FAC Explorer

Finding 1164648 (2025-001)

Material Weakness Repeat Finding
Requirement
I
Questioned Costs
-
Year
2025
Accepted
2025-12-12
Audit: 374273
Organization: Oklahoma Blood Institute (OK)
Auditor: FORVIS MAZARS LLP

AI Summary

  • Core Issue: The Company failed to document its process for determining sole source procurement and verifying vendor eligibility against suspension and debarment requirements.
  • Impacted Requirements: Non-compliance with federal procurement standards outlined in 2 CFR 200.318-320, which mandate specific policies for vendor selection and documentation.
  • Recommended Follow-Up: Revise vendor qualification policies to include all vendors receiving federal funds, implement documented searches for vendor suspension and debarment, and establish clear procurement procedures as required by federal guidelines.

Finding Text

Federal Program: 93.493 – Congressional Directives, U.S. Department of Health and Human Services, FAIN CE152180 passed through the Health Resources & Services Administration Criteria or Specific Requirement: Procurement, Suspension & Debarment, 2 CFR 200.320 Condition: The Company paid funds to a vendor that qualified under sole source procurement requirements. In the vendor’s contract with the Company, the vendor confirmed it was not suspended or debarred. The Company did not document its process for determining sole source procurement or document its search to confirm the vendor was not suspended or debarred. Cause: The Company does not have policies in place that comply with federal procurement, suspension and debarment requirements. Effect: The Company’s internal controls did not ensure proper documentation that the vendor materially complied with the federal procurement requirements. Questioned Costs: None Context: Federal procurement standards require entities that receive federal awards to have specific policies that comply with 2 CFR Section 200.318-320. The requirements specify that policies must establish thresholds and procedures for micro-purchases, simplified acquisitions, and formal purchases. When vendors are selected, federal funds are prohibited from going to certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in federal awards (2 CFR 200.214). The Company did not have policies in place to ensure compliance with these federal procurement guidelines. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: The Company has policies for vendor qualification in place surrounding critical vendors. We recommend considering all vendors that are awarded contracts to be paid with federal awards critical or otherwise amending the Company’s contracting review process or critical vendor policy to incorporate specific procedures when federal funds are used. These procedures should include a documented search of Sam.gov for suspension and debarment of the vendor. The Company should establish procurement thresholds and specific procedures for those thresholds as outlined in 2 CFR Section 200.318-320. Views of Responsible Officials and Planned Corrective Actions – Management agrees with the finding. See attached corrective action plan.

Corrective Action Plan

OBI will update current purchasing and procurement policy to specifically address the acquisition of property or services using federal grant funds to ensure adherence to Federal procurement standards in 2 CFR Part 200 sections 200.317-200.327. Our policy will outline requirements regarding vendor selection and vendor qualification. It will address the simplified acquisition threshold, micro purchases threshold, and the formal procurement methods that must be adhered to when the value exceeds those thresholds. The policy will include when sealed bids, proposals/requests for proposals are required and when sole source procurement is appropriate and allowable. Whenever sole source procurement is used, the rationale will be documented and approved. Our policy will include language requiring that all vendors and contractors paid using federal funds be checked for federal suspension & debarment using Sam.gov. Vendors found on the exclusion list will not be paid using federal funds. The policy outlines requirements for written approvals and documentation of all procurements. Additionally, OBI has implemented procedures to ensure that at the point of receiving the Notice of Award, any federal money or grant awarded to OBI will be immediately communicated to the CFO, Controller, and the Senior Accountant. Person(s) Responsible: Senior Accountant with review and approvals from Controller and CFO Estimated Completion Date: January 31, 2026

Categories

Procurement, Suspension & Debarment

Programs in Audit

ALN Program Name Expenditures
93.493 CONGRESSIONAL DIRECTIVES $1.24M
93.368 21ST CENTURY CURES ACT - PRECISION MEDICINE INITIATIVE $748,595