Finding 37926 (2022-002)

Finding 2022-002: Procurement (Noncompetitive Justification) Documentation Information on the Federal Programs: ? 93.243 - Clinical Support System for Serious Mental Illness ? Federal award number - 5H79SM080818-04 & 5H79SM080818-05 ? Federal award date - July 9, 2021 and July 9, 2022 ? Federal Agency - Department of Health and Human Services Criteria: ? 200.318 (i) General procurement standards, states that the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Furthermore: ? 200.320 (f) Methods of procurement to be followed, states that procurement by noncompetitive proposals is procurement through solicitation of a proposal from only one source and may be used only when certain requirements have been met. Condition: During our 2022 audit, we noted multiple consultant contractors which were charged to the Federal program under a noncompetitive (sole source) justification. We noted that the Association did not have records sufficient to detail the history and the rationale of the method of procurement at the time the contracts were executed. Ultimately, official documentation was made available to justify the noncompetitive method of procurement dated March 2023, date of audit fieldwork. Cause: The Association did not document the history or the justification for the method of procurement selected for various consultants charged to the Federal program at the time the contracts were executed. Effect: The Association may have inadvertently selected noncompetitive proposals method when the circumstances did not meet the requirements noted in ? 200.320 (f) Methods of procurement to be followed and thereby failing to full and open competition as required by the regulations. Questioned Costs: N/A Context: The audit sample consisted of eleven transactions of four consultants. The finding pertains to all items sampled. Identification as a Repeat Finding: Yes (2021-001) Recommendation: We recommend that the Association review it?s policy to ensure it clearly identifies the allowable categories of sole source justification. We also recommend that documentation is maintained to substantiate adherence to its policy on Procurement and Contacting and ensure that all instances are adequately documented according to the regulations.