Finding Text
2022-002: Evidence of vendor suspension and debarment checks for vendors was not retained ? Significant deficiencyCluster: Not applicableFederal Granting Agency: Health Resources and Services Administration (?HRSA?)Award Name: COVID-19 National Bioterrorism Hospital Preparedness Program (?Bioterrorism Program?)Assistance Listing #: 93.889Award Year: Fiscal year 2022Pass-through entity: N/ACondition:The Company has a policy by which all new vendors are required to be checked against the SAM.gov database by the Risk Management department prior to being entered into the accounts payable system regardless of the dollar value of the transaction. Through inquiry with the Company, they indicated that while these checks are performed, evidence of the checks is not retained. Additionally, of the 179 unique vendors used during fiscal year 2022 related to the Bioterrorism Program, PwC was unable to obtain information regarding how many were new vendors and thus subject to this check. For context, however, if the Company used the federal threshold of $25k for completing the SAM.gov checks, there were 4 transactions totaling approximately $420k above this threshold.Criteria:Non-federal entities are prohibited from contracting with or making subawards under covered transactionsto parties that are suspended or debarred. When a non-federal entity enters into a covered transactionwith an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded fromparticipating in the transaction. This verification may be accomplished by (1) checking the System forAward Management (SAM) Exclusions maintained by the General Services Administration, (2) collecting acertification from the entity, or (3) adding a clause or condition to the covered transaction with that entity(2 CFR section 180.300).Cause:Management?s process and controls did not include the applicable requirement of retaining history or evidence of SAM.gov vendor checks for vendors utilized by the program. As such, no single individual within the Risk Management department at the Company was retaining history or evidence of this step in the Company?s procurement and vendor setup process.Effect:The Company may do business with a vendor that is suspended or debarred if timely checks are not performed.Recommendation:We recommend the Company enhance its controls and revise its procedures surrounding vendor suspension and debarment to include a requirement that evidence is appropriately maintained of SAM.gov vendor checks for each vendor (e.g. screenshots, a checklist including this procedure that is signed, etc.).Management?s Views and Corrective Action Plan:Management?s views and corrective action plan is included at the end of this report after the summary schedule of prior audit findings and status.