FAC Explorer

Finding 1179804 (2020-008)

Material Weakness Repeat Finding
Requirement
I
Questioned Costs
-
Year
2020
Accepted
2026-03-16
Audit: 392188
Organization: Commonwealth Healthcare Corporation (MP)
Auditor: ERNST & YOUNG (CNMI) INC

AI Summary

  • Core Issue: CHCC failed to verify vendor eligibility against exclusion lists before entering into contracts over $25,000, violating 2 CFR 180.300.
  • Impacted Requirements: Noncompliance with suspension and debarment regulations led to questioned costs of $107,645.
  • Recommended Follow-Up: CHCC should update its policies to ensure all vendors are checked against exclusion lists as required by federal regulations.

Finding Text

Federal Agency: U.S. Department of Health and Human Services CFDA Program: 93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance Award Number: 1H79SM081982-01 Area: Procurement and Suspension and Debarment Questioned Costs: $107,645 Criteria: In accordance with 2 CFR 180.300, entities that enter into covered transactions must verify that the person with whom they intend to do business is not excluded or disqualified by: (a) Checking SAM.gov Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Additionally, according to 2 CFR 180.220(b)(1), a procurement transaction is considered a covered transaction if the contract amount is expected or to equal or exceed $25,000. Condition: CHCC did not verify whether a person or a vendor is excluded or disqualified pursuant to the requirements of 2 CFR 180.300 prior to entering into the following covered transactions that exceeded the $25,000 threshold. Cause: CHCC’s current policy or procedure for suspension and debarment monitoring only applies to newly contracted persons or vendors under a covered transaction, thus not pursuant to the requirements or provisions of 2 CFR 180.300. Effect: CHCC is in noncompliance with applicable suspension and debarment regulations and questioned costs of $107,645 result. Recommendation: CHCC should revise or update their policies and procedures for monitoring suspension and debarment status of each vendor of covered transactions. These should be reflective of the requirements set by 2 CFR 180.300. Views of Responsible Officials: CHCC concurs with the findings but not the questioned costs. CHCC Division Grants and Financial Integrity (DGFI), updated our Suspension and Debarment procedure to comply with 2 CFR 180.300. To address the question cost of $107,645, CHCC imported from SAM.gov the Exclusion reports dated April 2020 and October 2020 and confirmed that none of the vendors cited in this finding are in the list of excluded vendors. Auditor Response: In accordance with 2 CFR 2900.3(a), a questioned cost is defined as a possible violation of statute, regulation, or the terms and conditions of a Federal award. The current process of CHCC monitoring suspension and debarment status of each vendor or supplier under a covered transaction is not designed to be in accordance with the provisions stated in 2 CFR 180.300 which is the statute to be followed as identified in the terms and conditions of the federal awards. As such, we retain the questioned costs.

Corrective Action Plan

Finding No.: 2020-008 CFDA Program: 93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance Area: Procurement and Suspension and Debarment Questioned Costs: $107,645 Contact Person(s): Director of DGFI, Director of Procurement and Chief Financial Officer Corrective Action Plan: CHCC concurs with the findings but not the questioned costs. CHCC Division Grants and Financial Integrity (DGFI), updated our Suspension and Debarment procedure to comply with 2 CFR 180.300. To address the question cost of $107,645, CHCC imported from SAM.gov the Exclusion reports dated April 2020 and October 2020 and confirmed that none of the vendors cited in this finding are in the list of excluded vendors. Responsible Official: Director of DGFI, Director of Procurement, and Chief Financial Officer Proposed Completion Date: On-going

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

  • 1179797 2020-004
    Material Weakness Repeat
  • 1179798 2020-005
    Material Weakness Repeat
  • 1179799 2020-006
    Material Weakness Repeat
  • 1179800 2020-004
    Material Weakness Repeat
  • 1179801 2020-005
    Material Weakness Repeat
  • 1179802 2020-006
    Material Weakness Repeat
  • 1179803 2020-007
    Material Weakness Repeat
  • 1179805 2020-009
    Material Weakness Repeat
  • 1179806 2020-010
    Material Weakness Repeat
  • 1179807 2020-011
    Material Weakness Repeat
  • 1179808 2020-012
    Material Weakness Repeat
  • 1179809 2020-013
    Material Weakness Repeat
  • 1179810 2020-014
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
10.557 WIC SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN $3.54M
93.268 IMMUNIZATION COOPERATIVE AGREEMENTS $2.73M
15.875 ECONOMIC, SOCIAL, AND POLITICAL DEVELOPMENT OF THE TERRITORIES $1.28M
93.243 SUBSTANCE ABUSE AND MENTAL HEALTH SERVICES PROJECTS OF REGIONAL AND NATIONAL SIGNIFICANCE $1.09M
93.870 MATERNAL, INFANT AND EARLY CHILDHOOD HOME VISITING GRANT $867,903
93.323 EPIDEMIOLOGY AND LABORATORY CAPACITY FOR INFECTIOUS DISEASES (ELC) $830,826
93.982 MENTAL HEALTH DISASTER ASSISTANCE AND EMERGENCY MENTAL HEALTH $616,525
93.136 INJURY PREVENTION AND CONTROL RESEARCH AND STATE AND COMMUNITY BASED PROGRAMS $575,366
93.104 COMPREHENSIVE COMMUNITY MENTAL HEALTH SERVICES FOR CHILDREN WITH SERIOUS EMOTIONAL DISTURBANCES (SED) $527,553
93.354 PUBLIC HEALTH EMERGENCY RESPONSE: COOPERATIVE AGREEMENT FOR EMERGENCY RESPONSE: PUBLIC HEALTH CRISIS RESPONSE $523,298
93.116 PROJECT GRANTS AND COOPERATIVE AGREEMENTS FOR TUBERCULOSIS CONTROL PROGRAMS $511,398
93.898 CANCER PREVENTION AND CONTROL PROGRAMS FOR STATE, TERRITORIAL AND TRIBAL ORGANIZATIONS $440,199
93.994 MATERNAL AND CHILD HEALTH SERVICES BLOCK GRANT TO THE STATES $406,798
93.236 GRANTS TO STATES TO SUPPORT ORAL HEALTH WORKFORCE ACTIVITIES $394,060
93.069 PUBLIC HEALTH EMERGENCY PREPAREDNESS $386,129
97.088 DISASTER ASSISTANCE PROJECTS $383,157
93.959 BLOCK GRANTS FOR PREVENTION AND TREATMENT OF SUBSTANCE ABUSE $311,866
93.217 FAMILY PLANNING SERVICES $307,887
93.788 OPIOID STR $285,432
93.889 NATIONAL BIOTERRORISM HOSPITAL PREPAREDNESS PROGRAM $224,726
93.377 PREVENTION AND CONTROL OF CHRONIC DISEASE AND ASSOCIATED RISK FACTORS IN THE U.S. AFFILIATED PACIFIC ISLANDS, U.S. VIRGIN ISLANDS, AND P. R. $162,175
93.958 BLOCK GRANTS FOR COMMUNITY MENTAL HEALTH SERVICES $131,753
93.251 EARLY HEARING DETECTION AND INTERVENTION $131,198
93.165 GRANTS TO STATES FOR LOAN REPAYMENT $125,000
93.504 FAMILY TO FAMILY HEALTH INFORMATION CENTERS $81,866
93.917 HIV CARE FORMULA GRANTS $56,747
93.110 MATERNAL AND CHILD HEALTH FEDERAL CONSOLIDATED PROGRAMS $54,367
93.150 PROJECTS FOR ASSISTANCE IN TRANSITION FROM HOMELESSNESS (PATH) $48,878
93.991 PREVENTIVE HEALTH AND HEALTH SERVICES BLOCK GRANT $44,182
93.644 ADULT MEDICAID QUALITY: IMPROVING MATERNAL AND INFANT HEALTH OUTCOMES IN MEDICAID AND CHIP $33,438
93.314 EARLY HEARING DETECTION AND INTERVENTION INFORMATION SYSTEM (EHDI-IS) SURVEILLANCE PROGRAM $21,160
93.103 FOOD AND DRUG ADMINISTRATION RESEARCH $20,000
93.665 EMERGENCY GRANTS TO ADDRESS MENTAL AND SUBSTANCE USE DISORDERS DURING COVID-19 $9,691
16.575 CRIME VICTIM ASSISTANCE $5,730
93.817 HOSPITAL PREPAREDNESS PROGRAM (HPP) EBOLA PREPAREDNESS AND RESPONSE ACTIVITIES $3,573