Finding Text
2024 – 002 Procurement and Suspension and Debarment
Federal Agency: U.S. Department of Health and Human Services
Federal Program: Consolidated Health Centers Grant
AL Number: 93.224 & 93.527
Award Period: 7/1/23 - 6/30/24
Type of Finding: Significant deficiency in Internal Control over Compliance and Compliance
Criteria or Specific Requirement
2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Award requires compliance with the provisions of procurement and suspension and debarment.
The Organization should have internal controls designed to ensure compliance with these provisions.
Condition and Context
We noted the Organization is not in compliance with requirements related to Procurement, Suspension
and Debarment. During our testing, we noted the following exception:
For one of the procurement transactions tested the Organization did not retain support to
document the procurement methods followed (I.e., sole source, small purchases, sealed
bids, proposals, etc.).
Effect
The auditor noted instances of noncompliance. Noncompliance results in possible federal funds
provided to ineligible subrecipients and/or vendors.
Questioned Costs
None identified.
Cause
The Organization lacked a process to ensure all supporting procurement documentation is retained to
support the procurement method used.
Recommendation
We recommend the Organization retain all documentation and support to show that the procurement
policy was followed.
Views of Responsible Officials
The Organization maintains procurement policies and procedures, including sole source award procedures, that closely track federal procurement regulations. However, the Organization was unable to locate the sole source documentation prepared at the time of the award in 2021. This is likely attributable to management turnover, along with the operational impact of the COVID Public Health Emergency in effect at that time. The Organization will schedule training for managers on procurement, sole source awards, and document retention. In addition, the Finance Department will review its forms and workflows to ensure filing accuracy and strengthen procurement controls.