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.
Criteria: The Corporation must maintain and adhere to documented procurement procedures that must conform to the procurement standards in 2 CFR Sections 200.317 through 200.327. These sections include policies and procedures related to competition, informal and formal procurement methods and noncompetitive procurement. Condition: We noted that there was a lack of evidence that policies and procedures were applied as required under the noted 2 CFR Sections in “Criteria”. Cause: The Corporation did not maintain formal documentation or evidence to support that a competitive price analysis for vendors or that suspension and debarment verifications were performed for vendors, as required by the general procurement standards of the Uniform Guidance. Effect or Potential Effect: We were unable to determine whether charges relating to vendor services or goods charged to the Federal programs are in accordance with 2 CFR Sections 200.317 through 200.327 or 200.214. Questioned costs: None Context: The Corporation was unable to provide evidence of procurement, suspension or debarment verification performed for walkthrough purposes or any samples that would be selected. Additionally, per management, no written documentation can be provided for any sole source procurements. Repeat finding: This is a repeat finding from prior year. This was reported as finding 2022-010 in the 2022 report. Recommendation: We recommend the Corporation establish formal internal controls, and documentation of their performance, relating procurement, required price analysis of vendors, and suspension and debarment verifications. View of Responsible Officials: Due to turnover of several key financial executives and personnel and lack of formal documentation of current policies and procedures, the Corporation was unable to provide evidence of procurement, suspension or debarment verification performed as of December 31, 2023.
U.S. Department of Health and Human Services, passed through Kansas Department of Aging Aging Cluster - ALN 93.044 - Special Programs for the Aging_Title III, Part B_Grants for Supportive Services and Senior Centers - 2301KSOASS ALN 93.045 - Special Programs for the Aging _Title III, Part C_Nutrition Services - 2301KSOAHD Criteria or Specific Requirement: Suspension and Debarment and Significant Deficiency In accordance with 2 CFR 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR Section 180.215. Per 2 CFR 200.303, the non-Federal entities receiving federal awards (i.e., auditee management) establish and maintain internal control design to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: Suspension and debarment checks were not completed for the subrecipients that received federal funds. Questioned Costs: None noted. Context: Only one subreceipient received pass-through funding from the Unified Government. The single subrecipient under both ALN 93.044 and 93.045, receiving approximately $180,000, was not evaluated for suspension and debarment. It was noted after subsequent check, that the subrecipient was not suspended or debarred. Identification of Prior Year Finding: 2022-007 Effect: Federal funds could be paid to entities that are suspended or debarred. Cause: For the Unified Government, this is typically included in the contracts, but was not included in the subrecipient contracts for this program and the Unified Government did not have another means of validating suspension and debarment. Recommendation: Policies and procedures should be modified to ensure that suspension and debarment checks are performed on vendors and subrecipients alike prior to making purchases with federal funds. When newly established programs include subrecipients, we also recommend the contracts include suspension and debarment language. View of Responsible Official and Planned Corrective Actions: The reason for recurrence is the finding was communicated late in the prior year and due to transition and turnover within the department's staff. Procurement has begun the process of checking SAM.gov for debarment for potential suppliers. Also, departments have been informed of this required step for both suppliers and subrecipients. Downstream, need to evaluate if this language can be added to the contract templates.
U.S. Department of Health and Human Services, passed through Kansas Department of Aging Aging Cluster - ALN 93.044 - Special Programs for the Aging_Title III, Part B_Grants for Supportive Services and Senior Centers - 2301KSOASS ALN 93.045 - Special Programs for the Aging _Title III, Part C_Nutrition Services - 2301KSOAHD Criteria or Specific Requirement: Suspension and Debarment and Significant Deficiency In accordance with 2 CFR 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR Section 180.215. Per 2 CFR 200.303, the non-Federal entities receiving federal awards (i.e., auditee management) establish and maintain internal control design to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: Suspension and debarment checks were not completed for the subrecipients that received federal funds. Questioned Costs: None noted. Context: Only one subreceipient received pass-through funding from the Unified Government. The single subrecipient under both ALN 93.044 and 93.045, receiving approximately $180,000, was not evaluated for suspension and debarment. It was noted after subsequent check, that the subrecipient was not suspended or debarred. Identification of Prior Year Finding: 2022-007 Effect: Federal funds could be paid to entities that are suspended or debarred. Cause: For the Unified Government, this is typically included in the contracts, but was not included in the subrecipient contracts for this program and the Unified Government did not have another means of validating suspension and debarment. Recommendation: Policies and procedures should be modified to ensure that suspension and debarment checks are performed on vendors and subrecipients alike prior to making purchases with federal funds. When newly established programs include subrecipients, we also recommend the contracts include suspension and debarment language. View of Responsible Official and Planned Corrective Actions: The reason for recurrence is the finding was communicated late in the prior year and due to transition and turnover within the department's staff. Procurement has begun the process of checking SAM.gov for debarment for potential suppliers. Also, departments have been informed of this required step for both suppliers and subrecipients. Downstream, need to evaluate if this language can be added to the contract templates.
Information on the federal program – All federal programs Criteria or specific requirement – As stated in 2 CFR §200.303, the non-federal entity (i.e., the Center) must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations and terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR §200.214, the non-federal entity is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition – During the 2022 audit, the predecessor auditor noted several cases in which the Organization did not perform, or did not maintain proper support to demonstrate that it performed checks via SAM.gov to ensure that potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be excluded by the U.S. Government. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that suspension and debarment was being performed prior to entering into contracts with vendors or contractors/consultants. Effect or potential effect – The Organization is exposed to an increased risk that future noncompliance could occur by entering into transactions with vendors, contractors, or consultants that are suspended and debarred. Questioned costs – None Context – The Organization failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature. Identification as a repeat finding, if applicable – Is a repeat finding (2022-010) Recommendation – We recommend the Organization implement internal controls to ensure that all vendors, contractors, and consultants are screened for suspension and debarment prior to entering into any executed contract. We further recommend that a policy be formalized and implemented that requires an annual screening of any current vendors, contractors, or consultants as well. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
Information on the federal program – All federal programs Criteria or specific requirement – As stated in 2 CFR §200.303, the non-federal entity (i.e., the Center) must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations and terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR §200.214, the non-federal entity is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition – During the 2022 audit, the predecessor auditor noted several cases in which the Organization did not perform, or did not maintain proper support to demonstrate that it performed checks via SAM.gov to ensure that potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be excluded by the U.S. Government. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that suspension and debarment was being performed prior to entering into contracts with vendors or contractors/consultants. Effect or potential effect – The Organization is exposed to an increased risk that future noncompliance could occur by entering into transactions with vendors, contractors, or consultants that are suspended and debarred. Questioned costs – None Context – The Organization failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature. Identification as a repeat finding, if applicable – Is a repeat finding (2022-010) Recommendation – We recommend the Organization implement internal controls to ensure that all vendors, contractors, and consultants are screened for suspension and debarment prior to entering into any executed contract. We further recommend that a policy be formalized and implemented that requires an annual screening of any current vendors, contractors, or consultants as well. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
Information on the federal program – All federal programs Criteria or specific requirement – As stated in 2 CFR §200.303, the non-federal entity (i.e., the Center) must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations and terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR §200.214, the non-federal entity is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition – During the 2022 audit, the predecessor auditor noted several cases in which the Organization did not perform, or did not maintain proper support to demonstrate that it performed checks via SAM.gov to ensure that potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be excluded by the U.S. Government. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that suspension and debarment was being performed prior to entering into contracts with vendors or contractors/consultants. Effect or potential effect – The Organization is exposed to an increased risk that future noncompliance could occur by entering into transactions with vendors, contractors, or consultants that are suspended and debarred. Questioned costs – None Context – The Organization failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature. Identification as a repeat finding, if applicable – Is a repeat finding (2022-010) Recommendation – We recommend the Organization implement internal controls to ensure that all vendors, contractors, and consultants are screened for suspension and debarment prior to entering into any executed contract. We further recommend that a policy be formalized and implemented that requires an annual screening of any current vendors, contractors, or consultants as well. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
Information on the federal program – All federal programs Criteria or specific requirement – As stated in 2 CFR §200.303, the non-federal entity (i.e., the Center) must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations and terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR §200.214, the non-federal entity is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition – During the 2022 audit, the predecessor auditor noted several cases in which the Organization did not perform, or did not maintain proper support to demonstrate that it performed checks via SAM.gov to ensure that potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be excluded by the U.S. Government. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that suspension and debarment was being performed prior to entering into contracts with vendors or contractors/consultants. Effect or potential effect – The Organization is exposed to an increased risk that future noncompliance could occur by entering into transactions with vendors, contractors, or consultants that are suspended and debarred. Questioned costs – None Context – The Organization failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature. Identification as a repeat finding, if applicable – Is a repeat finding (2022-010) Recommendation – We recommend the Organization implement internal controls to ensure that all vendors, contractors, and consultants are screened for suspension and debarment prior to entering into any executed contract. We further recommend that a policy be formalized and implemented that requires an annual screening of any current vendors, contractors, or consultants as well. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
Information on the federal program – All federal programs Criteria or specific requirement – As stated in 2 CFR §200.303, the non-federal entity (i.e., the Center) must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations and terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR §200.214, the non-federal entity is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition – During the 2022 audit, the predecessor auditor noted several cases in which the Organization did not perform, or did not maintain proper support to demonstrate that it performed checks via SAM.gov to ensure that potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be excluded by the U.S. Government. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that suspension and debarment was being performed prior to entering into contracts with vendors or contractors/consultants. Effect or potential effect – The Organization is exposed to an increased risk that future noncompliance could occur by entering into transactions with vendors, contractors, or consultants that are suspended and debarred. Questioned costs – None Context – The Organization failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature. Identification as a repeat finding, if applicable – Is a repeat finding (2022-010) Recommendation – We recommend the Organization implement internal controls to ensure that all vendors, contractors, and consultants are screened for suspension and debarment prior to entering into any executed contract. We further recommend that a policy be formalized and implemented that requires an annual screening of any current vendors, contractors, or consultants as well. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
Information on the federal program – All federal programs Criteria or specific requirement – As stated in 2 CFR §200.303, the non-federal entity (i.e., the Center) must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations and terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR §200.214, the non-federal entity is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition – During the 2022 audit, the predecessor auditor noted several cases in which the Organization did not perform, or did not maintain proper support to demonstrate that it performed checks via SAM.gov to ensure that potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be excluded by the U.S. Government. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that suspension and debarment was being performed prior to entering into contracts with vendors or contractors/consultants. Effect or potential effect – The Organization is exposed to an increased risk that future noncompliance could occur by entering into transactions with vendors, contractors, or consultants that are suspended and debarred. Questioned costs – None Context – The Organization failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature. Identification as a repeat finding, if applicable – Is a repeat finding (2022-010) Recommendation – We recommend the Organization implement internal controls to ensure that all vendors, contractors, and consultants are screened for suspension and debarment prior to entering into any executed contract. We further recommend that a policy be formalized and implemented that requires an annual screening of any current vendors, contractors, or consultants as well. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
Information on the federal program – All federal programs Criteria or specific requirement – As stated in 2 CFR §200.303, the non-federal entity (i.e., the Center) must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations and terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR §200.214, the non-federal entity is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition – During the 2022 audit, the predecessor auditor noted several cases in which the Organization did not perform, or did not maintain proper support to demonstrate that it performed checks via SAM.gov to ensure that potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be excluded by the U.S. Government. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that suspension and debarment was being performed prior to entering into contracts with vendors or contractors/consultants. Effect or potential effect – The Organization is exposed to an increased risk that future noncompliance could occur by entering into transactions with vendors, contractors, or consultants that are suspended and debarred. Questioned costs – None Context – The Organization failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature. Identification as a repeat finding, if applicable – Is a repeat finding (2022-010) Recommendation – We recommend the Organization implement internal controls to ensure that all vendors, contractors, and consultants are screened for suspension and debarment prior to entering into any executed contract. We further recommend that a policy be formalized and implemented that requires an annual screening of any current vendors, contractors, or consultants as well. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
Information on the federal program – All federal programs Criteria or specific requirement – As stated in 2 CFR §200.303, the non-federal entity (i.e., the Center) must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations and terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR §200.214, the non-federal entity is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition – During the 2022 audit, the predecessor auditor noted several cases in which the Organization did not perform, or did not maintain proper support to demonstrate that it performed checks via SAM.gov to ensure that potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be excluded by the U.S. Government. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that suspension and debarment was being performed prior to entering into contracts with vendors or contractors/consultants. Effect or potential effect – The Organization is exposed to an increased risk that future noncompliance could occur by entering into transactions with vendors, contractors, or consultants that are suspended and debarred. Questioned costs – None Context – The Organization failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature. Identification as a repeat finding, if applicable – Is a repeat finding (2022-010) Recommendation – We recommend the Organization implement internal controls to ensure that all vendors, contractors, and consultants are screened for suspension and debarment prior to entering into any executed contract. We further recommend that a policy be formalized and implemented that requires an annual screening of any current vendors, contractors, or consultants as well. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
AL number: 10.561 AL title: Supplemental Nutrition Assistance Program Award term: October 29, 2021 through September 30, 2024 Name of federal agency: U.S. Department of Agriculture Name of pass-through entity: Colorado Department of Human Services Repeat finding: Yes - 2022-002 & 2022-003 Criteria: The Code of Federal Regulations 2 CFR 200.3 l 8(a) states, "the non- Federal entity must have and use document procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward." In addition, per the Code of Federal Regulations 2 CFR 200.214, non- Federal entities are subject to the non-procurement debarment and suspension regulations. The regulations restrict awards, subawards, and contracts with certain- parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: During our testing, we noted the Organization had not adopted a procurement policy and no procurement procedures were performed in selecting contractors. Cause: Procurement policies and procedures were not adopted by the Organization. Possible effect: The Organization may not have received a competitive bid for services, and may have engaged a suspended or debarred contractor. Questioned cost: None Recommendation: We recommend the Organization implement necessary internal controls to ensure a competitive bid process is performed and all vendors are reviewed for suspension and debarment, prior to entering into contracts utilizing federal awards. These internal controls should also include a conflict-of- interest clause with all vendors within contract language. Views of responsible officials: Management recruited a procurement officer in December 2024 to design and implement best practice procurement processes effective the first quarter 2025. Procurement policies will ensure full compliance with Federal and State requirements. Procurement policies will incorporate clearly defined procedures around all contractors ensuring appropriate selection processes and contractual terms. Anticipated completion date: March 31, 2025.
FINDING 2023-003 Subject: COVID-19 - State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): 2023 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Suspension and Debarment Prior to entering into subawards and covered transactions with the COVID-19 - State and Local Fiscal Recovery Funds (SLFRF) award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. The City did not have any policies or procedures in place related to the SLFRF suspension and debarment requirements. A population of four covered transactions totaling $1,301,367 that equaled or exceeded $25,000 paid from SLFRF funds were identified. All four covered transactions were selected for testing. For each of the four transactions, the City did not verify the vendors' suspension or debarment status prior to payment due to the City not having any policies or procedures in place to verify that contractors were neither suspended nor debarred or otherwise excluded or disqualified from participating in federal assistance programs or activities. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.214 states: "Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause The City did not implement its Corrective Action Plan from 2021 and was unable to provide documentation to demonstrate it had policies or procedures in place to verify suspension and debarment status for covered transactions it intends to pay with federal funds. The City was unable to provide documentation to demonstrate they had properly verified that contractors were neither suspended nor debarred or otherwise excluded or disqualified from participating in federal assistance programs or activities. Effect Without the proper implementation of an effectively designed system of internal controls, the City cannot ensure that contractors paid with federal funds are eligible to participate in federal programs. Any program funds the City used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Questioned Costs There were no questioned costs identified. Recommendation We recommend that management of the City design and implement a system of internal controls to ensure that all contractors that are paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before entering into contracts. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Information on Federal Programs: 93.083 – Centers for Disease Control and Prevention: Prevention of Disease, Disability, and Death through Immunization & Control of Respiratory & Related Diseases. Criteria or Specific Requirements: According to 2 CFR §200.303, the non-Federal entity must: establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Integrated Framework, issued by COSO. Additionally, according to 2 CFR §200.214, the non-Federal entity is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: During our audit, we noted that ATS did not perform checks via SAM.gov to ensure that potential contractors or consultants were not suspended or debarred. Cause: Management did not have internal control procedures in place to ensure that suspension and debarment checks were being performed prior to entering into contracts with contractors and consultants. Effect: The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be suspended or disbarred by the U.S. Government. Perspective: ATS established a new process where a debarment certification representation paragraph is automatically included on all the contractor agreements. ATS also issued contract modifications which included the debarment certification for all contracts signed prior to the change. Within a random sample of 24 disbursements, 17 disbursements to 3 contractors would have required compliance with the suspension and debarment check. Questioned Costs: Questioned costs were not identified. Repeat Finding: Not applicable. Recommendation: ATS should continue including the debarment certification paragraph on all new contracts to ensure compliance with the Uniform Guidance going forward.
FINDING 2023-004 Subject: Drinking Water State Revolving Fund (DWSRF) Cluster - Procurement and Suspension and Debarment Federal Agency: Environmental Protection Agency Federal Program: Drinking Water State Revolving Fund Assistance Listings Number: 66.468 Federal Award Number and Year (or Other Identifying Number): DW23150901 Pass-Through Entity: Indiana Finance Authority Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not designed or implemented at the City to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement - Policy The City had not established a purchasing policy that reflected applicable state laws and regulations, including procedures to avoid the acquisition of unnecessary or duplicative items and procedures to ensure that all solicitations incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Additionally, the City did not maintain a policy that prohibits the use of statutorily or administratively imposed state, local, or tribal geographical preferences in evaluation of bids or proposals. INDIANA STATE BOARD OF ACCOUNTS 22 CITY OF LOGANSPORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Procurement - Small Purchases The City expended federal funds to pay 12 separate vendors to provide goods and services for the duration of the City's Lead Service Line Replacement project. A population of 5 vendors had aggregated expenditures for the audit period that were less than the simplified acquisition threshold of $150,000 but exceeded the $10,000 micro-purchase threshold. All 5 vendors were tested; for 2 of the 5 vendors, the City was unable to provide any documentation that the procurement method used was appropriate or that the procurement provided full and open competition or rationale to support the determination to limit competition. The history of the procurement, including rationale for the method of procurement, selection of the vendor, and the basis for the price, was not adequately documented. Suspension and Debarment Prior to entering into subawards and covered transactions with award funds, recipients are required to verify that vendors are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. Due to the agreement with the Indiana Finance Authority (IFA), the City was not required to perform testing over suspension and debarment for a majority of the vendors used; however, several drawdowns from the State Revolving Funds (SRF) program were used to reimburse the City for payments made to specific vendors. The vendors paid directly by the City were not included in the IFA's procedures for checking suspension and debarment, therefore, the City was obligated to meet the requirement. The City did not maintain a set of procedures for checking suspension and debarment status of vendors for expenditures related to the SRF awards. A total of two vendors paid directly by the City exceeded the suspension and debarment threshold of $25,000 and were subject to testing. No documentation to show that suspension and debarment was verified prior to entering into the contract could be provided for either vendor. The lack of internal controls and noncompliance was a systemic issue 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 23 CITY OF LOGANSPORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases– (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." 2 CFR 180.300 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 SAM.gov Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." 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." 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 nonfederal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327." INDIANA STATE BOARD OF ACCOUNTS 24 CITY OF LOGANSPORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.318(d) states: "The non-Federal entity's procedures must avoid acquisition of unnecessary or duplicative items. Consideration should be given to consolidating or breaking out procurements to obtain a more economical purchase. Where appropriate, an analysis will be made of lease versus purchase alternatives, and any other appropriate analysis to determine the most economical approach." 2 CFR 200.319(c) states: "The non-Federal entity must conduct procurements in a manner that prohibits the use of statutorily or administratively imposed state, local, or tribal geographical preferences in the evaluation of bids or proposals, except in those cases where applicable Federal statutes expressly mandate or encourage geographic preference. Nothing in this section preempts state licensing laws. When contracting for architectural and engineering (A/E) services, geographic location may be a selection criterion provided its application leaves an appropriate number of qualified firms, given the nature and size of the project, to compete for the contract." 2 CFR 200.319(d) states: "The non-Federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Detailed product specifications should be avoided if at all possible. When it is impractical or uneconomical to make a clear and accurate description of the technical requirements, a 'brand name or equivalent' description may be used as a means to define the performance or other salient requirements of procurement. The specific features of the named brand which must be met by offers must be clearly stated; and (2) Identify all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals." Cause The City did not maintain a procurement policy that would demonstrate the appropriate procedures to be followed when procuring with federal funding and were not aware of the need to follow federal guidelines for procurement or suspension and debarment for expenditures associated with the SRF awards. Effect Without a proper system of internal controls in place that operated effectively, noncompliance remained undetected. As a result, proper procurement procedures were not adhered to for all vendors. Without following the required methods for procurement, the City could be overpaying for services or providing federal funds to an entity that is suspended or debarred. 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 funds to the City. INDIANA STATE BOARD OF ACCOUNTS 25 CITY OF LOGANSPORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that the City's management establish a proper system of internal controls to ensure expenditures made from federal awards use the appropriate procurement method and retain the documentation to support the procurement methods used in order to ensure compliance with the terms and conditions of the federal award and ensure that vendors paid from federal funds are neither suspended nor debarred. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Information on the federal program: Subject: Coronavirus State and Local Fiscal Recovery Funds – Internal Controls and Compliance Federal Agency: Department of the Treasury Federal Program: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Entity: Indiana Finance Authority Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Noncompliance Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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 section 200.303 states in part: "The non-Federal entity must use one of the following methods of procurement… (b) Simplified acquisition thresholds. The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations. Entities must obtain price or rate quotations from an adequate number of qualified sources to ensure full and open competition. In accordance with 2 CFR 200.214 and the government-wide requirements in 2 CFR Part 180, non-Federal entities are prohibited from contracting with or making subawards to parties that are suspended, debarred, or otherwise excluded from federal programs. This requirement applies to all contracts and procurements under federal awards, regardless of dollar amount, including those conducted under simplified acquisition procedures. Verification must be performed by checking the System for Award management (SAM.gov) or obtaining a written certification from the vendor. Condition: An effective internal control system was not in place at the District in order to ensure compliance with requirements related to the grant agreement and the simplified acquisitions procurement method of the Procurement and Suspension and Debarment compliance requirement. Cause: The District's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the District at risk of noncompliance with the grant agreement and the compliance requirements. Questioned Costs: There were no questioned costs identified. Context: There were two contracts subject to procurement and suspension and debarment during the year. For both procurements, the District could only provide final signed contracts and did not have evidence of the full bid process. For the first selection, the District provided the request for proposal but did not provide all bids that were received or a scoring rubric to support why the District selected the vendor. For the second selection, the request for proposal, bids received, and scoring rubric were not provided. Additionally, evidence of a suspension and debarment check for both selections was not available. The District did not have a formal procurement policy documented. Identification as a repeat finding: No Recommendation: We recommend that the District’s management establish controls related to the procurement process. The District should implement a formal procurement and suspension and debarment policy that states the process that is required for procurements based on the procurement amount. The policy should outline the requirement for a request for proposal, number of bids required, scoring rubric, and suspension and debarment check. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Program Information: Assistance Listing #: 93.445 U.S. Department of Health and Human Services I.H.S. Water Tank Replacement Award Numbers: PH12-U35, RN21-15 Award Periods: 7/29/2021-7/29/2025 Criteria: Per 2 CFR section 180.300 and 2 CFR section 200.214, non-federal entities must not enter into covered transactions with parties that are suspended or debarred. Verification must be performed by checking the excluded parties list in the System for Award Management (SAM.gov) or by obtaining a certification from the vendor, and this verification must be documented and retained as part of the procurement record. Additionally, 2 CFR 200.303 requires non-federal entities to establish and maintain effective internal controls over federal awards, including compliance with federal statutes, regulations, and the terms and conditions of the award, which encompasses the requirement to verify and document vendor eligibility. Condition/Context: During testing we noted the following: For 1 of 1 vendors tested, the Tribe did not maintain documentation demonstrating that the vendor was verified as not federally suspended or debarred prior to entering into the contract. [ X ] Compliance Finding [ X ] Significant Deficiency [ ] Material Weakness Cause: The Tribe’s procedures for suspension and debarment verification were not consistently followed or documentation was not retained. Staff turnover and inconsistent application of procurement documentation practices contributed to the exception. Effect: Without documented verification, the Tribe cannot demonstrate that the vendor was eligible to receive federal funds at the time the contract was awarded. This increases the risk of noncompliance with federal procurement requirements and could result in unallowable costs if a vendor were suspended or debarred. Questioned Costs: None noted. The vendor was not found to be suspended or debarred; the issue relates solely to lack of documentation. Repeat Finding: No. Recommendation: We recommend the Tribe strengthen its procurement procedures to ensure suspension and debarment verification is documented for all vendors prior to contract award. This may include requiring a printed SAM.gov verification, a signed vendor certification, or a standard contract clause, and ensuring the documentation is retained in the procurement file. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
2023-002 – Procurement, Suspension, and Debarment Program: ALN# 47.070 = Computer and Information Science and Engineering Federal Agency: National Science Foundation Federal Award Identification Number(s): 2216614, 2122756 Period: Year Ended December 31, 2023 Criteria: Under 2 CFR 200.319, and 2 CFR 200.320, non-federal entities must maintain written procurement policies and internal controls to ensure compliance with Federal requirements, including suspension and debarment checks. Under 2 CFR 200.214, non-federal entities must not enter into contracts with parties that are suspended or debarred. Condition: During our review of procurement policies, we noted that the Organization did not have written procedures addressing procurement suspension and debarment requirements and the Organization was unable to furnish documentation that procurement, suspension, and debarment procedures took place for all contracts selected for testing. Cause: The Organization has not developed formal written procurement, suspension, and debarment policies and procedures. Effect: Without written polices and procedures, the Organization is at increased risk of: • Failing to verify vendor eligibility. • Contracting with suspended or debarred entities. • Procurements conducted in a manner that fails to provide full and open competition. Questioned Costs: No questioned costs identified. Context: This sample was not intended to be, and was not, a statistically valid sample. Repeat Finding: No Recommendation: We recommend that the Organization: • Develop and implement written procurement policies that clearly outline procedures for suspension and debarment verification. • Require and document evidence of compliance for all covered procurement transactions • Train staff on the updated procedures. • Periodically review procurement files to ensure consistent adherence. Views of Responsible Officials: See management corrective action plan attached.
2023-002 – PROCUREMENT, SUSPENSION, AND DEBARMENT COMPLIANCE Type of Finding: (F) – Significant Deficiency in Internal Control Over Compliance of Federal Awards Funding Agency: National Endowment for the Humanities Title: State Humanities Program and Humanities Councils American Rescue Plan Funding AL #: 45.129 Award #s: ZSO-283159-21 ARP, SO-268668-20 and SO-289867-23 Award Period: November 1, 2022 – October 31, 2023 Questioned Costs: None Statement of Condition The Council did not consistently follow the suspension and debarment policy and did not keep backup documentation for some of the procurement transactions over $10,000. Context The Council purchased goods and services exceeding $25,000 and documentation was not available to substantiate that the vendors were screened for suspension and debarment prior to expenditure. Note: All the vendors were screened during the audit and none of them had any exclusions. Also, the Council had documentation for all 6 sub-awardees tested (non-procurement clause of the award.) Criteria Per 2 CFR 200.320(a)(2)(i) 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 ($10,000 in fiscal year 2023) but does not exceed the simplified acquisition threshold ($249,999 in fiscal year 2023). 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. Additionally, 2 CFR 200.214 requires vendors awarded contracts expected to equal or exceed $25,000 to be checked for suspension and debarment via the System for Award Management Exclusions (SAM.gov). According to §180.300 of Subpart C–Responsibilities of Participants Regarding Transactions Doing Business with Other Persons of 2 CFR Part 180, when the grantee enters into a covered transaction with another person at the next lower tier, they must verify that the person with whom they intend to do business is not excluded or disqualified. This can be done by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. While the Council has policies in place and links in the policies to the appropriate CFRs, it seems that the policies might need to be updated to specify the thresholds for debarment and suspension checks for vendor and the updated threshold for micro-purchasing. Cause The Council had turnover in employment for staff in charge of obtaining 3 bids and documentation could not be located. The policies might need to be updated with the new micro-purchasing thresholds and clearly specify the thresholds for vendor check-ups in sam.gov. Effect There is the risk that the Council could contract with a party that is suspended or debarred. The Council is not following consistently the policies. Recommendation Design and implement internal controls to ensure that contracts expected to equal or exceed $25,000, or meet certain other criteria as specified in 2 CFR 180.220, are checked for suspension and debarment. Improve the policies and procedures manual by updating the thresholds for micro-purchases and small purchases, and adding explicit reference to the $25,000 threshold for vendors under procurement regulations regarding debarment and suspension. View of Responsible Official and Corrective Action Plan: NMHC management is in agreement with this finding. Management has reviewed the existing federal procurement policies and procedures found in 2 CFR 200 and will enforce the policies and procedures to ensure existing suspension and debarment policies and procedures are followed. NMHC’s Executive Director or Deputy Director will review all potential purchases and contracts for compliance with the policies. The Executive Director or Deputy Director will also provide an additional check by reviewing all vendors paid $25,000 or more against the SAM website. Proof of the SAM website review and approval will be maintained in each vendor file. All future contracts of any size will also include a clause or condition to the covered transaction with the contractor/vendor that must be signed by that person. The Executive Director will update the existing NMHC policies and procedures manual by adding the new thresholds for micro-purchases and small purchases. The Executive Director will also add explicit reference to the $25,000 threshold for vendors under procurement regulations regarding debarment and suspension. Corrective Action Plan Timeline: Management anticipates the above corrective action plan to be fully implemented by July 31, 2024. Designation Of Employee Position Responsible For Meeting Deadline: Personnel responsible for ensuring implementation include the Executive Director and Deputy Director.
2023-002 – PROCUREMENT, SUSPENSION, AND DEBARMENT COMPLIANCE Type of Finding: (F) – Significant Deficiency in Internal Control Over Compliance of Federal Awards Funding Agency: National Endowment for the Humanities Title: State Humanities Program and Humanities Councils American Rescue Plan Funding AL #: 45.129 Award #s: ZSO-283159-21 ARP, SO-268668-20 and SO-289867-23 Award Period: November 1, 2022 – October 31, 2023 Questioned Costs: None Statement of Condition The Council did not consistently follow the suspension and debarment policy and did not keep backup documentation for some of the procurement transactions over $10,000. Context The Council purchased goods and services exceeding $25,000 and documentation was not available to substantiate that the vendors were screened for suspension and debarment prior to expenditure. Note: All the vendors were screened during the audit and none of them had any exclusions. Also, the Council had documentation for all 6 sub-awardees tested (non-procurement clause of the award.) Criteria Per 2 CFR 200.320(a)(2)(i) 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 ($10,000 in fiscal year 2023) but does not exceed the simplified acquisition threshold ($249,999 in fiscal year 2023). 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. Additionally, 2 CFR 200.214 requires vendors awarded contracts expected to equal or exceed $25,000 to be checked for suspension and debarment via the System for Award Management Exclusions (SAM.gov). According to §180.300 of Subpart C–Responsibilities of Participants Regarding Transactions Doing Business with Other Persons of 2 CFR Part 180, when the grantee enters into a covered transaction with another person at the next lower tier, they must verify that the person with whom they intend to do business is not excluded or disqualified. This can be done by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. While the Council has policies in place and links in the policies to the appropriate CFRs, it seems that the policies might need to be updated to specify the thresholds for debarment and suspension checks for vendor and the updated threshold for micro-purchasing. Cause The Council had turnover in employment for staff in charge of obtaining 3 bids and documentation could not be located. The policies might need to be updated with the new micro-purchasing thresholds and clearly specify the thresholds for vendor check-ups in sam.gov. Effect There is the risk that the Council could contract with a party that is suspended or debarred. The Council is not following consistently the policies. Recommendation Design and implement internal controls to ensure that contracts expected to equal or exceed $25,000, or meet certain other criteria as specified in 2 CFR 180.220, are checked for suspension and debarment. Improve the policies and procedures manual by updating the thresholds for micro-purchases and small purchases, and adding explicit reference to the $25,000 threshold for vendors under procurement regulations regarding debarment and suspension. View of Responsible Official and Corrective Action Plan: NMHC management is in agreement with this finding. Management has reviewed the existing federal procurement policies and procedures found in 2 CFR 200 and will enforce the policies and procedures to ensure existing suspension and debarment policies and procedures are followed. NMHC’s Executive Director or Deputy Director will review all potential purchases and contracts for compliance with the policies. The Executive Director or Deputy Director will also provide an additional check by reviewing all vendors paid $25,000 or more against the SAM website. Proof of the SAM website review and approval will be maintained in each vendor file. All future contracts of any size will also include a clause or condition to the covered transaction with the contractor/vendor that must be signed by that person. The Executive Director will update the existing NMHC policies and procedures manual by adding the new thresholds for micro-purchases and small purchases. The Executive Director will also add explicit reference to the $25,000 threshold for vendors under procurement regulations regarding debarment and suspension. Corrective Action Plan Timeline: Management anticipates the above corrective action plan to be fully implemented by July 31, 2024. Designation Of Employee Position Responsible For Meeting Deadline: Personnel responsible for ensuring implementation include the Executive Director and Deputy Director.
2023-002 – PROCUREMENT, SUSPENSION, AND DEBARMENT COMPLIANCE Type of Finding: (F) – Significant Deficiency in Internal Control Over Compliance of Federal Awards Funding Agency: National Endowment for the Humanities Title: State Humanities Program and Humanities Councils American Rescue Plan Funding AL #: 45.129 Award #s: ZSO-283159-21 ARP, SO-268668-20 and SO-289867-23 Award Period: November 1, 2022 – October 31, 2023 Questioned Costs: None Statement of Condition The Council did not consistently follow the suspension and debarment policy and did not keep backup documentation for some of the procurement transactions over $10,000. Context The Council purchased goods and services exceeding $25,000 and documentation was not available to substantiate that the vendors were screened for suspension and debarment prior to expenditure. Note: All the vendors were screened during the audit and none of them had any exclusions. Also, the Council had documentation for all 6 sub-awardees tested (non-procurement clause of the award.) Criteria Per 2 CFR 200.320(a)(2)(i) 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 ($10,000 in fiscal year 2023) but does not exceed the simplified acquisition threshold ($249,999 in fiscal year 2023). 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. Additionally, 2 CFR 200.214 requires vendors awarded contracts expected to equal or exceed $25,000 to be checked for suspension and debarment via the System for Award Management Exclusions (SAM.gov). According to §180.300 of Subpart C–Responsibilities of Participants Regarding Transactions Doing Business with Other Persons of 2 CFR Part 180, when the grantee enters into a covered transaction with another person at the next lower tier, they must verify that the person with whom they intend to do business is not excluded or disqualified. This can be done by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. While the Council has policies in place and links in the policies to the appropriate CFRs, it seems that the policies might need to be updated to specify the thresholds for debarment and suspension checks for vendor and the updated threshold for micro-purchasing. Cause The Council had turnover in employment for staff in charge of obtaining 3 bids and documentation could not be located. The policies might need to be updated with the new micro-purchasing thresholds and clearly specify the thresholds for vendor check-ups in sam.gov. Effect There is the risk that the Council could contract with a party that is suspended or debarred. The Council is not following consistently the policies. Recommendation Design and implement internal controls to ensure that contracts expected to equal or exceed $25,000, or meet certain other criteria as specified in 2 CFR 180.220, are checked for suspension and debarment. Improve the policies and procedures manual by updating the thresholds for micro-purchases and small purchases, and adding explicit reference to the $25,000 threshold for vendors under procurement regulations regarding debarment and suspension. View of Responsible Official and Corrective Action Plan: NMHC management is in agreement with this finding. Management has reviewed the existing federal procurement policies and procedures found in 2 CFR 200 and will enforce the policies and procedures to ensure existing suspension and debarment policies and procedures are followed. NMHC’s Executive Director or Deputy Director will review all potential purchases and contracts for compliance with the policies. The Executive Director or Deputy Director will also provide an additional check by reviewing all vendors paid $25,000 or more against the SAM website. Proof of the SAM website review and approval will be maintained in each vendor file. All future contracts of any size will also include a clause or condition to the covered transaction with the contractor/vendor that must be signed by that person. The Executive Director will update the existing NMHC policies and procedures manual by adding the new thresholds for micro-purchases and small purchases. The Executive Director will also add explicit reference to the $25,000 threshold for vendors under procurement regulations regarding debarment and suspension. Corrective Action Plan Timeline: Management anticipates the above corrective action plan to be fully implemented by July 31, 2024. Designation Of Employee Position Responsible For Meeting Deadline: Personnel responsible for ensuring implementation include the Executive Director and Deputy Director.
2023-002 – PROCUREMENT, SUSPENSION, AND DEBARMENT COMPLIANCE Type of Finding: (F) – Significant Deficiency in Internal Control Over Compliance of Federal Awards Funding Agency: National Endowment for the Humanities Title: State Humanities Program and Humanities Councils American Rescue Plan Funding AL #: 45.129 Award #s: ZSO-283159-21 ARP, SO-268668-20 and SO-289867-23 Award Period: November 1, 2022 – October 31, 2023 Questioned Costs: None Statement of Condition The Council did not consistently follow the suspension and debarment policy and did not keep backup documentation for some of the procurement transactions over $10,000. Context The Council purchased goods and services exceeding $25,000 and documentation was not available to substantiate that the vendors were screened for suspension and debarment prior to expenditure. Note: All the vendors were screened during the audit and none of them had any exclusions. Also, the Council had documentation for all 6 sub-awardees tested (non-procurement clause of the award.) Criteria Per 2 CFR 200.320(a)(2)(i) 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 ($10,000 in fiscal year 2023) but does not exceed the simplified acquisition threshold ($249,999 in fiscal year 2023). 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. Additionally, 2 CFR 200.214 requires vendors awarded contracts expected to equal or exceed $25,000 to be checked for suspension and debarment via the System for Award Management Exclusions (SAM.gov). According to §180.300 of Subpart C–Responsibilities of Participants Regarding Transactions Doing Business with Other Persons of 2 CFR Part 180, when the grantee enters into a covered transaction with another person at the next lower tier, they must verify that the person with whom they intend to do business is not excluded or disqualified. This can be done by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. While the Council has policies in place and links in the policies to the appropriate CFRs, it seems that the policies might need to be updated to specify the thresholds for debarment and suspension checks for vendor and the updated threshold for micro-purchasing. Cause The Council had turnover in employment for staff in charge of obtaining 3 bids and documentation could not be located. The policies might need to be updated with the new micro-purchasing thresholds and clearly specify the thresholds for vendor check-ups in sam.gov. Effect There is the risk that the Council could contract with a party that is suspended or debarred. The Council is not following consistently the policies. Recommendation Design and implement internal controls to ensure that contracts expected to equal or exceed $25,000, or meet certain other criteria as specified in 2 CFR 180.220, are checked for suspension and debarment. Improve the policies and procedures manual by updating the thresholds for micro-purchases and small purchases, and adding explicit reference to the $25,000 threshold for vendors under procurement regulations regarding debarment and suspension. View of Responsible Official and Corrective Action Plan: NMHC management is in agreement with this finding. Management has reviewed the existing federal procurement policies and procedures found in 2 CFR 200 and will enforce the policies and procedures to ensure existing suspension and debarment policies and procedures are followed. NMHC’s Executive Director or Deputy Director will review all potential purchases and contracts for compliance with the policies. The Executive Director or Deputy Director will also provide an additional check by reviewing all vendors paid $25,000 or more against the SAM website. Proof of the SAM website review and approval will be maintained in each vendor file. All future contracts of any size will also include a clause or condition to the covered transaction with the contractor/vendor that must be signed by that person. The Executive Director will update the existing NMHC policies and procedures manual by adding the new thresholds for micro-purchases and small purchases. The Executive Director will also add explicit reference to the $25,000 threshold for vendors under procurement regulations regarding debarment and suspension. Corrective Action Plan Timeline: Management anticipates the above corrective action plan to be fully implemented by July 31, 2024. Designation Of Employee Position Responsible For Meeting Deadline: Personnel responsible for ensuring implementation include the Executive Director and Deputy Director.
2023-002 – PROCUREMENT, SUSPENSION, AND DEBARMENT COMPLIANCE Type of Finding: (F) – Significant Deficiency in Internal Control Over Compliance of Federal Awards Funding Agency: National Endowment for the Humanities Title: State Humanities Program and Humanities Councils American Rescue Plan Funding AL #: 45.129 Award #s: ZSO-283159-21 ARP, SO-268668-20 and SO-289867-23 Award Period: November 1, 2022 – October 31, 2023 Questioned Costs: None Statement of Condition The Council did not consistently follow the suspension and debarment policy and did not keep backup documentation for some of the procurement transactions over $10,000. Context The Council purchased goods and services exceeding $25,000 and documentation was not available to substantiate that the vendors were screened for suspension and debarment prior to expenditure. Note: All the vendors were screened during the audit and none of them had any exclusions. Also, the Council had documentation for all 6 sub-awardees tested (non-procurement clause of the award.) Criteria Per 2 CFR 200.320(a)(2)(i) 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 ($10,000 in fiscal year 2023) but does not exceed the simplified acquisition threshold ($249,999 in fiscal year 2023). 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. Additionally, 2 CFR 200.214 requires vendors awarded contracts expected to equal or exceed $25,000 to be checked for suspension and debarment via the System for Award Management Exclusions (SAM.gov). According to §180.300 of Subpart C–Responsibilities of Participants Regarding Transactions Doing Business with Other Persons of 2 CFR Part 180, when the grantee enters into a covered transaction with another person at the next lower tier, they must verify that the person with whom they intend to do business is not excluded or disqualified. This can be done by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. While the Council has policies in place and links in the policies to the appropriate CFRs, it seems that the policies might need to be updated to specify the thresholds for debarment and suspension checks for vendor and the updated threshold for micro-purchasing. Cause The Council had turnover in employment for staff in charge of obtaining 3 bids and documentation could not be located. The policies might need to be updated with the new micro-purchasing thresholds and clearly specify the thresholds for vendor check-ups in sam.gov. Effect There is the risk that the Council could contract with a party that is suspended or debarred. The Council is not following consistently the policies. Recommendation Design and implement internal controls to ensure that contracts expected to equal or exceed $25,000, or meet certain other criteria as specified in 2 CFR 180.220, are checked for suspension and debarment. Improve the policies and procedures manual by updating the thresholds for micro-purchases and small purchases, and adding explicit reference to the $25,000 threshold for vendors under procurement regulations regarding debarment and suspension. View of Responsible Official and Corrective Action Plan: NMHC management is in agreement with this finding. Management has reviewed the existing federal procurement policies and procedures found in 2 CFR 200 and will enforce the policies and procedures to ensure existing suspension and debarment policies and procedures are followed. NMHC’s Executive Director or Deputy Director will review all potential purchases and contracts for compliance with the policies. The Executive Director or Deputy Director will also provide an additional check by reviewing all vendors paid $25,000 or more against the SAM website. Proof of the SAM website review and approval will be maintained in each vendor file. All future contracts of any size will also include a clause or condition to the covered transaction with the contractor/vendor that must be signed by that person. The Executive Director will update the existing NMHC policies and procedures manual by adding the new thresholds for micro-purchases and small purchases. The Executive Director will also add explicit reference to the $25,000 threshold for vendors under procurement regulations regarding debarment and suspension. Corrective Action Plan Timeline: Management anticipates the above corrective action plan to be fully implemented by July 31, 2024. Designation Of Employee Position Responsible For Meeting Deadline: Personnel responsible for ensuring implementation include the Executive Director and Deputy Director.
2023-002 – PROCUREMENT, SUSPENSION, AND DEBARMENT COMPLIANCE Type of Finding: (F) – Significant Deficiency in Internal Control Over Compliance of Federal Awards Funding Agency: National Endowment for the Humanities Title: State Humanities Program and Humanities Councils American Rescue Plan Funding AL #: 45.129 Award #s: ZSO-283159-21 ARP, SO-268668-20 and SO-289867-23 Award Period: November 1, 2022 – October 31, 2023 Questioned Costs: None Statement of Condition The Council did not consistently follow the suspension and debarment policy and did not keep backup documentation for some of the procurement transactions over $10,000. Context The Council purchased goods and services exceeding $25,000 and documentation was not available to substantiate that the vendors were screened for suspension and debarment prior to expenditure. Note: All the vendors were screened during the audit and none of them had any exclusions. Also, the Council had documentation for all 6 sub-awardees tested (non-procurement clause of the award.) Criteria Per 2 CFR 200.320(a)(2)(i) 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 ($10,000 in fiscal year 2023) but does not exceed the simplified acquisition threshold ($249,999 in fiscal year 2023). 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. Additionally, 2 CFR 200.214 requires vendors awarded contracts expected to equal or exceed $25,000 to be checked for suspension and debarment via the System for Award Management Exclusions (SAM.gov). According to §180.300 of Subpart C–Responsibilities of Participants Regarding Transactions Doing Business with Other Persons of 2 CFR Part 180, when the grantee enters into a covered transaction with another person at the next lower tier, they must verify that the person with whom they intend to do business is not excluded or disqualified. This can be done by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. While the Council has policies in place and links in the policies to the appropriate CFRs, it seems that the policies might need to be updated to specify the thresholds for debarment and suspension checks for vendor and the updated threshold for micro-purchasing. Cause The Council had turnover in employment for staff in charge of obtaining 3 bids and documentation could not be located. The policies might need to be updated with the new micro-purchasing thresholds and clearly specify the thresholds for vendor check-ups in sam.gov. Effect There is the risk that the Council could contract with a party that is suspended or debarred. The Council is not following consistently the policies. Recommendation Design and implement internal controls to ensure that contracts expected to equal or exceed $25,000, or meet certain other criteria as specified in 2 CFR 180.220, are checked for suspension and debarment. Improve the policies and procedures manual by updating the thresholds for micro-purchases and small purchases, and adding explicit reference to the $25,000 threshold for vendors under procurement regulations regarding debarment and suspension. View of Responsible Official and Corrective Action Plan: NMHC management is in agreement with this finding. Management has reviewed the existing federal procurement policies and procedures found in 2 CFR 200 and will enforce the policies and procedures to ensure existing suspension and debarment policies and procedures are followed. NMHC’s Executive Director or Deputy Director will review all potential purchases and contracts for compliance with the policies. The Executive Director or Deputy Director will also provide an additional check by reviewing all vendors paid $25,000 or more against the SAM website. Proof of the SAM website review and approval will be maintained in each vendor file. All future contracts of any size will also include a clause or condition to the covered transaction with the contractor/vendor that must be signed by that person. The Executive Director will update the existing NMHC policies and procedures manual by adding the new thresholds for micro-purchases and small purchases. The Executive Director will also add explicit reference to the $25,000 threshold for vendors under procurement regulations regarding debarment and suspension. Corrective Action Plan Timeline: Management anticipates the above corrective action plan to be fully implemented by July 31, 2024. Designation Of Employee Position Responsible For Meeting Deadline: Personnel responsible for ensuring implementation include the Executive Director and Deputy Director.
Space Operations Assistance Listing Number: 43.007 Federal Award ID Number: 80JSC018M0005 National Aeronautics and Space Administration 2023 Funding Criteria: Competitive Procurement: 2 CFR Section 200.320 and 48 CFR section 52.244-5 sets forth the requirements for acquisition contracts awarded to vendors including the requirement to obtain price or rate quotations from an adequate number of qualified sources and the circumstances in which noncompetitive procurement methods can be used. Also, CASIS’s procurement policy states that it is in both CASIS and NASA’s interest to compete when it makes sense regardless of the threshold and can be achieved by obtaining three quotes, i.e., comparative shopping. A minimum of 3 vendors are required to demonstrate competition. CASIS may solicit a proposal from only one source in circumstances where one or more of the following conditions apply (FAR Subpart 6.3): (i) The item or service is available only from a single source. (ii) An unanticipated exigency or emergency exists that requires the equipment, materials, supplies or services to be procured immediately. (iii) NASA specifically authorizes the use of noncompetitive proposals (directed source). (iv) After consultation with a number of sources, competition is determined inadequate. (v) The vendor is listed as a sole source provider under the Cooperative Agreement. Vendor disbursements: 2 CFR section 200.214 and 2 CFR section 180.300 require non-federal entities restrict awards, subawards, and contracts with parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Internal controls: 2 CFR 200.303 provides that non-Federal entities must establish and maintain effective internal controls to provide reasonable assurance of compliance with the Uniform Guidance. - 10 - Condition: Competitive quotes were not obtained for one expense, and sole source determination was not documented for another expense. In addition, for one vendor there was no check performed to ensure it was not debarred prior to the purchase approval. Cause: For one expense, CASIS did not obtain competitive quotes as required per their policy. CASIS had used the venue for meetings in the past, and did not obtain additional quotes for this event. This is a control and compliance deficiency. For another expense tested in the sample, no documentation of this being a sole source purchase prior to expending the funds. This expense is for a membership and essentially has a single provider. This is a control deficiency, but not a compliance issue. For one vendor, CASIS did not perform SAM check prior to approving the purchase. Vendor search at SAM.gov, subsequent to year end, revealed that the vendor is not debarred. This is a control deficiency, but not a compliance issue. Effect: If CASIS cannot demonstrate that procurements were made with full and open competition, properly sole sourced, and vendors are not debarred, it can result in questioned costs and funds being returned to NASA. Questioned Costs: Known questioned costs of $17,967, and likely questioned costs of $25,293. Perspective: For open competition there were 2 out of 60 expenses selected that the control failed. There was one vendor out of 10 selected that the debarment check was not performed. Recommendation: Competitive quotes should be obtained and retained as specified in the procurement policy. Non-competitive procurement should be documented and approved prior to incurring expenses. Vendor debarment checks should be performed and documented prior to entering into covered transactions. Management Response: The audit uncovered a non-compliance with required competitive quotes for a procurement of meeting services which did not comply with CASIS policy. The predecessor management team had previously advised the responsible purchaser that these services did not require competitive quotes. This matter is also complicated by the fact that the procurements are not just for meeting space, logistics and meals, but also includes lodging, which is not subject to the three quote rule. Management acknowledges that this was a process escapement and provides for the following corrective action. Typically lodging expenses are included in the procurement because it results in discounts that are unavailable if not included. CASIS implemented a policy of requiring competitive quotes for purchases over $1,000 in the most recent revision of the procurement policy. This change was made to assure compliance with Federal Regulations. While the amount noted is within the limits established by Federal Micro- purchase regulations, it did not comply with internal policies as noted. Meeting space is a commonly used service that is highly competitive in pricing and most facilities charge competitive rates, but most of the time those quotes are not useable given the time of year, and more importantly the occupancy rate of the facility. Starting in 2024, we are requesting quotes from three facilities in the local area that will be valid for a period of one year. These rates will be updated manually and a single additional quote will be obtained to assure the “reasonableness” of the price. This process will represent an annual price survey that will satisfy the three quote rule of our procurement policy. For rental of facilities outside of the local area, we will obtain a minimum of three quotes as required by our procurement policy. Management also acknowledges the process escapement for SAM checks on new vendors. Our normal process is that annually, Finance performs a SAM check for all approved vendors. The agreement for Trust Factory came in late during the year resulting in this deficiency. When a new vendor is setup in our system, it will automatically trigger a SAM check.