Finding Text
2022-005 – Department of Health and Human Services
CFDA #93.829 Section 223 Demonstration Programs to Improve Community Health
Services (CCBHC)
Procurement, Suspension and Debarment
Material Weakness in Internal Control over Compliance
Criteria – CFR 200.303 establishes that the entity must establish and maintain effective internal control over
federal awards that provides reasonable assurance that the entity is managing the federal award in compliance
with federal statutes, regulations and terms and conditions of the federal award. In addition, 2 CFR
200.302(b)(6) establishes that the financial management system of the entity must provide written procedures
to implement the requirements of 2 CFR 200.305 regarding procurement. The entity should also maintain
effective internal controls to determine that payments of federal awards are not made to vendors who are
suspended or debarred from federal contracts.
Condition – Rimrock Foundation does not have formally documented written internal control procedures over
compliance with federal award programs to meet the requirements noted above regarding compliance with
federal regulations for procurement, suspension and debarment.
Cause – Rimrock Foundation was not aware of certain requirements under 2 CFR 200 Uniform Administrative
Requirements, Cost Principles, and Audit Requirements regarding procurement for federal awards and did not
implement controls to review vendors for suspension or debarment.
Effect – Inadequate documentation of controls over these compliance areas may result in a reasonable
possibility that Rimrock Foundation may not be able to detect and correct noncompliance with federal
regulations regarding the use of federal funds in a timely manner and could contract with a vendor who has
been suspended and debarred from federal contracts.
Questioned Costs – None reported Context/Sampling – A nonstatistical sample of 3 contracts was selected, from expenditures in the reports
submitted to the Substance Abuse and Mental Health Services Administration, for testing of controls over
procurement of contracts which use federal funds. None of the contracts were reviewed for compliance with
federal regulations and none of the vendors were reviewed for suspension and debarment prior to submission.
Repeat Finding from Prior Year – Yes.
Recommendation –Rimrock Foundation should establish and maintain effective internal control over federal
awards that provides reasonable assurance that it is managing all federal awards in compliance with federal
statutes, regulations and terms and conditions of the federal award. In addition, 2 CFR 200.302(b)(6) establishes
that the financial management system must provide written procedures to implement the requirements of 2
CFR 200.305 regarding procurement. As part of those controls, Rimrock Foundation should also determine that
payments of federal awards are not made to vendors who are suspended or debarred from federal contracts.
Views of Responsible Officials – Management agrees with the finding.