Finding Text
2022-004 Improve Controls and Documentation Over Procurement
Federal Program Information
Federal Agency: Department of Health and Human Services, Centers for Disease Control and Prevention
Award Name(s): Injury Prevention and Control Research and State and Community Based Programs; Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises
Assistance Listing Number(s): 93.136, 93.391
Award Year: 2022
Compliance Requirement: Procurement
Type of Finding
Compliance
Internal Control over Compliance – Significant Deficiency
Criteria or Specific Requirement
OMB’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires that grant recipients follow procurement procedures for the acquisition of property or services under a federal award. Grantees are required to comply with certain procurement standards as defined in 2 CFR 200.318. These standards include the requirement that the grantee must use its own documented procurement procedures provided that they conform to applicable federal law. In addition, the grantee must maintain records sufficient to detail the history of procurement.
Condition and Context
During our audit, we tested a sample of two procurement transactions under assistance listing number 93.136 and one transaction under assistance listing number 93.391 for vendors with expenditures between $10,000 and $49,999 during fiscal year 2022. Of the transactions tested, all were missing supporting documentation to validate justification of why it was sole source as approvals were done verbally between the requestor and the Executive Director. In addition, one transaction under assistance listing number 93.136 did not qualify as meeting the requirements of sole source based on the Organization’s procurement policy.
Cause
The Organization did not have adequate controls or policies in place to maintain formal evidence of sole source justification and to ensure procurement policy was adhered to.
Effect or Potential Effect
Due to the weakness in internal controls and compliance finding noted above, there is a risk that contracts may be awarded to vendors in a manner that is not consistent with Federal procurement requirements and the Organization’s procurement policy. No questioned costs are reported as it is not quantifiable.
Recommendation
The Organization should address the weaknesses in internal controls noted above in order to ensure that federal procurements are conducted in accordance with federal requirements and supporting documentation is maintained to support such conclusion. The Organization should ensure that prior to entering into transactions, a review is performed over vendor selection and all required documentation is retained.
Views of Responsible Official
Management agrees with the finding. Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.