Finding Text
Federal agency: U.S. Department of Health and Human Services
Federal program title: Health Centers Cluster
Assistance Listing Number: 93.224/93.527
Award Period: Varying project and budget periods: 2/1/21 – 1/31/22, 2/1/22 – 1/31/23, 4/1/21 – 3/31/23
Type of Finding:
• Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: The Code of Federal Regulations section 200.214 requires the Center to follow the nonprocurement 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. The Organization should have policies and procedures in place to ensure contracts or subaward are not provided to third parties that are suspended or disbarred.
Condition: During our testing, we noted the Organization had a proper policy around suspension and debarment, but was not able to provide documentation supporting the policy was followed for all vendors selected.
Questioned costs: None.
Context: In our testing covering three vendors, the Organization was not able to provide documentation supporting the Organization had followed its suspension and debarment policy. All vendors were checked against the exclusion list at the time of audit testing, and none were found to be suspended/debarred.
Cause: Turnover in personnel at the Organization likely played a role, but the Organization was also focused on response to the COVID-19 pandemic at the time of vendor procurement. So timeliness was often most important in procuring vendors and related products/services.
Effect: Without retaining documentation to support proper compliance with the Organization's policy, there is greater risk of noncompliance or inappropriate vendor selection.
Recommendation: We recommend the Organization follow existing policy, but ensure procedures are in place to retain sufficient documentation to support review of vendors against federal exclusion list.
View of responsible officials: No disagreement with the finding. Management will review procedures to ensure proper check of vendors is performed against federal exclusion list, and that documentation is maintained to support that review.