Finding Text
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: HIV Prevention Activities: Non-Governmental Organization Based Assistance Listing Number: 93.939 Federal Award Identification Number: NU65PS923746 Award Period: July 1, 2024 through June 30, 2025 Type of Finding: • Significant Deficiency in Internal Control over Compliance and Compliance – Procurement and Suspension & Debarment Criteria or Specific Requirement: Per 2 CFR §180.300 and §200.213, non-federal entities must verify that entities receiving subawards or contracts are not suspended or debarred prior to entering into a covered transaction. Non-federal entities must also conduct all procurement transactions in line with Uniform Grant Guidance. Condition: It was noted through our testing that no documentation could be provided in order to confirm that the exclusions listing was checked prior to commitments entered. It was also noted through our testing that proper procurement procedures were not followed in obtaining bids or price comparisons for various vendors prior to contract engagement. Questioned Costs: $90,467 Context: Although one subrecipient was confirmed as not listed on the federal exclusions list as of July 31, 2025, the Organization did not retain documentation demonstrating that this verification was performed prior to entering into the covered transaction. Also, the Organization has a procurement policy in place that aligns with the Uniform Guidance standards, but proper procedures were not followed in obtaining bids or price comparisons prior to contract engagement for one item tested. Cause: The lack of documentation appears to be due to insufficient procedures for retaining evidence of procurement, suspension and debarment checks prior to executing subawards and contracts with vendors. Effect: This deficiency resulted in noncompliance with federal procurement, suspension and debarment requirements. Failure to document verification prior to entering into a covered transaction and competitive procurement may result in noncompliance with federal requirements and could lead to inefficient use of federal funds or disallowed costs. Repeat Finding: Yes Recommendation: We recommend that management reinforce procedures to ensure that verification of procurement, suspension and debarment practices are performed and documented prior to entering into any covered transaction or subaward. This may include retaining screenshots from SAM.gov, signed certifications, contract clauses confirming compliance, and documentation of competitive pricing retained for records. Views of Responsible Officials: There is no disagreement with the audit finding. See Corrective Action Plan.