Finding 1226484 (2025-001)

Item 2025-001 - Procurement, Suspension and Debarment - U.S. Department of Health and Human Services, Health Center Program Cluster (Assistance Listing Number 93.224) Notice of Award Number 6 H80CS00849-23-05 and 6 H8NCS53876-01-03 - (Significant Deficiency) Criteria: Recipients and subrecipients are subject to the procurement, suspension and debarment regulations implementing Executive Orders 12549 and 12689, as well as 2 CFR part 180. The regulations in 2 CFR part 180 restrict making Federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. The U.S. Department of Health and Human Services Grants Policy Statement indicates that charges made to HHS grants for the salary of individuals who have been debarred, suspended or declared ineligible or who have been voluntarily excluded from covered transactions are unallowable. Statement of Condition: During our audit, we noted that there is no evidence that any exclusion search was conducted from January 2025 to May 2025. Cause: The FLCH's internal control procedures over suspension and debarment were not consistently followed. Effect: Failure in conducting exclusion searches raises the risk that salaries of employees who are suspended or debarred may be charged to federally-funded programs which is not allowed. Questioned Costs: None. Context: Although FLCH did not consistently conduct exclusion searches in 2025, none of the sample employees tested were found to be suspended or debarred. Identification as a Repeat Finding: This is a repeat of prior year's finding (Finding 2024-001). Recommendation: We recommend that FLCH train its employees in relation to their policies and procedures on conducting exclusion screening and on proper documentation thereof. Management Response: Management agrees with the finding and will be conducting training for its personnel to help ensure the accuracy, completeness and timeliness of exclusion searches. Effective June 2025, a new internal control procedure was implemented to ensure that verification of suspension and debarment is consistently done.