Finding 540425 (2024-001)

Reference Number: 2024-001 Federal Program Title: Public Health Emergency Preparedness Federal Assistance Listing Number: 93.069 Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: N/A Federal Award Number and Year: 6 NU90TP922022-05-00; Fiscal Year 2023-24 Name of Department: Department of Public Health Category of Finding: Procurement and Suspension and Debarment Type of Finding: Material Weakness in Internal Control Over Compliance; Material Noncompliance Criteria In accordance with Title 2 U.S. Code of Federal Regulations (CFR) § 180.200 a covered transaction is a nonprocurement or procurement transaction that is subject to the prohibitions of this part. Per 2 CFR § 180.970(a), nonprocurement transaction means any transaction, regardless of type (except procurement contracts), including, but not limited to grants. According to 2 CFR § 180.300, when the County enters into a covered transaction with another person at the next lower tier, the County must verify that the person is not excluded or disqualified. The County can do this by: 1. Checking System for Award Management (SAM) exclusions 2. Collecting a certification from that person; or 3. Adding a clause or condition to the covered transaction with that person. Per 2 CFR § 180.985, person means any individual, corporation, partnership, association, unit of government, or legal entity, however organized. Condition During our audit of the Department of Public Health (DPH) compliance with the procurement and suspension and debarment requirements for the Public Health Emergency Preparedness Program, we noted that for eleven (11) contracts, DPH did not provide documentation to demonstrate DPH verified that the vendor was not suspended or debarred from participating in federally funded contracts prior to entering into a covered transaction. Based on a subsequent review of the SAM exclusions, the vendors in question are not suspended or debarred. This is a repeat finding of 2023-008.   Cause DPH did not provide procurement and suspension and debarment documentation due to staff shortages and increased workload. Effect Failure to document verification of suspension and debarment results in noncompliance with 2 CFR § 180.300, and there is a risk that federal funds may be used to pay subrecipients and vendors that are suspended or debarred. Questioned Costs Questioned costs were not identified. Context For the thirty-eight (38) contracts selected for testing, which totaled $84,787 from a population of 160 contracts with expenditures totaling $2,616,122, DPH did not provide the suspension and debarment documentation for eleven (11) contracts with expenditures totaling $10,272. The sample was not a statistically valid sample. Recommendation We recommend that DPH either: 1) include a contract clause or condition to the covered transaction with that person, 2) check the SAM exclusions prior to entering into a contract and maintain documentation of that verification, or 3) collect a certification from that person.