Identification of the federal program U.S. Department of Health and Human Services
Research and Development Cluster
Assistance Listing Numbers:
93.351 – Research Infrastructure Programs
93.855 – Allergy and Infectious Diseases Research
93.855 – COVID-19 Allergy and Infectious Diseases Research
93.RD – NIAID Centers of Excellence for Influenza Research and Response
75N93021C00014 9/1/2021-8/31/2024 Icahn School of Medicine at Mount Sinai
1U19AI171403-01 5/16/2022-4/30/2025 Emory University
1U19AI171443-01 5/16/2022-4/30/2023 The Scripps Research Institute
1U19AI171110-01 5/16/2022-4/30/2023 University of California at San Francisco
5R01AI134240-05 7/1/2022-6/30/2024 N/A
5R01AI134245-07 5/1/2023-4/30/2025 N/A
5R01AI170197-02 2/1/2023-1/31/2024 N/A
5P51OD011133-25 5/1/2023-4/30/2024 N/A
1R21AI170148-01 8/18/2022-7/31/2023 N/A
Criteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”
2 CFR 200.318 (i) General Procurement Standards states, “the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.”
Criteria or specific requirement (including statutory, regulatory, or other citation) (continued) 2 CFR 200.320 – Methods of procurement to be followed states, “the non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award: (a) (2) Small purchases – (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity; (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold; (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate.”
Condition Texas Biomed did not maintain records for procurements sufficient to detail the history of procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.
Cause Texas Biomed did not have effective internal controls and procedures in place to ensure Texas Biomed maintained records for procurements sufficient to detail the history of procurement, including the rationale for the method of procurement and other required elements.
Effect or potential effect Texas Biomed did not comply with the general procurement standards and methods of procurement to be followed per the Uniform Guidance to maintain sufficient detail of the history of the procurement, including the rationale of the method of procurement.
Questioned costs $94,637 in total as follows:
$27,795 – Assistance Listing Number 93.351, Award Identification Number – 5P51OD011133-25
$7,727 – Assistance Listing Number 93.855 (COVID-19), Award Identification Number – 1U19AI171443-01
$3,863 – Assistance Listing Number 93.855 (COVID-19), Award Identification Number – 1U19AI171403-01
$3,863 – Assistance Listing Number 93.855 (COVID-19), Award Identification Number – 1U19AI171110-01
$1,909 – Assistance Listing Number 93.855, Award Identification Number – 5R01AI134240-05
$2,520 – Assistance Listing Number 93.855, Award Identification Number – 5R01AI134245-07
Questioned costs
(continued) $18,404 – Assistance Listing Number 93.855 (COVID-19), Award Identification Number – 5R01AI170197-02
$24,693 – Assistance Listing Number 93.855, Award Identification Number – 1R21AI170148-01
$3,863 – Assistance Listing Number 93.RD NIAID Centers of Excellence for Influenza Research and Response, Award Identification Number – 75N93021C00014
Questioned costs were computed by using the total small purchase procurements that were not supported by adequate documentation regarding the history of the procurement, including the rationale of the procurement.
Context EY selected and tested 15 procurements over $10,000 with expenditures totaling $3,304,871 from a population of 86 procurements over $10,000 with expenditures totaling $5,901,397 charged to the Research and Development cluster during the year ended December 31, 2023.
For 4 procurements with expenditures in the amounts of $12,715, $10,119, $27,795, and $24,693, Texas Biomed did not obtain quotes or document sole source justification or the history of the procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.
For 1 procurement with expenditures in the amount of $19,315, Texas Biomed did not adequately document the history of the procurement, specifically the reason for the contractor selection, since the contractor selected did not provide the lowest quote.
We consider the expenditures related to these procurements to be questioned costs due to lack of required supporting documentation for the procurements, as noted above.
Identification as a repeat finding, if applicable This is not a repeat finding.
Recommendation Texas Biomed should retain written documentation for procurements, documenting the history of the procurement prior to the procurement of goods or services including, but not limited to, the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.
Views of responsible
officials Management agrees with the finding and will implement corrective action to ensure controls are in place to retain the required written documentation for procurements.