Finding Text
2022-003 Department of Health and Human Services Federal Financial Assistance Listing #93.889, 22SC091990 National Bioterrorism Hospital Preparedness Program Procurement, Suspension and Debarment Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. 2 CFR 200.318 requires documentation to be retained to detail the history of procurements. In addition, as outlined in 2 CFR 180, recipients must not utilize any vendor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition: The following matters were identified during testing: a) No independent secondary level of review or approval is performed. One employee is involved in preparing, reviewing and approving information. Additionally, internal control procedures documented within Coalition?s Grant Management Policy have not been updated since departure of the Grant Management Director. b) 15 instances identified in our sample of expenditures in which the transaction exceeded the Coalition?s micro-purchase threshold, required a price analysis, however, the price analysis was not documented or completed. c) The Coalition?s procurement policy does not include all the required elements as outlined in the Uniform Guidance. d) Five vendors were not verified against the central contractor registry prior to the expenses being incurred to ensure that the vendor was not suspended or debarred. Cause: The Coalition hasn?t formally adopted and implemented updated internal control procedures since departure of the Grant Management Director. Additionally, the Coalition did not retain documentation to support the history of procurement in accordance with Uniform Guidance. Lastly, the internal control process ensuring vendors are verified against the central contractor registry was not followed. Effect: Without established controls over procurement, suspension and debarment, there is a reasonable possibility that the Coalition would not detect errors in the normal course of performing duties and correct them in a timely manner. Without retaining supporting documentation detailing the history of procurement, demonstrating that the program complies with laws, regulations, and other compliance requirements is difficult. Lastly, failing to verify vendors against the central contractor registry may result in the Coalition contracting for services with ineligible parties. Questioned Costs: None reported. Context: Testing was performed over the compliance requirements as follows; -Procurement - A non-statistical sample of 60 non-payroll transactions were selected for testing, accounting for approximately $379,111 of $749,012 total non-payroll costs charged to the federal award. -Suspension and Debarment - all five vendors with transactions equaling or exceeding $25,000 were selected for suspension and debarment testing. Repeat Finding from Prior Year: No Recommendation: We recommend that management implement procedures and control processes to incorporate and document an independent review and approval over procurement, suspension and debarment, update the procurement policy to include Uniform Guidance elements, retain documentation on price analysis for transactions over the micro-purchase threshold and verification of vendors against the central contractor registry. Views of Responsible Officials: Management agrees with the finding.