Finding Text
2 C.F.R. § 376.10 gives regulatory effect to the Department of Health and Human Services for 2 C.F.R. Part 180. 2 C.F.R. 180.305 states that Non-Federal entities are prohibited from entering into a covered transaction with parties that are suspended or debarred or whose principals are suspended or debarred, unless the Federal agency responsible for the transaction grants an exception under 2 C.F.R. § 180.135. 2 C.F.R. 180.200 identifies “covered transactions” as nonprocurement or procurement transactions at the primary tier, between a Federal agency and a person; or at the lower tier, between a participant in a covered transaction and another person. Procurement contracts for goods and services awarded under a nonprocurement transaction (e.g., grant or cooperative agreement) are covered transactions if the contracts are expected to equal or exceed $25,000 or meet certain other specified criteria outlined in 2 C.F.R. § 180.220. All nonprocurement transactions as defined in 2 C.F.R. § 180.970 (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless exempt by 2 C.F.R. § 180.215. When a non-Federal entity enters into a covered transaction, the non-Federal entity must verify that the entity is not suspended or debarred or otherwise excluded. This verification may be accomplished by checking SAM exclusions (https://sam.gov/content/home); collecting a certification from the entity or adding a clause or condition to the covered transactions with that entity. 45 C.F.R. § 75.329 provides the procurement methods required for non-Federal entities. 45 C.F.R. § 75.329(b) states small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. Additionally, the Tuscarawas County Health Department has elected to follow the Procurement/Uniform Guidance Policies adopted by the Tuscarawas County Board of Commissioners. The Suspension and debarment section of the policy requires that before a bid process can begin, employees must verify that each vendor bidding on a Federally funded project is not “suspended or debarred.” This means the vendor is in good standing to participate in such projects. Employees must document that the vendor is not suspended or debarred by searching the https://sam.gov/SAM/ website. A print-screen of the search must be included with the bid documentation to verify all vendors are eligible. The Small purchase section of the policy requires, in part, that the Departments will ask for quotes from no less than three sources unless the purchase is for professional services, through a sole supplier or an emergency. Quotes can be written, verbal, or web based. Documentation should always be maintained. If quotes are verbal, documentation must be created and added to the procurement file for reference. The Health Department did not have proper internal controls in place to ensure that procurement procedures were followed as two vendors were paid between $11,107 and $65,187 from the Covid-19 Epidemiology and Laboratory Capacity for Infectious Diseases Program and the required three price quotes were not obtained or supporting documentation was not maintained. Also, the Health District did not have the proper internal controls in place to verify that all entities with whom the Health District had entered into covered transactions, had not been suspended or debarred. During testing for the Covid-19 Epidemiology and Laboratory Capacity for Infectious Diseases Program, we noted one instance of a payment to a vendor of more than $25,000 and there was no evidence the Health Department checked the SAM exclusions, collected a certification from the entity, or added a clause or condition to the covered transaction with the vendor. Due to the deficient internal control structure, the required verification was not completed for the covered transactions in the Covid-19 Epidemiology and Laboratory Capacity for Infectious Diseases Program during 2024. Failing to have the appropriate controls in place may result in vendors receiving federal funds that are suspended or debarred. Prior to contracting with vendors that will be paid with federal funds, the Health Department should ensure that procurement requirements are followed. In addition, the Health Department should verify that the vendor is not suspended or debarred by checking the SAM exclusions, collecting a certification from the vendor, or adding a clause or condition to the covered transaction with the vendor.