Finding 30818 (2022-002)

Material Weakness
Requirement
I
Questioned Costs
-
Year
2022
Accepted
2023-06-12

AI Summary

  • Core Issue: The Organization lacks a written procurement policy as required by federal regulations.
  • Impacted Requirements: Noncompliance with Title 2, Subtitle A, Chapter 2 Part 200, Subpart D, section 200.318 of the Code of Federal Regulations.
  • Recommended Follow-Up: Develop and implement a procurement policy that aligns with federal requirements.

Finding Text

Federal Agency: Department of Health and Human Services Federal Program: Research and Development Cluster Assistance Listing Number: 93.847 & 93.867 Federal Award Identification Number and Year: Various Award Period: January 1, 2022, through December 31, 2022 Type of Finding: Other Matters Finding related to Compliance within Uniform Guidance and Material Weakness in Internal Control Over Compliance Criteria or specific requirement: Title 2, Subtitle A, Chapter 2 Part 200, Subpart D, section 200.318 of the Code of Federal Regulations requires organizations to have a written procurement policy that includes certain requirements as it relates to procuring goods and services using federal dollars. Condition: Noncompliance with procurement requirements under Uniform Guidance. Questioned costs: None Context: During our testing, it was noted that the Organization does not have a written procurement policy in place that covers the requirements noted in Section 200.318 of the Code of Federal Regulations. Cause: Prior to 2022, the Organization was unaware of this federal requirement. Effect: Not following proper procedure is in direct violation of Section 200.318 of the Code of Federal Regulations. Repeat Finding: No. Recommendation: We recommend that the Organization develop a written procurement policy that meets the requirements noted in Section 200.318 of the Code of Federal Regulations. Views of responsible officials and Planned Corrective Actions: There is no disagreement with the audit finding. See Corrective Action Plan prepared by the Organization.

Corrective Action Plan

2022-002 Procurement While the Organization has a procurement policy in place, it is noncompliant with the requirements of Title 2, Subtitle A, Chapter 2 Part 200, Subpart D, section 200.318 of the Code of Federal Regulations. The Organization has experienced substantial growth in recent years and in support of this expansion, hired an experienced CFO in early 2022. The new CFO identified the need for a compliant procurement policy that includes certain requirements as it relates to procuring goods and services using federal dollars. To facilitate the adherence to the new procurement policy, the Organization has purchased new ERP software and both contracted with an outside organization and hired new internal staff to oversee the implementation of this software during 2023. The new procurement policy was reviewed by the auditors during the 2022 audit and a determination was made that had the new policy been in effect and followed, the Organization?s practices would have met the requirements of Title 2, Subtitle A, Chapter 2 Part 200, Subpart D, section 200.318 of the Code of Federal Regulations. This policy will become effective on the go-live date of the new ERP software. A staff member has already been selected to oversee the procurement function and has completed a number of training courses specific to federal procurement requirements.

Categories

Procurement, Suspension & Debarment Material Weakness Internal Control / Segregation of Duties

Other Findings in this Audit

  • 30819 2022-003
    Material Weakness
  • 30820 2022-002
    Material Weakness
  • 30821 2022-003
    Material Weakness
  • 30822 2022-002
    Material Weakness
  • 30823 2022-003
    Material Weakness
  • 30824 2022-002
    Material Weakness
  • 30825 2022-003
    Material Weakness
  • 30826 2022-002
    Material Weakness
  • 30827 2022-003
    Material Weakness
  • 30828 2022-002
    Material Weakness
  • 30829 2022-003
    Material Weakness
  • 30830 2022-002
    Material Weakness
  • 30831 2022-003
    Material Weakness
  • 30832 2022-002
    Material Weakness
  • 30833 2022-003
    Material Weakness
  • 30834 2022-002
    Material Weakness
  • 30835 2022-003
    Material Weakness
  • 607260 2022-002
    Material Weakness
  • 607261 2022-003
    Material Weakness
  • 607262 2022-002
    Material Weakness
  • 607263 2022-003
    Material Weakness
  • 607264 2022-002
    Material Weakness
  • 607265 2022-003
    Material Weakness
  • 607266 2022-002
    Material Weakness
  • 607267 2022-003
    Material Weakness
  • 607268 2022-002
    Material Weakness
  • 607269 2022-003
    Material Weakness
  • 607270 2022-002
    Material Weakness
  • 607271 2022-003
    Material Weakness
  • 607272 2022-002
    Material Weakness
  • 607273 2022-003
    Material Weakness
  • 607274 2022-002
    Material Weakness
  • 607275 2022-003
    Material Weakness
  • 607276 2022-002
    Material Weakness
  • 607277 2022-003
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research $805,072
93.867 Vision Research $208,297