Finding No.: 2019-007
Federal Agency: U.S. Department of Health and Human Services
CFDA Program: 93.104 Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances (SED)
Award Number: 5U79SM062447-04
Area: Procurement and Suspension and Debarment
Questioned Costs: $23,500
Criteria:
Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. CHCC’s procurement regulations, pursuant to the Commonwealth law, state the following:
• All procurement records shall be retained by the CHCC Procurement and Supply (P&S) Director for a period of seven (7) years after completion of construction, or full delivery of the goods or services under the contract.
• Competitive Sealed Bidding
Because of the unique nature and varied needs of all parts of the institution, the CEO and the CHCC Director of P&S shall make a determination as to the best way to publicize the Invitation to Bid (ITB). Every procurement in excess of $10,000 shall be publicized in one or more of the following ways:
(a) in a newspaper of general circulation;
(b) in a newspaper of local circulation in the area pertinent to the procurement;
(c) in industry media;
(d) through electronic mailing lists,
(e) through the internet, agency web site, or other publicly accessible electronic media,
(f) through electronic mailing lists, or
(g) in a government publication designed for giving public notice
• Competitive Sealed Proposal
Adequate public notice of the request for proposals shall be given in the same manner as provided for in competitive sealed bids.
Finding No.: 2019-007, continued
Federal Agency: U.S. Department of Health and Human Services
CFDA Program: 93.104 Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances (SED)
Award Number: 5U79SM062447-04
Area: Procurement and Suspension and Debarment
Questioned Costs: $23,500
Criteria, continued:
• Small Purchases
Bidding is not required but is encouraged for procurement over $5,000 and under $25,000, or $50,000 if it is medical equipment, supplies, or devices. The CEO, the official with expenditure authority, must obtain price quotations from at least three vendors and base the selection on competitive price and quality for procurement valued at $5,000 to $25,000 or $50,000 for medical equipment, supplies, or devices. Any price quotations obtained must be written, documented, and submitted to the CHCC P&S Director for approval.
Condition:
Of thirty-nine procurement samples tested, aggregating $56,383 of a total population of $220,635, the following deficiencies were noted:
1. For four (or 10%), the Invitation to Bid (ITB) or the Request For Proposal (RFP) publication notices and evaluation forms were not provided.
Finding No.: 2019-007, continued
Federal Agency: U.S. Department of Health and Human Services
CFDA Program: 93.104 Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances (SED)
Award Number: 5U79SM062447-04
Area: Procurement and Suspension and Debarment
Questioned Costs: $23,500
Condition, continued:
2. For seven (or 18%), the purchase requisitions and/or contracts were not provided. No questioned costs are presented as amounts are questioned at Condition 3.
3. For eight (or 21%), approval by the Expenditure Authority and the P&S Director were not evident.
Finding No.: 2019-007, continued
Federal Agency: U.S. Department of Health and Human Services
CFDA Program: 93.104 Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances (SED)
Award Number: 5U79SM062447-04
Area: Procurement and Suspension and Debarment
Questioned Costs: $23,500
Condition, continued:
4. For one (or 3%) small purchase, no evidence of effort to obtain three quotations.
Cause:
CHCC did not enforce compliance with established procurement policies and procedures over procurement.
Effect:
CHCC is in noncompliance with applicable procurement regulations and questioned costs of $23,500 result as the projected questioned costs exceed the $25,000 threshold.
Identification as a Repeat Finding: Finding No. 2018-013.
Recommendation:
The responsible personnel should monitor and enforce compliance with applicable procurement requirements, including the review of procurement files for completeness as to written rationale for any deviation from applicable procurement requirements.
Finding No.: 2019-007, continued
Federal Agency: U.S. Department of Health and Human Services
CFDA Program: 93.104 Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances (SED)
Award Number: 5U79SM062447-04
Area: Procurement and Suspension and Debarment
Questioned Costs: $23,500
Views of Responsible Officials:
CHCC’s Corrective Action Plan provides a detailed rationale for disagreement with the finding described in Conditions 1 to 4.
Auditor Response:
Condition 1 - ITB and RFP publication notices were not provided.
Condition 2 - Purchase requisitions and/or contracts were not provided.
Condition 3 - Documentations evidencing approval by the Expenditure Authority and the P&S Director were not provided.
Condition 4 - CHCC Corrective Action Plan stated no solicitation was obtained. In addition, documentations substantiating that the vehicle rental agreement was competitively procured during the initial year of the rental were not provided. Further, in accordance with 45 CFR Part 75.361 Retention requirements for records, financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award, must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the HHS awarding agency or pass-through entity in the case of a subrecipient.
In addition, initial draft reports were provided to CHCC on 09/06/24 and 09/24/24. It was also agreed during the 09/06/24 and 10/04/24 meetings for CHCC to provide corresponding underlying accounting records to resolve the finding; however, no documentations were provided within the agreed timeline. Accordingly, finding is sustained.