Finding 36538 (2022-001)

Part III ? Schedule of Findings and Questioned Costs ? Federal Programs Item 2022-001 Special Tests and Provisions ? Wage Rate Requirements Health Infrastructure Investment Program ? Assistance Listing # 93.526 U.S. Department of Health and Human Services Federal Award Year 2022 Criteria ? 2 CFR 200.303 requires non-federal entities to establish and maintain effective internal controls over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contracts Governing Federally Financed and Assisted Construction). Condition ? The construction charged to this program was not subject to wage rate requirement and the contracts did not have the required language. Cause ? The Organization had no policy and/or procedures in place to identify the compliance requirements and establish the necessary internal controls to ensure compliance. Questioned Costs ? Undetermined Effect ? Lack of internal controls over compliance resulted in noncompliance of the federal award as the wage rate requirement was not in compliance. Recommendation ? We recommend that the Organization establish policy and procedures to review not on the award agreement but also the OMB Compliance Supplement to develop and understanding of all compliance requirements and thus put in place internal controls to ensure compliance. Management?s Response - MCR Health has established a policy and procedures to review the contract and OMB Compliance supplement requirements for all federal and state awards to gain an understanding of the compliance requirements and will have in place internal controls to ensure compliance.