Finding Text
2024-003 U.S. Department of Health and Human Services
Federal Financial Assistance Listing #93.526
Grants for Capital Development in Health Centers
Procurement, Suspension and Debarment
Significant Deficiency In Internal Control Over Compliance
Criteria – Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires contract to contain
applicable provisions described in Appendix II to Part 200 for contracts under Federal Awards. The OMB
Compliance Supplement states that non-Federal entities are prohibited from contracting with or making
subawards under covered transactions to parties that are suspended or debarred. Non-Federal entities may
verify that a party is not suspended or debarred by checking the Excluded Parties List System, collecting a
certification from the entity, or adding a clause or condition to the covered transaction.
Condition – Certain applicable provisions described in Appendix II to Part 200 were not included in the contract
as required.
Cause – The Community Health Center did not have an internal control policy to ensure contracts under Federal
awards contained all of the applicable provisions or to ensure that all procurement procedures were completed
and documented.
Effect – Contractors may not be aware of additional terms and conditions required to be followed to be in
compliance with the procurement standards within the Uniform Guidance.
Questioned Costs – None reported.
Context/Sampling – A nonstatistical sample of 2 out of 4 vendors were selected for detail testing, including one
contract subject to Appendix II to Part 200. The contract was missing certain applicable provisions, which include
termination clauses, equal employment opportunity, and anti-lobbying, among others.
Repeat Finding from Prior Years – No.
Recommendation – We recommend the Community Health Center enhance internal control policies to ensure
all contracts under Federal awards contain the applicable provisions in Appendix II to Part 200.
Views of Responsible Officials – Management agrees with the finding.