Finding Text
Federal Agency: United States Department of Health and Human Services
Federal Program: Grant for New and Expanded Services under the Health Center Program
Federal Assistance Listing Number 93.527
Federal Award Year: 2022-2023
Criteria or specific requirement – Procurement (2 CFR 200.318) The recipient or
subrecipient must maintain and use documented procedures for procurement transactions
under a Federal award or subaward, including for acquisition of property or services.
Condition – The Organization was unable to provide evidence it was in compliance with its
procurement policy. Records sufficient to detail the history of procurement including the
rationale for the method of procurement, selection of contract type, contractor selection or
rejection, and the basis for the contract price were not retained.
Cause – The Organization did not have adequate controls and procedures in place relating
to procurement under the Uniform Guidance.
Effect or Potential Effect – The Organization could not support that it complied with its
procurement policy as required records were not maintained. Purchases of goods or
services were made that may not have been obtained in the most effective manner or in
compliance with Uniform Guidance.
Questioned Costs – None
Context – The Organization does not have appropriate controls in place to ensure
procurement procedures are being appropriately documented and that its policies are
compliant with the Uniform Guidance. Four of 22 purchases over $5,000 were
selected for testing, and documentation was not maintained to support that procurement
procedures were followed. The sampling methodology used is not, and is not intended to
be, statistically valid.
Identification as a Repeat Finding– Not a repeat finding.
Recommendation – The Organization should incorporate internal controls over
compliance with the procurement compliance requirement, including reviewing its
procurement policy for compliance with Uniform Guidanc including documentation
requirements and record retention policies.
Views of Responsible Officials and Planned Corrective Actions – Management
acknowledges the audit finding related to procurement compliance under Federal Program
Grant for New and Expanded Services under the Health Center Program (Federal
Assistance Listing Number 93.527; Federal Award Year 2022-2023). We are committed to implementing
corrective measures to address the identified deficiencies and ensure full compliance with 2 CFR
200.318 regulations.
Corrective Actions Taken:
1. Established & Implemented Detailed Record-Keeping for Procurement Transactions:
- A new accounting system with a centralized procurement tracking system has been
implemented and is currently being used. Bill.com is used to record vendor invoices and
procurement transactions in real time and syncs with Sage Intacct, the new accounting
software implemented in January 2024.
- Detailed records of all federal grant expenditures are maintained in Bill.com and monthly
reconciliations are conducted in the general ledger to ensure all procurement
transactions are properly classified to their specific grant by their grant ID.
We believe that these actions will significantly mitigate the risks associated with the
identified conditions and strengthen our internal control environment and align our
practices with federal regulations.