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 200.320 states the non-Federal entity must have and use documented procurement procedures following specific requirements for different methods of procurement depending on size and type of purchase. Thresholds for these categories (micro-purchase, simplified acquisition threshold) refer to using the Federal Acquisition Regulations (FAR), unless a different threshold has been specifically approved. Specifically, under FAR multiple quotes are generally required for purchases over the micro-purchase threshold, or documentation should be maintained explaining why multiple quotes were not obtained.
Condition: During our testing, we noted the Organization had a proper procurement policy that met the federal requirements, 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, two of the three the Organization was not able to provide documentation supporting the use of noncompetitive procurement. Based on understanding of the vendors and why they were selected, the vendors used appear reasonable, but there is insufficient documentation to support the Organization's policy was followed.
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 whichever procurement method was utilized in procuring vendors.
View of responsible officials: No disagreement with the finding. Management will review procedures to ensure proper procurement methodology is utilized under the Organization's policy, and that sufficient documentation is retained to support procurement method.