Finding 485508 (2023-002)

Suspension and Debarment Federal Program and Specific Federal Award U.S. Department of Health and Human Services (HHS) 93.224/93.527 Consolidated Health Centers (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, Public Housing Primary Care, and School Based Health Centers); (HHS Community Health Center Program) 93.526 Grants for Capital Development in Health Centers Type of Finding: Significant deficiency in internal control over compliance Specific Requirement-Criteria Nonfederal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition - Context The Association did not verify that certain employees and vendors were not suspended, debarred, or otherwise excluded from or ineligible for participation in federal programs or activities before entering into transactions with them. The condition affected five of ten parties selected for testing. The Association did ultimately verify that the contracted parties were not suspended or debarred; however, it was after initially contracting with them. Cause Due to open positions in the finance department, oversight and communication regarding following the Association’s suspension and debarment process was not followed. During 2022, the Associated hired contract financial consultants to aid in the open positions and bring financial information and process up to date and during 2023 new procedures were implemented to review for suspension and debarment. Effect Ineligible parties could possibly participate in and be reimbursed by a federal program through the Association. Questioned Costs None. Repeat Finding Yes, see finding 2022-003. Recommendation We recommend that management monitors and trains the staff involved in the suspension and debarment process on an annual basis to ensure all parties are following the Association’s policy and process. Management Response We agreed with the above comment and the Association conducted training with the finance department during 2023 to ensure that all members are educated on the required policies for compliance. In addition, a third party vendor system was contracted with by the Association in 2023 to regularly run a utility to review their vendor listing for suspended and debarred entities.