Finding Text
Item 2025-001 - Procurement, Suspension and Debarment - U.S. Department of Health and Human Services, Health Center Program Cluster (Assistance Listing Number 93.224/93.527) Notice of Award Number 6 H80CS00505-23-04, 6 H2ECS45602-02-04, 1 H8LCS50772-01-00 and 6 H8HCS46163-03-01 - (Material Weakness) Criteria: Recipients and subrecipients are subject to the procurement, suspension and debarment regulations implementing Executive Orders 12549 and 12689, as well as 2 CFR part 180. The regulations in 2 CFR part 180 restrict making Federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. The U.S. Department of Health and Human Services (HHS) Grants Policy Statement indicates that charges made to HHS grants for the salary of individuals who have been debarred, suspended or declared ineligible or who have been voluntarily excluded from covered transactions are unallowable. Statement of Condition: During our audit, we noted that there is no evidence that any exclusion search was conducted in 2025 for all sample employees tested. Cause: LBUCC did not have a policy in place to perform exclusion searches for employees whose salaries are being charged to HHS grants. Effect: Failure in conducting exclusion searches raises the risk that salaries of employees who are suspended or debarred may be charged to federally-funded programs. Questioned Costs: None Context: Although LBUCC did not conduct exclusion searches in 2025, none of the sixty samples tested were found to be suspended or debarred. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that LBUCC develop and implement a formal exclusion search policy for employees whose salaries are charged to HHS grants to ensure compliance with federal and state regulations. The policy should include documentation procedures and procedures for investigating and resolving any exceptions found during the search. Management Response: Management agrees with the finding and will develop and implement a screening policy to mitigate the risk of charging the salaries of excluded individuals to HHS grants.