Finding 503764 (2024-002)

2024-002 U.S. Department of Health and Human Services Federal Financial Assistance Listing #93.526 Grants for Capital Development in Health Centers Procurement, Suspension and Debarment Significant Deficiency In Internal Control Over Compliance Criteria – 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition – There was no evidence retained that the Community Health Center reviewed vendors to determine their status in regards to the suspension and debarment requirement. Furthermore, the Community Health Center did not have written suspension and debarment policies. Cause – The Community Health Center did not have an internal control policy in place to ensure a documented review and approval of the vendors for suspension and debarment took place prior to utilizing under the federal funds. Effect – The lack of adequate policies governing review and approval increases the risk that employees participating in the federal awards administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs – None reported. Context/Sampling – A nonstatistical sample of 2 out of 4 vendors were selected for detail testing and did not include evidence of a review for suspension and debarment. The Procurement Policy was reviewed in its entirety. Repeat Finding from Prior Years – No. Recommendation – We recommend the development of a Suspension and Debarment Policy as either a separate policy or part of the Procurement Policy which would require that vendors are investigated to ensure they have not been declared ineligible to receive federal dollars. The policy should include guidance on the need to maintain that documentation. Views of Responsible Officials – Management agrees with the finding.