Finding 1073282 (2023-002)

Federal agency: U.S. Department of Health and Human Services Federal program title: Health Centers Cluster Assistance Listing Number: 93.224/93.527 Award Period: Varying project and budget periods: 1/1/23 – 12/31/23, 4/1/21 – 3/31/23, 12/1/22 – 12/31/23, and 9/1/23 – 12/31/24 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Code of Federal Regulations section 200.320 states the non-Federal entity must have and use documented procurement procedures following specific requirements for different methods of procurement depending on size and type of purchase. Thresholds for these categories (micro-purchase, simplified acquisition threshold) refer to using the Federal Acquisition Regulations (FAR), unless a different threshold has been specifically approved. Specifically, under FAR multiple quotes are generally required for purchases over the micro-purchase threshold, or documentation should be maintained explaining why multiple quotes were not obtained. Condition: During our testing, there was one vendor tested in our sample that was above the micro-purchase threshold, but multiple quotes were not obtained, and documentation was not available or appropriate to support why noncompetitive procurement was followed. Questioned costs: None Context: During out testing, noted no proper documentation per the procurement policy. Vendor was utilized due to past work performed for the Organization and experience the vendor had with other similar organizations, but documentation should still be maintained when sole source procurement is utilized. Cause: The Organization did not follow the policy due to working with the vendor in the past and time constraints, however, did not maintain documentation as to why sole source procurement was utilized. Effect: The lack of documented procurement policies over these compliance requirements provides an opportunity for noncompliance. Repeat finding: No Recommendation: We recommend the Organization utilize a noncompetitive procurement justification form if following standard procurement procedures is not feasible. Views of responsible officials: There is no disagreement with the audit finding.