Finding Text
Finding: 2022-012 (Material Weakness) Agency: US Department of Health and Human Services ALN # and Title: 93.600 Head Start Federal Award Identification # and Year: 02CH010735/04 Criteria: Per 2 CFR 200.14 recipients of federal awards are to maintain procurement policies in accordance with grant requirements and are subject to the nonprocurement debarment and suspension regulations which restrict making contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. Condition: The procurement policy maintained by UCCAC contained inconsistencies regarding when a purchase order was needed verse a check request or purchase order contract and did not include any procedures for verifying whether vendors were not debarred, suspended, or otherwise excluded from receiving or participating in federal awards. UCCAC did not verify whether vendors were debarred, suspended or otherwise excluded from receiving or participating in federal awards for the Head Start program. Effect: UCCAC is not in compliance with federal procurements requirements. Without proper verification, there is a risk that federal funds may be disbursed to ineligible vendors, potentially resulting in noncompliance with federal regulations, questioned costs, and reputational damage. Inconsistencies in whether a purchase order is required verse a check request could result in unauthorized purchases. Cause: UCCAC lacked adequate internal controls over the verification of whether vendors were included on the debarred, suspended or exclusion listing and had inconsistencies within the procurement policy when preparing purchase orders. Recommendation: We recommend that UCCAC review their procurement policy and make necessary updates to remove inconsistencies and to include a procedure for verification of whether vendors have been debarred, suspended or excluded from receiving or participating in Federal awards against the SAM.gov exclusion list prior to contract execution. Verification of vendors should be updated annually. Management’s Corrective Action Plan: Management has indicated that they have put certain procedures into place as detailed in the Corrective Action Plan located in Appendix A.