Finding 2018 - 001 Procurement, Suspension & Debarment (I) Significant Deficiency in Internal Controls over Compliance Identification of the Federal Program: U.S. Department of Health and Human Services; Health Clinic Program Cluster; CFDA 93.224: 18H80CS31240. Criteria or Specific Requirement: Non-federal entities must follow the procurement standards set out at 2 CFR Sections 200.318 through 200.326. They must use their own documented procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statues and the procurement requirements identified in 2 CFR Part 200 as described above. Finding/Condition: The procurement policies and procedures were found lacking as to the bidding and retaining process. We could not locate certain files indicating that the procurement requirements had been followed. In addition, we could not locate certain files indicating the debarment procedures had been properly followed per the requirements. Cause: Management lack of time to establishing a policy and procedure regarding this requirement. Effect: The lack of policies and procedures in this area may cause the Clinic to be out of compliance with this procurement, suspension and debarment requirement. A lack of competitive bidding may overstate allowable costs and a lack of debarment procedures may allow debarred vendors in providing material, supplies and services. Questioned Cost: None Recommendation: The Clinic should establish sound policies and procedures which conform to federal requirements for procurement, suspension and debarment. Views of Responsible Officials and Corrective Action Plan: See corrective action plan.
Finding 2018-002 – Lack of Policies/Procedures & Documentation Related to Procurement/Suspension and Debarment (Material Weakness in Internal Controls over Compliance – Federal Program CFDA 10.766/10.780 Community Facilities Loans and Grants Cluster) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, £200.318 requires that the auditee must have and use documented procurement procedures for the purchase/acquisition of any property or services under a Federal award. These must include written standards of conduct covering conflicts of interest, consideration of the most economical purchase, rationale for the method of procurement, selection of contractors including whether they have been barred from doing business with the federal government, and the basis for the contract price. Also, £200.319 requires all procurement transactions be conducted in a manner that provides full and open competition, and develop specific procurement methods in compliance with £200.320, “Methods of procurement to be followed.” Condition and Context: The Organization has no documented procedures over the procurement process, contractor selection, or established methods in place to assure free and open competition as required by the Procurement Standards contained in the Uniform Guidance. Cause: Lack of understanding relating to the requirements of federal awards and loans considered to be financial assistance under the Uniform Guidance. Effect: Lack of documented controls over the Organization’s procurement process creates a material weakness in internal controls over compliance. Questioned Costs: None Recommendation: Management should become familiar with the Uniform Guidance, and in particular, the application section on Procurement, and seek additional training for those staff involved in all phases of the procurement process. Views of Responsible Officials and Planned Corrective Actions: We are creating a job description for a financial analyst. Part of this role will be to implement the recommendation, including development of bid specifications, participation in the selection of supplies and contractors, and monitoring/documenting results.
Finding 2018 - 001 Procurement, Suspension & Debarment (I) Significant Deficiency in Internal Controls over Compliance Identification of the Federal Program: U.S. Department of Health and Human Services; Health Clinic Program Cluster; CFDA 93.224: 18H80CS31240. Criteria or Specific Requirement: Non-federal entities must follow the procurement standards set out at 2 CFR Sections 200.318 through 200.326. They must use their own documented procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statues and the procurement requirements identified in 2 CFR Part 200 as described above. Finding/Condition: The procurement policies and procedures were found lacking as to the bidding and retaining process. We could not locate certain files indicating that the procurement requirements had been followed. In addition, we could not locate certain files indicating the debarment procedures had been properly followed per the requirements. Cause: Management lack of time to establishing a policy and procedure regarding this requirement. Effect: The lack of policies and procedures in this area may cause the Clinic to be out of compliance with this procurement, suspension and debarment requirement. A lack of competitive bidding may overstate allowable costs and a lack of debarment procedures may allow debarred vendors in providing material, supplies and services. Questioned Cost: None Recommendation: The Clinic should establish sound policies and procedures which conform to federal requirements for procurement, suspension and debarment. Views of Responsible Officials and Corrective Action Plan: See corrective action plan.
Finding 2018-002 – Lack of Policies/Procedures & Documentation Related to Procurement/Suspension and Debarment (Material Weakness in Internal Controls over Compliance – Federal Program CFDA 10.766/10.780 Community Facilities Loans and Grants Cluster) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, £200.318 requires that the auditee must have and use documented procurement procedures for the purchase/acquisition of any property or services under a Federal award. These must include written standards of conduct covering conflicts of interest, consideration of the most economical purchase, rationale for the method of procurement, selection of contractors including whether they have been barred from doing business with the federal government, and the basis for the contract price. Also, £200.319 requires all procurement transactions be conducted in a manner that provides full and open competition, and develop specific procurement methods in compliance with £200.320, “Methods of procurement to be followed.” Condition and Context: The Organization has no documented procedures over the procurement process, contractor selection, or established methods in place to assure free and open competition as required by the Procurement Standards contained in the Uniform Guidance. Cause: Lack of understanding relating to the requirements of federal awards and loans considered to be financial assistance under the Uniform Guidance. Effect: Lack of documented controls over the Organization’s procurement process creates a material weakness in internal controls over compliance. Questioned Costs: None Recommendation: Management should become familiar with the Uniform Guidance, and in particular, the application section on Procurement, and seek additional training for those staff involved in all phases of the procurement process. Views of Responsible Officials and Planned Corrective Actions: We are creating a job description for a financial analyst. Part of this role will be to implement the recommendation, including development of bid specifications, participation in the selection of supplies and contractors, and monitoring/documenting results.