Finding 52051 (2022-007)

Material Weakness Repeat Finding
Requirement
I
Questioned Costs
-
Year
2022
Accepted
2023-08-29

AI Summary

  • Core Issue: Lack of documentation for competitive price analysis and vendor verification, violating procurement standards.
  • Impacted Requirements: Non-compliance with Uniform Guidance Sections 200.318 and 200.214 regarding procurement procedures and vendor eligibility.
  • Recommended Follow-Up: Update procurement policy to meet standards and review vendor files for necessary documentation.

Finding Text

Condition There is no formal documentation or evidence to support that competitive price analysis for vendors selected by CCI several years ago or that suspension and debarment verifications were performed for vendors, as required by the general procurement standards of the Uniform Guidance. Context We selected two samples which were deemed sole sourced by management and noted no written documentation for this conclusion or evidence of suspension or debarment verification being performed was maintained in the file. Based on our discussions with management, we understand that the arrangements with these vendors were established several years ago. Criteria Under Uniform Guidance Section 200.318, General Procurement Standards, a non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity?s documented procurement procedures must conform to the procurement standards identified in Sections 200.317 through 200.327. These sections include policies and procedures related to competition, informal and formal procurement methods and noncompetitive procurement also known as sole source. Under Uniform Guidance Section 200.214, Suspension and Debarment and 2 CFR part 180, non-federal entities are required to verify that vendors are not suspended or debarred from participating in federal funds. Cause CCI?s procurement policy was not updated to include the provisions of the general procurement standards required under the Uniform Guidance. Effect Charges relating to vendor services that were charged to the federal award may not be in accordance with the Uniform Guidance. Questioned Costs None. Repeat Finding Yes. Recommendation We recommend that CCI update its existing procurement policy governing contracts with vendors that will be reimbursed by federal grants to incorporate all of the provisions included in the general procurement standards of the Uniform Guidance Section 200.318 and the debarment and suspension regulations of Uniform Guidance Section 200.214. We also recommend that a review of all vendor contract files be performed to ensure that the documentation as required under the Uniform Guidance is maintained in the files. Views of Responsible Officials and Planned Corrective Action See corrective action plan.

Corrective Action Plan

Finding No. 2022-007: Procurement Policy - Material Weakness in Internal Control Over Financial Reporting U.S. Department of Health and Human Services, Health Center Program Cluster; CDFA No. 93.224 Condition: There is no formal documentation or evidence to support that competitive price analysis for vendors selected by CCI several years ago or that suspension and debarment verifications were performed for vendors, as required by the general procurement standards of the Uniform Guidance. Recommendation: Marcum recommends that CCI update its existing procurement policy governing contracts with vendors that will be reimbursed by federal grants to incorporate all of the provisions included in the general procurement standards of the Uniform Guidance Section 200.318 and the debarment and suspension regulations of Uniform Guidance Section 200.214. Marcum also recommend that a review of all vendor contract files be performed to ensure that the documentation as required under the Uniform Guidance is maintained in the files. Action Taken: CCI is recommending to the board to update its procurement policy by obtaining at a minimum-three separate bids for anything above $50,000.00. We are also in the process of hiring a full-time purchasing manager to oversee procurement policy and strategy. Anticipated Completion/Implementation Date: End of fiscal year 2024.

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

  • 52050 2022-005
    Material Weakness Repeat
  • 52052 2022-005
    Material Weakness Repeat
  • 52053 2022-006
    Material Weakness
  • 628492 2022-005
    Material Weakness Repeat
  • 628493 2022-007
    Material Weakness Repeat
  • 628494 2022-005
    Material Weakness Repeat
  • 628495 2022-006
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.224 Consolidated Health Centers (community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) $8.59M
10.557 Special Supplemental Nutrition Program for Women, Infants, and Children $4.43M
93.566 Refugee and Entrant Assistance_state Administered Programs $2.42M
93.217 Family Planning_services $2.26M
93.498 Provider Relief Fund $29,251