Finding 1170437 (2022-005)

Material Weakness Repeat Finding
Requirement
I
Questioned Costs
-
Year
2022
Accepted
2026-01-23
Audit: 383596
Organization: Baltimore Medical System, Inc. (MD)
Auditor: RSM US LLP

AI Summary

  • Core Issue: The Organization has an internal procurement policy but lacks controls to ensure compliance with it for all purchases made with federal funds in 2022.
  • Impacted Requirements: Full and open competition in procurement transactions as mandated by federal regulations is not consistently documented.
  • Recommended Follow-Up: Strengthen internal controls by reviewing and improving processes for obtaining, retaining, and approving documentation related to procurement practices.

Finding Text

Federal Award Agency: U.S. Department of Health and Human Services Federal awards: 93.224 / 93.527 – Health Center Program Cluster Criteria: Under this selected program, the Organization must conduct all procurement transactions in a manner providing full and open competition in accordance with federal regulations. Condition: During the compliance testing, we identified that the Organization does have an internal procurement policy in accordance with the federal regulations, however, there appears to be a lack of controls around the documentation of following the existing procurement policies in place for all the Organization’s purchases in 2022 with federal funds. Effect: Currently, there is no known monetary impact, improper expenditure of funds or questioned costs identified. However, if the Organization does not strengthen the internal controls in regard to their procurement policy, there is a possible effect on the ability of the Organization to obtain additional funding under this program if they are not following the federal regulations when it comes to procurement policies. Cause: There is a lack of review in regard to obtaining, retaining and approving documentation that support the fact that the Organization is consistently following their internal procurement policies. Recommendation: We recommend that the Organization review policies, procedures and practices in place over the controls related to obtaining, retaining and reviewing proof of price or rate quotations from an adequate number of qualified sources. Repeat Finding: No. Views of responsible officials and planned corrective actions: See attached letter. Reportable questioned costs: None

Corrective Action Plan

Finding: The Organization does have an internal procurement policy in accordance with the federal regulations, however, there appears to be a lack of controls around the documentation of following the existing procurement policies in place for all the Organization’s purchases in 2022 with federal funds. there is no known monetary impact, improper expenditure of funds or questioned costs identified. However, if the Organization does not strengthen the internal controls in regard to their procurement policy, there is a possible effect on the ability of the Organization to obtain additional funding under this program if they are not following the federal regulations when it comes to procurement policies. There is a lack of review in regard to obtaining, retaining and approving documentation that support the fact that the Organization is consistently following their internal procurement policies Views of responsible officials and planned corrective actions: Management agrees with the recommendation to review policies, procedures and practices in place over the controls related to obtaining, retaining and reviewing proof of price or rate quotations from an adequate number of qualified sources. In the audit sample, many of the invoices were for Provider Agency Staffing. We only have a couple staffing agencies that we use and each are contacted when we are recruiting for a position to get proposed rate; however, it is done verbally and we could not provide proof that it was done. Going forward we will confirm rates via email and maintain the documentation supporting that we are obtaining rate quotations from an adequate number of qualified sources. • The Controller is sending out the Procurement Policy to all relevant personnel to remind them of the procedures that must be followed before making purchases greater than $10,000. • Personnel will be required to send in the quotes from the qualified sources at the time the purchase order is submitted. • The AP specialist will request support of the qualified sources prior to processing the invoices if none are sent with the invoices. Anticipated date of completion: December 31, 2025 Contact person responsible – Tammy Grinnan, Controller and Margaret Boemmel, CFO

Categories

Procurement, Suspension & Debarment Internal Control / Segregation of Duties

Other Findings in this Audit

  • 1170418 2022-002
    Material Weakness Repeat
  • 1170419 2022-002
    Material Weakness Repeat
  • 1170420 2022-002
    Material Weakness Repeat
  • 1170421 2022-002
    Material Weakness Repeat
  • 1170422 2022-002
    Material Weakness Repeat
  • 1170423 2022-002
    Material Weakness Repeat
  • 1170424 2022-003
    Material Weakness Repeat
  • 1170425 2022-003
    Material Weakness Repeat
  • 1170426 2022-003
    Material Weakness Repeat
  • 1170427 2022-003
    Material Weakness Repeat
  • 1170428 2022-003
    Material Weakness Repeat
  • 1170429 2022-003
    Material Weakness Repeat
  • 1170430 2022-004
    Material Weakness Repeat
  • 1170431 2022-004
    Material Weakness Repeat
  • 1170432 2022-004
    Material Weakness Repeat
  • 1170433 2022-004
    Material Weakness Repeat
  • 1170434 2022-005
    Material Weakness Repeat
  • 1170435 2022-005
    Material Weakness Repeat
  • 1170436 2022-005
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.224 CONSOLIDATED HEALTH CENTERS (COMMUNITY HEALTH CENTERS, MIGRANT HEALTH CENTERS, HEALTH CARE FOR THE HOMELESS, AND PUBLIC HOUSING PRIMARY CARE) $7.39M
93.527 AFFORDABLE CARE ACT (ACA) GRANTS FOR NEW AND EXPANDED SERVICES UNDER THE HEALTH CENTER PROGRAM $4.97M
93.526 AFFORDABLE CARE ACT (ACA) GRANTS FOR CAPITAL DEVELOPMENT IN HEALTH CENTERS $1.11M
93.566 REFUGEE AND ENTRANT ASSISTANCE_STATE ADMINISTERED PROGRAMS $994,389
93.217 FAMILY PLANNING_SERVICES $83,609
93.297 TEENAGE PREGNANCY PREVENTION PROGRAM $59,789
93.800 ORGANIZED APPROACHES TO INCREASE COLORECTAL CANCER SCREENING $54,161
93.224 AFFORDABLE CARE ACT (ACA) GRANTS FOR NEW AND EXPANDED SERVICES UNDER THE HEALTH CENTER PROGRAM $42,850
93.870 MATERNAL, INFANT AND EARLY CHILDHOOD HOME VISITING GRANT $35,754
93.501 AFFORDABLE CARE ACT (ACA) GRANTS FOR SCHOOL-BASED HEALTH CENTER CAPITAL EXPENDITURES $2,488