and vendors on an annual basis thereafter and maintain evidence of the results.
FINDING 2023-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - 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): 20-1892-0-1-806 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context The County elected to receive the standard revenue loss allowance, allowing it to claim its total COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) allocation of $3,723,354 as revenue loss to use for government services. As such, all SLFRF program funds to date were expended under the revenue loss eligible use category. The U.S. Department of the Treasury (Treasury) determined that there are no subawards under this eligible use category, and that recipients' use of revenue loss funds would not give rise to subrecipient relationships as there is no federal program or purpose to carry out in the case of the revenue loss portion of the award. Prior to entering into subawards and covered transactions with the 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 County did not have any policies or procedures in place related to the suspension and debarment requirements. A population of 12 covered transactions, totaling $1,038,900, that equaled or exceeded $25,000 paid from SLFRF funds were identified. Of the 12 covered transactions, there were 4, totaling $441,145, that were selected for testing. For each of the 4 transactions, the County did not verify the vendors' suspension or debarment status prior to payment due to the County 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 18 PERRY COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.214 states: "Non-federal entities and contractors 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 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 (c) Adding a clause or condition to the covered transaction with that person" Cause The County's purchasing policy does not include procedures to verify suspension and debarment status for covered transactions it intends to pay with federal funds. Effect Without the proper implementation of an effectively designed system of internal controls, the County cannot ensure that contractors paid with federal funds are eligible to participate in federal programs. Any program funds the County used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. 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 recommend that management of the County strengthen its 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.
FINDING 2023-005 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): OMB Approval #1505-0271 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 21 FULTON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Procurement - Policy The County had not established a purchasing policy that would reflect applicable state laws and regulations, including procedures to avoid the acquisition of unnecessary or duplicative items; 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; and did not maintain written standards of conduct covering conflicts of interest and governing actions of its employees engaged in the selection, award, and administration of contracts. 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 non-federal 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. The County had one vendor that was identified as being less than the simplified acquisition threshold of $150,000 but exceeding the $50,000 micro-purchase threshold. The one vendor was selected for testing. For the one vendor, the County did not obtain price or rate quotes nor was there documentation detailing the history of procurement, which must include the reason for the procurement method used. Suspension and Debarment Prior to entering into subawards and covered transactions with 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. Upon inquiring of the County to determine its policies and procedures related to suspension and debarment requirements, the County stated procedures were not in place to ensure vendors were not suspended or debarred prior to entering into covered transactions. One covered transaction paid with SLFRF grant funds was identified during the audit period. The covered transaction totaled $66,000 with $46,752 paid in the audit period. The identified transaction was examined to determine if the County verified the suspension and debarment status of the vendor prior to payment. Upon review, the County had not performed procedures to ensure the vendor was not suspended or debarred, or otherwise excluded or disqualified, from participation in federal assistance programs or activities at any time during the audit period. INDIANA STATE BOARD OF ACCOUNTS 22 FULTON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 200.318 states in part: "(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." INDIANA STATE BOARD OF ACCOUNTS 23 FULTON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 (c) Adding a clause or condition to the covered transaction with that person." Part 4 of the Treasury's Compliance and Reporting Guidance states: ". . . recipients are expected to have procurement policies and procedures in place that comply with the procurement standards outlined in the Uniform Guidance . . ." Cause The County participated in a joint project with the City of Rochester (City) in which the City handled the procurement process. However, the County did not request copies of the quotes or bids obtained by the city, nor did the County document a sole source vendor situation. In addition, the County was unable to provide documentation to demonstrate they checked the vendor was not suspended or debarred prior to entering into the contract. Effect Without the proper implementation of an effectively designed system of internal controls, the County cannot ensure that services obtained provided full and open competition or the basis of the price. In addition, the County cannot ensure the vendors paid were eligible to participate in federal programs. Any program funds the County used to pay vendors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Noncompliance with the provisions of federal 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. INDIANA STATE BOARD OF ACCOUNTS 24 FULTON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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.
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.
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 2023-001 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 2023-001 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 2023-001 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.