Finding 43562 (2022-002)

Significant Deficiency
Requirement
I
Questioned Costs
-
Year
2022
Accepted
2023-02-16
Audit: 44640
Organization: Legacy Medical Care Inc. (IL)

AI Summary

  • Core Issue: Legacy failed to document the rationale for using noncompetitive procurement in four out of five transactions.
  • Impacted Requirements: This finding violates 2 CFR section 200.320(c)(1) - (3) and the organization's own procurement policy.
  • Recommended Follow-Up: Ensure consistent documentation practices for noncompetitive procurements and consider qualifying multiple vendors for better competition.

Finding Text

Finding 2022-002 ? Procurement Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Grants for New and Expanded Services Under the Health Center Program Assistance Listing Number: 93.224/93.527 Federal Award Identification Number: L1CCS39368-01-00; L2CCS42352-01-00 Award Periods: July 1, 2020 ? June 30, 2021; July 1, 2021 ? June 30, 2023 respectively Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR section 200.320(c)(1) - (3) outlines the circumstances in which noncompetitive procurement can be used. Furthermore, the organization's procurement policy permits the use of noncompetitive procurement but requires the reason justifying a sole source procurement, together with a description of the supplies or services, to be documented in the appropriate file. Condition: Legacy did not document their rationale for the use of noncompetitive procurements. Questioned Costs: None. Context: Four (4) of Five (5) procurement transactions tested. Cause: Legacy did not create and maintain documentation for its rationale related to choosing the noncompetitive procurement method. Effect: Legacy may inadvertently select vendors without regard to fair competition and cost analysis. Repeat Finding: No. Recommendation: We recommend the organization consistently follow its established policies and procedures related to the maintaining of necessary documentation to support the rationale for using noncompetitive procurement, when applicable. Legacy may also consider qualifying multiple vendors for particular goods/service and then utilizing an approved vendors list. Views of Responsible Officials: There is no disagreement with the audit finding.

Corrective Action Plan

Procurement ? Assistance Listing No. 93.224/93.527 Recommendation: We recommend the organization consistently follow its established policies and procedures related to the maintaining of necessary documentation to support the rationale for using noncompetitive procurement, when applicable. Legacy may also consider qualifying multiple vendors for particular goods/service and then utilizing an approved vendors list. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: ? LMC staff have received further training on the use of sole source documentation, and the established policies and procedures for purchasing and procurement. ? LMC staff responsible for purchasing and agreements will follow the established policy and procedures for procurement. ? LMC staff will develop and maintain tracking mechanisms related to the methodology used for each noncompetitive procurement. Name(s) of the contact person(s) responsible for corrective action: Melissa D?Onorio, CEO, and Emily Faricy, CFO. Planned completion date for corrective action plan: January 31, 2023

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

  • 43563 2022-003
    Significant Deficiency
  • 43564 2022-004
    Significant Deficiency
  • 43565 2022-002
    Significant Deficiency
  • 43566 2022-003
    Significant Deficiency
  • 43567 2022-004
    Significant Deficiency
  • 620004 2022-002
    Significant Deficiency
  • 620005 2022-003
    Significant Deficiency
  • 620006 2022-004
    Significant Deficiency
  • 620007 2022-002
    Significant Deficiency
  • 620008 2022-003
    Significant Deficiency
  • 620009 2022-004
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
93.527 Affordable Care Act (aca) Grants for New and Expanded Services Under the Health Center Program $700,039
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $404,756
93.498 Provider Relief Fund $269,820
93.332 Cooperative Agreement to Support Navigators in Federally-Facilitated and State Partnership Marketplaces $27,210