Finding 1104736 (2024-002)

Finding 2024-002 – Procurement, Suspension and Debarment Identification of the federal program: Federal Grantor: United States Department of Treasury Assistance Listing No.: 21.027, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Pass-Through Grantor: Kansas Department for Aging and Disability Services Ascension Ministry Market: Kansas Pass-Through Award Number: N0237723 Pass-Through Award Period: 07/01/2023-06/30/2026 Pass-Through Grantor: State of Tennessee Department of Health Ascension Ministry Market: Tennessee Pass-Through Award Number: Not applicable Pass-Through Award Period: 03/03/2021-12/31/2026 Criteria or specific requirement (including statutory, regulatory, or other citation): Section 200.303 of the 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).” Condition:Ascension Health (the System) did not timely perform the reconciliation between the vendor files transferred to the third-party vendor and the third-party’s reports outlining the number of vendor units processed for fiscal year 2024. Cause: The System’s internal control over the review of the completeness of the vendor files was not completed prior to the end of the fiscal year in accordance with the System’s relevant internal procedures. Effect or potential effect: Federal funds may be used to pay a vendor that is suspended or debarred. Questioned costs: $0 Context: The System has an internal control procedure to perform a reconciliation between the vendor files transferred to the System’s third-party vendor engaged to perform the suspension and debarment screening and the third-party’s reports outlining the number of vendor units processed. However, review was delayed and was not completed until November 2024. For Assistance Listing No. 21.027, total federal portion of procurement expenditures subject to suspension and debarment review was $1,107,944, which represents approximately 15% of total federal expenditures of $7,292,682 reported on the SEFA for the year ended June 30, 2024. Identification as a repeat finding, if applicable: The finding is a repeat finding from the prior year (2023-003). Recommendation: The System should ensure that the established procedures over review of the completeness of the vendor files are followed and performed in a timely manner. Views of responsible officials: Controls were subsequently performed during fiscal year 2025 for the 2024 fiscal year files, with no errors identified. Management has emphasized to the Compliance Investigations & Incidents team the importance of the timely execution of these controls going forward. Management will update the validation process document to set expectations of timely quarterly reconciliations of the vendor files sent to the third-party vendor.