Finding 499180 (2023-003)

Federal Agency: U.S. Department of Health and Human Services Assistance Listing Numbers: 93.550 & 93.623 Federal Program Titles: Transitional Living for Homeless Youth; Basic Center Grant Award Period: October 1, 2022 through September 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Code of Federal Regulations 2 CFR 200.318, General procurement standards, requires that non-Federal entities must have documented procurement procedures, consistent with State and local laws and regulations for the acquisition of property or services required under a federal award and subaward. The non-Federal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.318 through 200.326. Condition: During our testing, we noted that the Organization’s procurement policy did not address all of the identified requirements in 2 CFR 200.318 through 200.326. Questioned Costs: None. Context: In our review of the current procurement policy, The Adams Group, LLC noted the following: The policy did not include documented procedures for purchases above the simplified acquisition threshold ($250,000) in accordance with 2 CFR 200.320b. The policy did not include documented procedures for the use and instances of noncompetitive procurement in accordance with 2 CFR 200.320c. The policy did not include documented procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded as outlined in 2 CFR sections 200.212 and 200.318. We also noted that the Organization did not verify that the entities with which it entered into contracts were not debarred, suspended, or otherwise excluded. Effect: The Organization’s procurement policy is not in compliance with general procurement standards, and proper verification procedures for potentially suspended or debarred entities were not performed. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization update their procurement policy to address all requirements identified in 2 CFR 200.318 through 200.326. Views of Responsible Officials: Management agrees with the finding.