Finding 398366 (2023-002)

Finding #2023-002 – Significant Deficiency and Other Noncompliance. Applicable federal programs: U. S. Department of Housing and Urban Development, Direct Federal Funding, Continuum of Care Program, Assistance Listing #14.267, Contract # TX0392L6E002107, Contract year: 09/01/22 – 08/31/23. U. S. Department of Health and Human Services, Direct Federal Funding, Cooperative Agreement to Support Navigators in Federally-facilitated Exchanges, Assistance Listing #93.332, Contract #NAVCA210403-02-02, Contract year: 08/27/22 – 08/26/23, Contract #NAVCA210403-03-00, Contract year: 08/27/23 – 08/26/24. U. S. Department of Health and Human Services, Passed through Texas Health and Human Services Commission, Block Grants for Prevention and Treatment of Substance Abuse, Assistance Listing #93.959, Contract #HHS000539700204 YPI, Contract year: 09/01/22 – 08/31/23, Contract #HHS000539700204 YPS, Contract year: 09/01/22 – 08/31/23, Contract #HHS000539700204 YPU, Contract year: 09/01/22 – 08/31/23. Criteria: Procurement and Suspension and Debarment – The Uniform Guidance §180 prohibits contracting with parties that are suspended or debarred. The determination of whether the contracting party is suspended or debarred or otherwise excluded from participating in the transaction may be made by checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration. Condition and context: Civic Heart amended its procurement policy in July 2023 to include a provision that Civic Heart will restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible. Although, Civic Heart was unable to provide evidence that such verification had been made during fiscal year 2023, we tested a sample of 13 vendors and found none to be suspended or debarred. Partial repeat of finding #2022-002. Cause: Civic Heart amended its procurement policy eleven months into fiscal year 2023 as a result of the 2022 audit finding. Although the policy was amended, the provision requiring verification of lack of suspension and debarment was not placed into service until after August 31, 2023. Effect: Failure to follow all requirements of Civic Heart’s procurement policy, including verification of lack of suspension and debarment could result in selecting vendors who are not eligible to be paid with federal monies. Recommendation: Implement procedures and provide training to personnel regarding verification that potential vendors are not debarred, suspended, or otherwise excluded from or ineligible for participation as required by their procurement policy. Views of responsible officials and planned corrective action: Management agrees with the finding. See Corrective Action Plan.