Finding Text
2022-002 Federal Agency: United States Department of Health and Human Services Federal Program Title: Health Center Cluster Assistance Listing Numbers: 93.224/93.527 Award Period: March 1, 2021 through February 28, 2022, March 1, 2022 through February 28, 2023, April 1, 2021 through March 31, 2023. Type of Finding: ? Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: The Code of Federal Regulations section 200.214 requires the Center to follow the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The Center should have policies and procedures in place to ensure contracts or subaward are not provided to third parties that are suspended or disbarred. Condition: During our testing, we noted the Center did not have formal policies or procedures in place to determine if vendors have been suspended or disbarred prior to entering into a contract until June 2022 when the policy was created. Context: During our audit work performed, it was identified that prior to June 2022, the Center did not have a process to check the 'System for Award Management (SAM) Exclusions' or other procedures to ensure third parties were not suspended or disbarred, or retain related support. These procedures were implemented after the new policy was created in June 2022. As a result there were instances of vendors utilized prior to the new policy where documentation was not available to show the vendor being checked against exclusion lists. All vendors over $25,000 under the health center cluster grants were checked against the exclusion list at time of audit, and no exclusions were noted. Cause: The Center did not have a formal suspension and disbarment policy in place for the full year that met Uniform Guidance requirements. There was a prior year audit finding related to the procurement policy, but due to the timing of audit issuance, the corrective action was not able to be implemented back to the beginning of 2022. Effect: The lack of a formal suspension and debarment policy provides the opportunity for noncompliance due to transactions with suspended or disbarred parties. Repeat Finding: Yes ? 2021-002 Recommendation: As the policy has already been revised, we recommend the Center follow the requirements under the new policy and ensure documentation is maintained as appropriate to support vendor checks against the SAM Exclusions list. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding. Management has revised the suspension and debarment policies and procedures to meet Uniform Guidance requirements, and will ensure the new policy and procedures are followed moving forward.