Finding Text
2023-006 — Procurement
Federal/state program information:
Funding agency: U.S. Department of Health and Human Services
Title: Indian Self-Determination
ALN: 93.441
Award period: 10/1/2022 – 9/30/2023
Criteria: Non-federal entities other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. This includes oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. Further, according to the CBNHC Finance Policies and Procedures, the Board of Directors shall approve all purchases over $5,000.
Condition: For one vendor paid over $5,000 during fiscal year 2023, there was no evidence that selection and use of this vendor was approved by the Board of Directors. For one additional contractor, CBNHC did not have an active contract in place with the contractor.
Context: Two of 35 nonpayroll transactions tested.
Questioned Costs: None.
Cause: CBNHC is not implementing their Financial Policies and Procedures to ensure that the selection and use of all vendors and contractors are properly documented and approved according to purchase authority levels.
Effect: CBNHC is not in compliance with procurement requirements for the Indian Self-Determination program.
Auditor’s Recommendations: CBNHC should implement its Financial Policies and Procedures to ensure that the selection and use of all vendors and contractors are properly documented and approved.
Management’s Response: In fiscal year 2023, CBNHC experienced significant disruption in its administrative operations caused by political struggles over its rightful governing body. During this period, two key leadership members were administratively unavailable to support the proper procurement of vendor contract renewals. The purchases were made outside the CBNHC procurement policies unbeknownst to CBNHC leadership.