Finding 1218823 (2025-002)

Material Weakness Repeat Finding
Requirement
I
Questioned Costs
-
Year
2025
Accepted
2026-06-25
Audit: 404913
Organization: Little Rivers Health Care, Inc. (VT)

AI Summary

  • Core Issue: The Organization lacks effective internal controls to ensure compliance with Federal suspension and debarment requirements, specifically not screening all contractors against the SAM.gov Exclusions List.
  • Impacted Requirements: Non-compliance with 2 CFR § 200.214 could lead to using Federal funds for suspended or debarred entities, risking questioned costs and other consequences.
  • Recommended Follow-Up: Implement formal policies for SAM.gov screenings for all contractors, establish ongoing monitoring, and document all exclusion checks to ensure compliance.

Finding Text

Finding Number: 2025 002 Finding Type: Significant deficiency in internal controls over compliance related to Procurement, Suspension and Debarment Information on the Federal Program: Program Name: Congressional Directives (93.493) Federal Awards Project Title: Community Project Funding/Congressionally Directed Spending ‐ Construction Award Period: June 1, 2023 – September 29, 2026 Award Number: CE2CS49443 and CE2CS52630 Agencies: U.S. Department of Health and Human Services (HHS), Health Resources and Services Administration (HRSA) Criteria: Under 2 CFR § 200.214 (Suspension and Debarment), non-Federal entities are prohibited from entering into covered transactions with parties that are suspended, debarred, or otherwise excluded from participation in Federal programs. To comply with these requirements, entities must implement internal controls reasonably designed to ensure that Federal awards are not used to pay or engage suspended or debarred individuals or entities, including appropriate verification procedures such as screening against the SAM.gov Exclusions List. Condition: The Organization did not have adequately designed internal controls to ensure compliance with Federal suspension and debarment requirements. Specifically, the Organization did not perform SAM.gov exclusion screenings for all contractors. SAM.gov checks were performed only for employees, rather than being performed for all applicable vendors whose yearly expenditures charged to the grant met or exceeded $25,000. As a result, the Organization’s exclusion screening process was not consistently applied to all vendors who met the expenditure threshold. Cause: The Organization's policies and procedures did not establish a comprehensive process to identify contractors and vendors subject to Federal suspension and debarment requirements and ensure that SAM.gov exclusion screenings were performed and documented. Staff turnover and operational challenges contributed to the breakdown in the control process. Effect: Without appropriately designed and consistently applied exclusion screening procedures, there is an increased risk that Federal funds could be used to compensate suspended or debarred entities. This could result in noncompliance with Federal award requirements and may result in questioned costs or other Federal award consequences if such entities were engaged. Questioned Costs: None Repeat Finding: No Recommendation: We recommend that the Organization strengthen its internal controls over compliance with suspension and debarment requirements by implementing formal policies and procedures to ensure SAM.gov exclusion screenings are performed and documented for all applicable contractors and vendors subject to Federal suspension and debarment requirements. At a minimum, the Organization should: • Perform SAM.gov exclusion checks at the time of engagement for all contractors whose expenditures could be charged to Federal awards; • Establish a defined frequency for ongoing monitoring (e.g., periodic or at least annually) to ensure continued compliance; and • Document the results of all exclusion searches and maintain evidence to support compliance with Federal requirements. Views of a Responsible Official and Corrective Action Plan: Management agrees with the finding. Management will implement the recommendations above.

Corrective Action Plan

Finding: 2025-002 Condition Found: The Organization did not have adequately designed internal controls to ensure compliance with Federal suspension and debarment requirements. Specifically, the Organization did not perform SAM.gov exclusion screenings for all contractors. SAM.gov checks were performed only for employees, rather than being performed for all applicable vendors whose yearly expenditures charged to the grant met or exceeded $25,000. As a result, the Organization’s exclusion screening process was not consistently applied to all vendors who met the expenditure threshold. Individual(s) Responsible for Corrective Action: Andrew Barter, CEO Planned Corrective Action: On May 7, 2026, Little Rivers Health Care completed a comprehensive review of all vendors to identify those meeting the federal suspension and debarment screening threshold, with no results. This review identified no excluded or debarred vendors and included all vendors associated with business conducted during 2025. In addition, searches conducted for periods prior to 2025, which included vendors utilized during 2025, did not identify any excluded parties. While the Organization inadvertently failed to perform the required vendor screenings during 2025, the retrospective review, together with the 2026 screening process, demonstrated that none of the applicable vendors were suspended, debarred, or otherwise excluded from participation in federal programs during the period under review. Recognizing the oversight in 2025 and to ensure ongoing compliance, the Organization established a formal vendor exclusion monitoring process consisting of a four-member review team. While the review process itself is relatively straightforward, the team was intentionally designed with redundancy to ensure continuity during periods of staff absence, turnover, or organizational transition. This approach provides multiple levels of oversight and helps ensure that the control remains effective over time. The review team will conduct SAM.gov exclusion screenings and validation reviews twice annually, during May and November of each year, for all vendors meeting applicable federal requirements. Meetings have been scheduled indefinitely with no planned end date. The next scheduled review dates are November 10, 2026, May 11, 2027, and November 9, 2027. Documentation of completed reviews and any required follow-up actions will be maintained as part of the Organization's compliance records. Anticipated Completion Date: May 7, 2026 (Corrective action completed). Ongoing semiannual SAM.gov exclusion screening reviews will continue indefinitely each May and November.

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

  • 1218822 2025-001
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.224 HEALTH CENTER PROGRAM $1.64M
93.493 CONGRESSIONAL DIRECTIVES $1.52M
10.766 COMMUNITY FACILITIES LOANS AND GRANTS $1.00M
93.526 GRANTS FOR CAPITAL DEVELOPMENT IN HEALTH CENTERS $528,387
90.601 NORTHERN BORDER REGIONAL DEVELOPMENT $332,500
32.006 COVID-19 TELEHEALTH PROGRAM $137,666
93.426 THE NATIONAL CARDIOVASCULAR HEALTH PROGRAM $48,346
93.800 ORGANIZED APPROACHES TO INCREASE COLORECTAL CANCER SCREENING $11,758
93.912 RURAL HEALTHCARE SERVICES PROGRAMS $4,896