Finding Text
2022-007 Department of Health and Human Services FFLA #93.087, 90CU0090, 9/30/2020 ? 9/29/2022 Enhance Safety of Children Affected by Substance Abuse FFLA #93.829, H79SM083331-02, 5/1/2021 ? 12/31/2022 Section 223 Demonstration Programs to Improve Community Mental Health Services Procurement, Suspension & Debarment Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The non-Federal entity?s documented procurement procedures must conform to the procurement standards identified in 2 CRF 200.318 through 200.327 which also requires documentation to be retained to detail the history of procurements. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. Condition: During testing, we identified one contract for each of the above FFLA?s where the required contract provisions in accordance with Uniform Guidance were not included within a contract over $25,000. In addition, no documentation was retained to support management?s rationale to select both of these contracted vendors. Cause: Contract provisions were not evaluated compared to Uniform Guidance contract requirements and documentation was not retained to support management?s rationale to select two contracted vendors. Effect: Contracts may be entered into with a vendor who is suspended or debarred, and contracts may not be in compliance with Uniform Guidance if required contract provisions are not included within the contract. In addition, it is hard to demonstrate that the program complies with laws, regulations, and other compliance requirements when documentation is not retained. Questioned Costs: None reported Context: There was only one contract above the $10,000 procurement policy threshold under the Enhance Safety of Children Affected by Substance Abuse program which was fully tested. There was a total of four contracts above the $10,000 procurement policy threshold under the Section 223 Demonstration Programs to Improve Community Mental Health Services program and two contracts were tested. Repeat Finding from Prior Year: Yes, prior year finding 2021-007 Recommendation: We recommend that management review the procedures and control processes to ensure contract include the required Uniform Guidance provisions and documentation is retained to support the rationale for selecting vendors during the procurement process. Views of Responsible Officials: Management is in agreement.