FAC Explorer

Finding 496828 (2023-002)

Significant Deficiency
Requirement
I
Questioned Costs
-
Year
2023
Accepted
2024-09-13
Audit: 319560
Organization: People's Community Clinic (TX)
Auditor: Forvis Mazars LLP

AI Summary

  • Core Issue: The Organization's procurement policy was not followed for a purchase over $10,000.
  • Impacted Requirements: This violates Federal procurement standards outlined in 45 CFR 75.329.
  • Recommended Follow-Up: Review and update procurement policies to ensure compliance with Federal requirements for all purchases.

Finding Text

Federal Assistance Listing Nos. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. 4 H8FCS40875-01-02 Program Year 2023 Criteria or Specific Requirement – Procurement, Suspension, & Debarment – 45 CFR 75.329 Condition – The Organization’s procurement policy established a threshold of $10,000 for small purchase procurements. This policy was not properly applied. Questioned Costs – Unknown Context – A sample of two procurements were tested out of a population of eleven transactions subject to procurement requirements. The population sampled represented $957,817 in Federal expenditures. The sample was not, and is not intended to be, statistically valid. Of the two procurements tested, one procurement for $54,684 was not completed in compliance with the Organization’s policy and procedures. Effect – A purchase was made without fully adhering to Federal procurement requirements. Cause – The Organization did not apply its procurement policy to a transaction that met the small purchases threshold. Identification as a Repeat Finding – Not a repeat finding. Recommendation – The Organization should review its policies and procedures to ensure all purchases using Federal grant dollars are completed in accordance with Federal procurement requirements.

Corrective Action Plan

Management agrees with this finding. Planned corrective action includes complying with the existing Procurement and Competitive Bidding Policies and Procedures. People’s Community Clinic maintains an electronic process for approval of grants, contracts, business associate agreements, and competitive bids. Annually, staff are required to read the Contracts Approval policy and procedure, which includes links to another policy related to Procurement and Competitive Bidding policy and procedure. Additionally, the Contracts and Compliance Specialist maintains a SharePoint page with additional FAQs related to the contracts process. Once a contract is submitted through the contracts Smartsheet, the Chief Financial Officer (CFO), Chief Operating Officer (COO), Chief Compliance Officer (CCO), and Security Officer (SO) are notified to review the contract. If a contractor is to be paid, the Finance Department is notified and the contract owner should have included additional documents, including the W-9. The Finance Department has full access to the contracts Smartsheet to see when a contract is approved by the contract reviewers and fully executed. People's policy does not differentiate between federally funded contracts and non-federally funded contracts; therefore, the following proposed action plan will apply to all invoices over $10,000. On a quarterly basis, a sampling of invoices that are not a part of a known Group Purchasing Organization (GPO) agreement and exceed $10,000 will be tested against the contracts Smartsheet and reviewed with the bid Smartsheet documentation. The goal of the audit will be to ensure that the invoice was included in the contracts process and ensure that all aspects of the contract were checked against federal, state, and policy contract requirements (as listed in the contracting form). The audit will be conducted by the Finance Department in conjunction with the Compliance Department. Participation of the Finance Department is crucial to review invoice amounts for contracted parties and ensure that the contract is within the maximum amount originally agreed upon. The results of these internal audits will be presented quarterly to the Board of Directors. The Chief Compliance Officer is responsible for this planned corrective action. Completion of this planned corrective action is expected by January 2025.

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

  • 496829 2023-002
    Significant Deficiency
  • 496830 2023-002
    Significant Deficiency
  • 496831 2023-002
    Significant Deficiency
  • 496832 2023-002
    Significant Deficiency
  • 496833 2023-003
    Significant Deficiency
  • 496834 2023-003
    Significant Deficiency
  • 496835 2023-003
    Significant Deficiency
  • 496836 2023-003
    Significant Deficiency
  • 496837 2023-003
    Significant Deficiency
  • 1073270 2023-002
    Significant Deficiency
  • 1073271 2023-002
    Significant Deficiency
  • 1073272 2023-002
    Significant Deficiency
  • 1073273 2023-002
    Significant Deficiency
  • 1073274 2023-002
    Significant Deficiency
  • 1073275 2023-003
    Significant Deficiency
  • 1073276 2023-003
    Significant Deficiency
  • 1073277 2023-003
    Significant Deficiency
  • 1073278 2023-003
    Significant Deficiency
  • 1073279 2023-003
    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 $1.41M
93.493 Congressional Directives $212,407
93.495 Community Health Workers for Public Health Response and Resilient $113,638
93.224 Consolidated Health Centers (community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) $8,690