Finding 538764 (2022-004)

Significant Deficiency
Requirement
I
Questioned Costs
-
Year
2022
Accepted
2025-03-28
Audit: 349473
Organization: New Hampshire Children's Trust (NH)
Auditor: Cbiz CPAS PC

AI Summary

  • Core Issue: Weaknesses in internal controls over procurement led to missing documentation for sole source justifications.
  • Impacted Requirements: Non-compliance with OMB’s procurement standards and the Organization’s own procurement policy.
  • Recommended Follow-Up: Strengthen controls to ensure proper documentation and review processes for vendor selection are in place.

Finding Text

2022-004 Improve Controls and Documentation Over Procurement Federal Program Information Federal Agency: Department of Health and Human Services, Centers for Disease Control and Prevention Award Name(s): Injury Prevention and Control Research and State and Community Based Programs; Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises Assistance Listing Number(s): 93.136, 93.391 Award Year: 2022 Compliance Requirement: Procurement Type of Finding Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement OMB’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires that grant recipients follow procurement procedures for the acquisition of property or services under a federal award. Grantees are required to comply with certain procurement standards as defined in 2 CFR 200.318. These standards include the requirement that the grantee must use its own documented procurement procedures provided that they conform to applicable federal law. In addition, the grantee must maintain records sufficient to detail the history of procurement. Condition and Context During our audit, we tested a sample of two procurement transactions under assistance listing number 93.136 and one transaction under assistance listing number 93.391 for vendors with expenditures between $10,000 and $49,999 during fiscal year 2022. Of the transactions tested, all were missing supporting documentation to validate justification of why it was sole source as approvals were done verbally between the requestor and the Executive Director. In addition, one transaction under assistance listing number 93.136 did not qualify as meeting the requirements of sole source based on the Organization’s procurement policy. Cause The Organization did not have adequate controls or policies in place to maintain formal evidence of sole source justification and to ensure procurement policy was adhered to. Effect or Potential Effect Due to the weakness in internal controls and compliance finding noted above, there is a risk that contracts may be awarded to vendors in a manner that is not consistent with Federal procurement requirements and the Organization’s procurement policy. No questioned costs are reported as it is not quantifiable. Recommendation The Organization should address the weaknesses in internal controls noted above in order to ensure that federal procurements are conducted in accordance with federal requirements and supporting documentation is maintained to support such conclusion. The Organization should ensure that prior to entering into transactions, a review is performed over vendor selection and all required documentation is retained. Views of Responsible Official Management agrees with the finding. Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.

Corrective Action Plan

Audit Finding Reference: 2022-004 Improve Controls and Documentation Over Procurement Planned Corrective Action: Revise Policy and Procedure Policies to require prior written approval from the Executive Director prior to entering into any agreement for expenditures between $10,000 and $49,999. If it is a sole source, written justification must be submitted and approved by Executive Director prior to execution of agreement. If multiple bids were obtained, these must also be submitted and the selected vendor approved by Executive Director prior to execution of agreement. Planned Implementation Date of Corrective Action: 2/5/2025 Person Responsible for Corrective Action: Director of Finance

Categories

Procurement, Suspension & Debarment Allowable Costs / Cost Principles Significant Deficiency

Other Findings in this Audit

  • 538760 2022-002
    Significant Deficiency
  • 538761 2022-002
    Significant Deficiency
  • 538762 2022-003
    Significant Deficiency
  • 538763 2022-003
    Significant Deficiency
  • 538765 2022-004
    Significant Deficiency
  • 538766 2022-005
    Significant Deficiency
  • 538767 2022-005
    Significant Deficiency
  • 1115202 2022-002
    Significant Deficiency
  • 1115203 2022-002
    Significant Deficiency
  • 1115204 2022-003
    Significant Deficiency
  • 1115205 2022-003
    Significant Deficiency
  • 1115206 2022-004
    Significant Deficiency
  • 1115207 2022-004
    Significant Deficiency
  • 1115208 2022-005
    Significant Deficiency
  • 1115209 2022-005
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
93.391 Activities to Support State, Tribal, Local and Territorial (stlt) Health Department Response to Public Health Or Healthcare Crises $1.12M
93.136 Injury Prevention and Control Research and State and Community Based Programs $1.09M
93.556 Marylee Allen Promoting Safe and Stable Families Program $182,913
93.590 Community-Based Child Abuse Prevention Grants $89,994
93.575 Child Care and Development Block Grant $47,175
93.670 Child Abuse and Neglect Discretionary Activities $29,146