Finding Text
2022 ? 003 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: 1/1/22 ? 12/31/22, 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 Organization to follow the non-procurement 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 did follow formal policies and procedures in place to determine if vendors have been suspended or disbarred prior to entering into a contract, however for one of two selections tested the incorrect vendor name was used. Therefore, the internal control did not function as designed and the actual vendor used did not have documentation retained around check for exclusions. Questioned costs: None Context: During our testing, a sample of two disbursement transactions greater than $25,000 were selected for suspension and disbarment testing. The Organization followed procedures in both cases to check vendors against the 'System for Award Management (SAM) Exclusions'. For one of the vendors, however, the incorrect vendor name was used, and therefore incorrect data retained to support the exclusion check. In addition, the incorrect vendor did have a federal exclusion. The vendor the Organization actually used did not have an exclusion. Cause: The finding is just the result of manual error as an acronym was used for the vendor in the search that resulted in a different, incorrect vendor being the search result. Effect: If suspension and debarment policies and procedures are not operating effectively, it provides the opportunity for noncompliance due to transactions with suspended or disbarred parties. Repeat finding: No Recommendation: We recommend the Organization follow the suspension and debarment policy in its new procurement policy and also ensure the correct vendor is being searched via other identification methods besides just vendor name. Views of responsible officials: There is no disagreement with the audit finding.