Finding Text
Finding 2024-003 Procurement and Suspension and Debarment
Identification of the federal program:
Federal Grantor: United States Department of Health and Human Services
Assistance Listing No.: 93.817 Hospital Preparedness Program (HPP) Ebola Preparedness and Response Activities
Criteria or specific requirement (including statutory, regulatory, or other citation):
2 CFR 200.303 requires that 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 and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”
Uniform Guidance 2 CFR Section 200.320 (a)(2) states regarding the applicability of simplified acquisition procedures: “The aggregate dollar amount of the procurement transaction is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If simplified acquisition procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. Unless specified by the Federal agency, the recipient or subrecipient may exercise judgment in determining what number is adequate. “
Section V.A.1.a.ii of the procurement policy of Fairview Health Services requires that for procurements by small purchase ($10,000-$249,000), where the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold, price or rate quotations must be obtained from three qualified sources. If three separate qualified sources cannot be obtained the reason needs to be formally documented.
Condition:
The data used in evaluating the vendors for suspension and debarment was not reviewed and approved.
Cause:
Management does not have internal controls in place to require the review and approval of the data used in evaluation of vendors for suspension and debarment.
Effect or potential effect:
Suspension and debarment results may not be accurate. As a result, federal funds may be used to pay a contractor that is suspended or debarred.
Questioned costs:
None
Context:
Total Federal expenditures subject to suspension and debarment were $947,686, representing 57% of total federal expenditures of $1,656,727 for the year ended December 31, 2024.
Identification as a repeat finding, if applicable:
The finding is not a repeat finding from the prior year.
Recommendation:
Management should implement internal controls over the review and approval of the data used in suspension and debarment analysis.
Views of responsible officials:
Management agrees with the finding and has developed a plan to correct the finding. Starting June 2025, the monthly suspension and debarment file will be reviewed. A signed statement confirming its accuracy will be included post-review. The accounts payable standard work document will be updated accordingly.