Finding No. 2022-006
Federal Agency: U.S. Department of Health and Human Services
AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care)
Federal Award No.: H8031624, H8F41048, H8D36529
Area: Procurement and Suspension and Debarment
Questioned Costs: $126,567
Criteria:
Non-federal entities other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They may use their own documented procedures, which reflect applicable state and local laws and regulations, provided that the procurements confirm to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200.
Further, KCHC’s procurement policy requires the following:
• For small purchases between $10,001 to $250,000, price or rate quotes must be obtained from an adequate number of sources (at least two) and all quotes, including phone calls, web searches, etc., must be documented and kept on file.
• To be allowable under a federal award, costs must be reasonable, allocable, and adequately documented and consistent with federal cost principles.
Condition:
Of forty non-payroll expenditures tested, aggregating $234,183 of a total population of $770,029, the following were noted:
1. For six (or 15%), supporting procurement package was not sufficient to demonstrate price or rate quotes had been obtained from an adequate number of sources.
Finding No. 2022-006, continued
Federal Agency: U.S. Department of Health and Human Services
AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care)
Federal Award No.: H8031624, H8F41048, H8D36529
Area: Procurement and Suspension and Debarment
Questioned Costs: $126,567
Condition, continued:
2. For one (or 3%), no contractual agreement between KCHC and the vendor was provided to the audit team (invoice nos. 1235 and 1351 totaling $3,000 and $1,200, respectively).
3. For one (or 3%), supporting procurement package was not sufficient to support open and fair competition for document no. 2834 totaling $1,215.
4. For 11 (or 28%), no purchase order was provided.
Cause:
KCHC did not enforce recordkeeping and monitoring controls over compliance with applicable procurement and suspension and debarment requirements.
Effect:
KCHC is in noncompliance with applicable procurement requirements and questioned costs of $126,567 result.
Finding No. 2022-006, continued
Federal Agency: U.S. Department of Health and Human Services
AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care)
Federal Award No.: H8031624, H8F41048, H8D36529
Area: Procurement and Suspension and Debarment
Questioned Costs: $126,567
Effect, continued:
Identification as a Repeat Finding: Finding No. 2021-006
Recommendation:
Responsible personnel should establish a recordkeeping system whereby underlying support for each transaction is processed timely and is filed to facilitate easy retrieval substantiating procurement compliance. In addition, responsible personnel should enforce compliance with procurement regulations.
Views of Responsible Officials:
Management agrees with the finding and has developed a plan to correct the finding. Refer to separate Corrective Action Plan.