FAC Explorer

Finding 1076634 (2023-001)

Material Weakness Repeat Finding
Requirement
I
Questioned Costs
-
Year
2023
Accepted
2024-09-30
Audit: 323032
Organization: Nationwide Children's Hospital (OH)
Auditor: Ernst & Young

AI Summary

  • Core Issue: Nationwide Children’s Hospital lacks proper documentation and reconciliation processes for monthly suspension and debarment checks.
  • Impacted Requirements: This finding violates Section 200.303 regarding internal controls and Section 200.214 on suspension and debarment compliance.
  • Recommended Follow-Up: Implement a system to retain monthly documentation and establish a reconciliation process between vendor lists and third-party results.

Finding Text

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.

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

  • 500184 2023-001
    Material Weakness Repeat
  • 500185 2023-001
    Material Weakness Repeat
  • 500186 2023-001
    Material Weakness Repeat
  • 500187 2023-001
    Material Weakness Repeat
  • 500188 2023-001
    Material Weakness Repeat
  • 500189 2023-001
    Material Weakness Repeat
  • 500190 2023-001
    Material Weakness Repeat
  • 500191 2023-001
    Material Weakness Repeat
  • 500192 2023-001
    Material Weakness Repeat
  • 500193 2023-001
    Material Weakness Repeat
  • 500194 2023-001
    Material Weakness Repeat
  • 500195 2023-001
    Material Weakness Repeat
  • 500196 2023-001
    Material Weakness Repeat
  • 500197 2023-001
    Material Weakness Repeat
  • 500198 2023-001
    Material Weakness Repeat
  • 500199 2023-001
    Material Weakness Repeat
  • 500200 2023-001
    Material Weakness Repeat
  • 500201 2023-001
    Material Weakness Repeat
  • 500202 2023-001
    Material Weakness Repeat
  • 500203 2023-001
    Material Weakness Repeat
  • 500204 2023-001
    Material Weakness Repeat
  • 500205 2023-001
    Material Weakness Repeat
  • 500206 2023-001
    Material Weakness Repeat
  • 500207 2023-001
    Material Weakness Repeat
  • 500208 2023-001
    Material Weakness Repeat
  • 500209 2023-001
    Material Weakness Repeat
  • 500210 2023-001
    Material Weakness Repeat
  • 500211 2023-001
    Material Weakness Repeat
  • 500212 2023-001
    Material Weakness Repeat
  • 500213 2023-001
    Material Weakness Repeat
  • 500214 2023-001
    Material Weakness Repeat
  • 500215 2023-002
    Significant Deficiency
  • 500216 2023-002
    Significant Deficiency
  • 500217 2023-002
    Significant Deficiency
  • 500218 2023-002
    Significant Deficiency
  • 500219 2023-002
    Significant Deficiency
  • 500220 2023-002
    Significant Deficiency
  • 500221 2023-002
    Significant Deficiency
  • 500222 2023-002
    Significant Deficiency
  • 500223 2023-002
    Significant Deficiency
  • 500224 2023-002
    Significant Deficiency
  • 500225 2023-002
    Significant Deficiency
  • 500226 2023-002
    Significant Deficiency
  • 500227 2023-002
    Significant Deficiency
  • 500228 2023-002
    Significant Deficiency
  • 500229 2023-002
    Significant Deficiency
  • 500230 2023-002
    Significant Deficiency
  • 500231 2023-002
    Significant Deficiency
  • 500232 2023-002
    Significant Deficiency
  • 500233 2023-002
    Significant Deficiency
  • 500234 2023-002
    Significant Deficiency
  • 500235 2023-002
    Significant Deficiency
  • 500236 2023-002
    Significant Deficiency
  • 500237 2023-002
    Significant Deficiency
  • 500238 2023-002
    Significant Deficiency
  • 500239 2023-002
    Significant Deficiency
  • 500240 2023-002
    Significant Deficiency
  • 500241 2023-002
    Significant Deficiency
  • 500242 2023-002
    Significant Deficiency
  • 500243 2023-002
    Significant Deficiency
  • 500244 2023-002
    Significant Deficiency
  • 500245 2023-002
    Significant Deficiency
  • 500246 2023-002
    Significant Deficiency
  • 500247 2023-002
    Significant Deficiency
  • 500248 2023-002
    Significant Deficiency
  • 500249 2023-002
    Significant Deficiency
  • 500250 2023-002
    Significant Deficiency
  • 500251 2023-002
    Significant Deficiency
  • 500252 2023-002
    Significant Deficiency
  • 500253 2023-003
    Significant Deficiency Repeat
  • 500254 2023-003
    Significant Deficiency Repeat
  • 1076626 2023-001
    Material Weakness Repeat
  • 1076627 2023-001
    Material Weakness Repeat
  • 1076628 2023-001
    Material Weakness Repeat
  • 1076629 2023-001
    Material Weakness Repeat
  • 1076630 2023-001
    Material Weakness Repeat
  • 1076631 2023-001
    Material Weakness Repeat
  • 1076632 2023-001
    Material Weakness Repeat
  • 1076633 2023-001
    Material Weakness Repeat
  • 1076635 2023-001
    Material Weakness Repeat
  • 1076636 2023-001
    Material Weakness Repeat
  • 1076637 2023-001
    Material Weakness Repeat
  • 1076638 2023-001
    Material Weakness Repeat
  • 1076639 2023-001
    Material Weakness Repeat
  • 1076640 2023-001
    Material Weakness Repeat
  • 1076641 2023-001
    Material Weakness Repeat
  • 1076642 2023-001
    Material Weakness Repeat
  • 1076643 2023-001
    Material Weakness Repeat
  • 1076644 2023-001
    Material Weakness Repeat
  • 1076645 2023-001
    Material Weakness Repeat
  • 1076646 2023-001
    Material Weakness Repeat
  • 1076647 2023-001
    Material Weakness Repeat
  • 1076648 2023-001
    Material Weakness Repeat
  • 1076649 2023-001
    Material Weakness Repeat
  • 1076650 2023-001
    Material Weakness Repeat
  • 1076651 2023-001
    Material Weakness Repeat
  • 1076652 2023-001
    Material Weakness Repeat
  • 1076653 2023-001
    Material Weakness Repeat
  • 1076654 2023-001
    Material Weakness Repeat
  • 1076655 2023-001
    Material Weakness Repeat
  • 1076656 2023-001
    Material Weakness Repeat
  • 1076657 2023-002
    Significant Deficiency
  • 1076658 2023-002
    Significant Deficiency
  • 1076659 2023-002
    Significant Deficiency
  • 1076660 2023-002
    Significant Deficiency
  • 1076661 2023-002
    Significant Deficiency
  • 1076662 2023-002
    Significant Deficiency
  • 1076663 2023-002
    Significant Deficiency
  • 1076664 2023-002
    Significant Deficiency
  • 1076665 2023-002
    Significant Deficiency
  • 1076666 2023-002
    Significant Deficiency
  • 1076667 2023-002
    Significant Deficiency
  • 1076668 2023-002
    Significant Deficiency
  • 1076669 2023-002
    Significant Deficiency
  • 1076670 2023-002
    Significant Deficiency
  • 1076671 2023-002
    Significant Deficiency
  • 1076672 2023-002
    Significant Deficiency
  • 1076673 2023-002
    Significant Deficiency
  • 1076674 2023-002
    Significant Deficiency
  • 1076675 2023-002
    Significant Deficiency
  • 1076676 2023-002
    Significant Deficiency
  • 1076677 2023-002
    Significant Deficiency
  • 1076678 2023-002
    Significant Deficiency
  • 1076679 2023-002
    Significant Deficiency
  • 1076680 2023-002
    Significant Deficiency
  • 1076681 2023-002
    Significant Deficiency
  • 1076682 2023-002
    Significant Deficiency
  • 1076683 2023-002
    Significant Deficiency
  • 1076684 2023-002
    Significant Deficiency
  • 1076685 2023-002
    Significant Deficiency
  • 1076686 2023-002
    Significant Deficiency
  • 1076687 2023-002
    Significant Deficiency
  • 1076688 2023-002
    Significant Deficiency
  • 1076689 2023-002
    Significant Deficiency
  • 1076690 2023-002
    Significant Deficiency
  • 1076691 2023-002
    Significant Deficiency
  • 1076692 2023-002
    Significant Deficiency
  • 1076693 2023-002
    Significant Deficiency
  • 1076694 2023-002
    Significant Deficiency
  • 1076695 2023-003
    Significant Deficiency Repeat
  • 1076696 2023-003
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
93.498 Provider Relief Fund $35.67M
93.378 Integrated Care for Kids Model (a) $2.79M
93.RD Hhsn261201700015i / 75n91022f00001 $1.04M
93.RD 75r60221d00001/75r60222fs4003 $635,029
93.732 Mental and Behavioral Health Education and Training Grants $561,030
93.297 Teenage Pregnancy Prevention Program $539,544
93.493 Congressional Directives $500,000
93.137 Community Programs to Improve Minority Health Grant Program $440,309
93.RD Hhsn26100039 $404,863
93.RD Hhsn261201500003i / Hhsn26100039 $336,038
93.RD Hhsn261201700015i / 75n91022f00002 $308,682
93.918 Grants to Provide Outpatient Early Intervention Services with Respect to Hiv Disease $299,890
93.RD 75r60221d00001/75r60222f34004 $271,128
93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders $262,620
93.321 Dietary Supplement Research Program $242,601
93.059 Training in General, Pediatric, and Public Health Dentistry $234,949
21.027 Coronavirus State and Local Fiscal Recovery Funds $213,776
16.526 Ovw Technical Assistance Initiative $192,455
93.958 Block Grants for Community Mental Health Services $159,186
10.557 Special Supplemental Nutrition Program for Women, Infants, and Children $156,766
93.253 Poison Center Support and Enhancement Grant $149,506
93.RD 1ot2od032701-01 $143,779
93.242 Mental Health Research Grants $134,472
93.RD 75r60221d00001 $130,596
32.006 Covid-19 Telehealth Program $120,844
93.172 Human Genome Research $116,252
47.074 Biological Sciences $111,776
93.225 National Research Service Awards_health Services Research Training $108,040
93.558 Temporary Assistance for Needy Families $106,025
93.213 Research and Training in Complementary and Integrative Health $98,813
93.575 Child Care and Development Block Grant $98,756
93.350 National Center for Advancing Translational Sciences $97,909
93.394 Cancer Detection and Diagnosis Research $97,306
93.788 Opioid Str $95,344
93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response $94,527
14.267 Continuum of Care Program $94,353
93.310 Trans-Nih Research Support $92,916
93.RD Cps-21131-19-0023 $81,575
93.926 Healthy Start Initiative $77,837
93.912 Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement $67,913
93.RD 75d30120c07725 $65,717
93.127 Emergency Medical Services for Children $64,419
93.917 Hiv Care Formula Grants $62,397
84.047 Trio_upward Bound $58,646
93.RD Hhsn261201500003i / 75n91019d00024 $57,029
93.RD W15qkn-16-9-1002 $56,342
16.320 Services for Trafficking Victims $51,387
93.393 Cancer Cause and Prevention Research $49,132
93.671 Family Violence Prevention and Services/domestic Violence Shelter and Supportive Services $44,355
93.398 Cancer Research Manpower $43,494
93.069 Public Health Emergency Preparedness $41,992
93.866 Aging Research $41,325
93.846 Arthritis, Musculoskeletal and Skin Diseases Research $39,850
93.495 Community Health Workers for Public Health Response and Resilient $39,416
16.575 Crime Victim Assistance $38,742
93.RD Hhsn261201500003i/hhsn26100039 $38,554
93.233 National Center on Sleep Disorders Research $38,133
93.RD Hdtra11910020 $36,787
93.136 Injury Prevention and Control Research and State and Community Based Programs $36,254
93.273 Alcohol Research Programs $34,242
93.RD Hhsn261201700015i / 75n91021f00001 $33,843
93.913 Grants to States for Operation of Offices of Rural Health $31,111
93.889 National Bioterrorism Hospital Preparedness Program $30,723
93.RD Hhsa1020699 $28,707
16.590 Grants to Encourage Arrest Policies and Enforcement of Protection Orders Program $24,299
93.307 Minority Health and Health Disparities Research $23,873
93.838 Lung Diseases Research $23,301
93.RD 75r60221d00001/75r60223f34005 $23,130
93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research $22,526
93.840 Translation and Implementation Science Research for Heart, Lung, Blood Diseases, and Sleep Disorders $22,352
93.121 Oral Diseases and Disorders Research $22,295
93.RD 75r60221d00001/75r60223f34006 $22,186
93.778 Medical Assistance Program $21,041
93.353 21st Century Cures Act - Beau Biden Cancer Moonshot $20,403
93.959 Block Grants for Prevention and Treatment of Substance Abuse $20,240
84.181 Special Education-Grants for Infants and Families $20,074
93.080 Blood Disorder Program: Prevention, Surveillance, and Research $18,464
93.632 University Centers for Excellence in Developmental Disabilities Education, Research, and Service $16,833
93.092 Affordable Care Act (aca) Personal Responsibility Education Program $16,406
93.351 Research Infrastructure Programs $16,017
93.279 Drug Abuse and Addiction Research Programs $15,448
93.994 Maternal and Child Health Services Block Grant to the States $14,960
94.006 Americorps $14,446
93.391 Activities to Support State, Tribal, Local and Territorial (stlt) Health Department Response to Public Health Or Healthcare Crises $14,434
93.945 Assistance Programs for Chronic Disease Prevention and Control $14,035
93.RD 75r60221d00001/75r60223f34007 $13,571
16.831 Children of Incarcerated Parents $11,594
93.226 Research on Healthcare Costs, Quality and Outcomes $11,268
93.914 Hiv Emergency Relief Project Grants $10,388
16.757 Judicial Training on Child Maltreatment for Court Personnel Juvenile Justice Programs $10,140
12.420 Military Medical Research and Development $9,951
93.339 Public Health Conference Support $9,702
93.173 Research Related to Deafness and Communication Disorders $9,695
93.110 Maternal and Child Health Federal Consolidated Programs $9,640
93.859 Biomedical Research and Research Training $9,383
93.RD Hhsn272201600018c $9,131
16.585 Drug Court Discretionary Grant Program $8,517
93.433 Acl National Institute on Disability, Independent Living, and Rehabilitation Research $7,782
93.399 Cancer Control $7,684
93.243 Substance Abuse and Mental Health Services_projects of Regional and National Significance $6,940
93.855 Allergy, Immunology and Transplantation Research $6,388
93.397 Cancer Centers Support Grants $6,184
47.075 Social, Behavioral, and Economic Sciences $5,318
93.396 Cancer Biology Research $5,043
93.RD 93.rd $3,964
93.RD Hhsn272201600017c $3,881
93.870 Maternal, Infant and Early Childhood Home Visiting Grant $3,458
93.839 Blood Diseases and Resources Research $2,940
47.070 Computer and Information Science and Engineering $2,915
93.361 Nursing Research $2,858
93.865 Child Health and Human Development Extramural Research $2,185
93.RD Hhsn26100001 $1,897
93.286 Discovery and Applied Research for Technological Innovations to Improve Human Health $1,430
93.867 Vision Research $567
93.837 Cardiovascular Diseases Research $535
93.421 Strengthening Public Health Systems and Services Through National Partnerships to Improve and Protect the Nation’s Health $459
93.RD 75n91019d00024 $354
93.590 Community-Based Child Abuse Prevention Grants $220
93.103 Food and Drug Administration_research $138
93.068 Chronic Diseases: Research, Control, and Prevention $111
93.395 Cancer Treatment Research $43
93.RD 75n93021c00014 $-3,152
93.RD Hhsn272201600014c $-3,649
12.351 Basic Scientific Research - Combating Weapons of Mass Destruction $-6,191
93.RD Hhsn26100002 $-18,664
93.RD 70rsat19cb0000014 $-22,892