Finding Text
U.S. Department of Health and Human Services Congressional Directives - 93.493 Award# CE152271 Criteria or Specific Requirement – Procurement and Suspension and Debarment subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g ., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR Section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e ., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR Section 180.215. Per 2 CFR 200.303, the non-federal entities receiving federal awards (i.e ., auditee management) establish and maintain internal control design to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition – The Hospital's Procurement Policy and Procedure is not in alignment with the requirements of 2 CFR Section 200.320. The policy does not document different procurement methods for documentation to be retained, etc. Additionally, formalized documentation supporting the Hospital is in compliance with policies and regulations supporting its procurement decisions did not exist. Lastly, there was no suspension and debarment check completed prior to purchases made with federal funds. Cause – The Hospital's procurement policies are not in accordance with the Uniform Guidance, nor are there controls in place to ensure policies are followed, and lastly, there are no controls to ensure suspension and debarment checks are performed on vendors receiving federal funds. Effect or Potential Effect – Federal funds could be used to make an unauthorized purchase including paying paying an entity that is suspended or debarred. Questioned Costs – None noted. Context – During fiscal year 2025, only one vendor was subject to procurement and suspension and debarment requirements and was therefore selected for testing. The Hospital expended $1,100,000 for goods goods and services from this vendor during the fiscal year. The Hospital was able to provide bid documentation related to vendor selection; however, the Hospital did not have formally documented written procurement policies addressing compliance with Uniform Guidance requirements, including procedures for suspension and debarment verification. As part of audit testing, it was noted that the vendor had not been evaluated for suspension or debarment at the time of procurement. A subsequent check performed during the audit indicated that the vendor was not suspended or debarred. Identification as a Repeat Finding, if applicable – Not applicable. Recommendation – Policies and procedures should be modified to ensure that procurement policies are in alignment with federal regulations, support for procurement decisions are maintained and suspension and debarment checks on vendors are performed prior to making purchases with federal funds and are in alignment with the Uniform Guidance requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with finding. See corrective action plan.