Finding No.: 2019-016
Federal Agency: U.S. Department of Health and Human Services
CFDA Program: 93.870 Maternal, Infant and Early Childhood Home Visiting Grant Program
Award Number: 1X10MC31162-01-00
Area: Procurement and Suspension and Debarment
Questioned Costs: $60,104
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.
• 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.
Finding No.: 2019-016, continued
Federal Agency: U.S. Department of Health and Human Services
CFDA Program: 93.870 Maternal, Infant and Early Childhood Home Visiting Grant Program
Award Number: 1X10MC31162-01-00
Area: Procurement and Suspension and Debarment
Questioned Costs: $60,104
Criteria, Continued:
• Sole Source Procurement
A written justification for sole source procurement shall be prepared by the CEO, the official with expenditure authority, and shall contain the specific unique capabilities required; the specific unique capabilities of the contractor; the efforts made to obtain competition; and the specific considerations given to alternative sources and specific reasons why alternative sources were not selected.
Condition:
Of thirty-seven nonpayroll expenditures tested, aggregating $75,546 of a total population of $212,059, the following deficiencies were noted:
1. For five (or 14%), written justifications by the Official Expenditure Authority for the sole source procurement method used were not provided.
2. For twelve (or 32%), the Invitation to Bid or Request for Proposal publications notices were not provided.
Finding No.: 2019-016, continued
Federal Agency: U.S. Department of Health and Human Services
CFDA Program: 93.870 Maternal, Infant and Early Childhood Home Visiting Grant Program
Award Number: 1X10MC31162-01-00
Area: Procurement and Suspension and Debarment
Questioned Costs: $60,104
Condition, continued:
3. For nine (or 24%), purchase requisitions and/or contracts were not provided. No questioned costs are presented as amounts are questioned at Condition 4.
Finding No.: 2019-016, continued
Federal Agency: U.S. Department of Health and Human Services
CFDA Program: 93.870 Maternal, Infant and Early Childhood Home Visiting Grant Program
Award Number: 1X10MC31162-01-00
Area: Procurement and Suspension and Debarment
Questioned Costs: $60,104
Condition, continued:
4. For nine (or 24%), approval by the Expenditure Authority and the P&S Director were not evident.
5. For three (or 8%), either the purchase order was not provided or was not signed by the P&S Director. No questioned costs are presented as amounts are questioned at Condition 4.
6. For one (or 3%) small purchase, no evidence of effort to obtain three quotations. No questioned costs are presented as the amount is questioned at Condition 4.
Finding No.: 2019-016, continued
Federal Agency: U.S. Department of Health and Human Services
CFDA Program: 93.870 Maternal, Infant and Early Childhood Home Visiting Grant Program
Award Number: 1X10MC31162-01-00
Area: Procurement and Suspension and Debarment
Questioned Costs: $60,104
Cause:
CHCC did not enforce compliance with established policies and procedures over procurement.
Effect:
CHCC is in noncompliance with applicable procurement regulations and questioned costs of $60,104 result.
Identification as a Repeat Finding: Finding No. 2018-025.
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.
Views of Responsible Officials:
CHCC’s Corrective Action Plan states agreement with the finding described in Conditions 1 to 6; however, disagrees with the questioned costs.
Auditor Response:
Conditions 1 to 6 - Questioned Costs are warranted given transactions tested were not supported by adequate documentations.
Finding No.: 2019-016, continued
Federal Agency: U.S. Department of Health and Human Services
CFDA Program: 93.870 Maternal, Infant and Early Childhood Home Visiting Grant Program
Award Number: 1X10MC31162-01-00
Area: Procurement and Suspension and Debarment
Questioned Costs: $60,104
Auditor Response, continued:
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.