Finding Text
CFDA Number: 93.224 Federal Program or Cluster: Health Center Program Cluster Grantor Agency: U.S. Department of Health and Human Services Federal Award Identification: H8FCS41177 Compliance Requirements: Procurement and Suspension or Debarment Type of Finding: Material Weakness in Internal Control over Compliance Questioned Costs: None Criteria: The Organization's Financial Policies and Procedures Manual, under Requisitioning, Purchasing, and Receiving Policies & Procedures, states: "If the purchase order is for any goods or service that will be paid for directly from Federal dollars then the purchasing follows Office of Management and Budget Circular 2 CFR CHAPTER I, CHAPTER II, PART 200, ET AL. guidelines. One of the following methods will be used when purchasing goods or services with federal dollars: Micro-purchase for items up to $10,000, small purchase for items up to $150,000, sealed bids for items over $150,000, competitive proposal, or non-competitive proposal. All procurements directly attributable to the federal award will be conducted in a manner providing full and open competition and will only include costs allowable, consistent with Federal Cost Principles 45 CFR Part 75 Subpart E: Cost Principles." 45 CFR Part 75, Section 75.329 Procurement procedures, states: "The non-Federal entity must use one of the following methods of procurement. (b) Procurement by small purchase procedures. 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 . Condition: Organization staff and management appear to be applying their procurement policies that require bids for all purchases in general that exceed $25,000, but not the additional policies and procedures that apply to purchases that will be paid from Federal dollars, that apply for procurements greater than $10,000 but less than $150,000. Cause: Organization staff and management do not appear to be knowledgeable of the Organization's procurement policies and procedures. Effect or Potential Effect: The Organization could make procurements that do not comply with the requirements of 45 CFR Part 75 Section 75.329 and 2 CFR Part 200, Section 200.320 Procurement methods. Context: We requested documentation to support that the Organization followed its procurement policies and procedures, we were told that no individual items were purchased with federal grant funds during the year that exceeded their $25,000 requirement for a bid. None of the transactions for the procurements we selected for testing occurred within the period of performance for the federal awards. Repeat finding? No Recommendation: We recommend that the Organization provide grants management training to all its financial staff and management covering the Uniform Guidance/OMB Guidance for Federal Financial Assistance, as well as the Organization's Financial Policies and Procedures Manual. We also recommend that the Organization develop and implement policies and procedures that proper monitoring of its procurements is being done to ensure the Organization's policies and procedures are being followed. Views of Responsible Officials: We agree with the finding. We have never received proper training. See Corrective Action Plan for Reference 2025-006.