Finding Text
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Community Project Funding/Congressionally Directed Spending ‐ Construction Assistance Listing Number: 93.493 Federal Award Identification Number and Year: 6-CE1HS52375-07 - 2023 Award Period: September 30, 2023, through September 29, 2026 Type of Finding: • Material Weakness in Internal Control over Compliance – Suspension and Debarment • Other Matters Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement, suspension, and debarment. Non-federal entities are prohibited from contracting with or making subawards under covered transactions that are suspended or debarred. Before entering into a covered transaction, the Association must verify that the subrecipient is not suspended, debarred, or otherwise excluded from participating in the transaction. Condition: Evidence of suspension and debarment procedures was not available for the five subrecipients selected for testing. Questioned costs: None. Context: Of the five subrecipients selected for testing, we noted that none of them had proper suspension and debarment procedures in place. Cause: The Association’s internal controls were not sufficient to ensure that subrecipients/contractors’ suspension and debarment status was documented prior to entering into the contract. Effect: The Association could have entered into an agreement with a subrecipient that was suspended or debarred. Although the Association was able to demonstrate that contracts were not entered into with subrecipients who were suspended or debarred, the absence of documentation performed prior to contract execution presents a risk of noncompliance with applicable procurement regulations. Repeat Finding: N/A.Recommendation: We recommend the Association design controls to ensure an adequate review process is in place to review potential subrecipients, contractors, or vendors to determine they are not suspended or debarred prior to entering into transactions. Views of responsible officials: There is no disagreement with the audit finding.