Finding 540528 (2024-001)

Material Weakness
Requirement
I
Questioned Costs
$1
Year
2024
Accepted
2025-03-28
Audit: 350276
Organization: Mental Health Center of Denver (CO)

AI Summary

  • Core Issue: WellPower failed to obtain required price quotes for a $61,526 purchase and did not verify vendor suspension or debarment status.
  • Impacted Requirements: This non-compliance violates procurement standards outlined in 2 CFR 200.318 and suspension/debarment rules in 2 CFR Part 180.
  • Recommended Follow-Up: WellPower should adhere to its procurement policies, review compliance with Uniform Guidance, and provide training for procurement staff.

Finding Text

Finding: Procurement and Suspension & Debarment Assistance Listing No. 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds U.S. Department of Treasury Passed-Through from Colorado Mental Health Services Award Year: 2024 Award Number: CMS 179319 Criteria: In accordance with 2 CFR 200.318, non-Federal entities must have and use documented procurement procedures, consistent with State and local 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 2 CFR 200.317 through 200.327. In accordance with 2 CFR Part 180, contracts cannot be entered with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in federal awards. WellPower's procurement policy requires the following: A. For purchases between $10,000 and $49,999 WellPower is required to obtain a minimum of two quotes and for purchases exceeding $50,000 WellPower is required to obtain three written quotes or bids. All bids and quotes received must be attached to the purchase requisition. B. For purchases using sponsored project funds, such as federal grants, the policy states that procurement has to be made in accordance with grant's terms and conditions. To be compliant with the grant and in accordance with 2 CFR Part 180, WellPower must verify that the vendor selected for procurement is not suspended or debarred when procurement or non-procurement transaction exceeds or is equal to $25,000. Condition: WellPower did not obtain price quotes related to a purchase of $61,526, which fell within the small purchases threshold. In addition, WellPower did not retain support for a check of suspension and debarment. Questioned Costs: $61,526 Context: We tested one out of five of WellPower's small procurement purchases, which was related to an information technology purchase during fiscal year 2024 in the amount of $61,526 and noted the above issue. A non-statistical sampling methodology was used to select the sample. Effect: WellPower was not in compliance with its procurement and suspension and debarment policies and the Uniform Guidance. Cause: WellPower did not follow its internal control policies by obtaining adequate documentation to support its procurement decisions and did not retain timely suspension and debarment checks. Identification as a repeat finding: Not a repeat finding Recommendation: We recommend that WellPower follows its procurement procedures in accordance with 2 CFR 200.317 through 200.327 and suspension and debarment policies and requirements in accordance to 2 CFR Part 180 for the acquisition of property or services as required under a Federal award or sub-award. We also recommend that WellPower review its procurement policy to ensure that it complies with Uniform Guidance. In addition, in order to facilitate compliance with its internal control policies, we recommend training for the procurement department and other authorized purchasers within WellPower. Views of responsible officials: WellPower agrees with the finding. See separate report for planned corrective actions.

Categories

Questioned Costs Procurement, Suspension & Debarment

Other Findings in this Audit

  • 540527 2024-001
    Material Weakness
  • 1116969 2024-001
    Material Weakness
  • 1116970 2024-001
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.997 Assisted Outpatient Treatment $750,996
14.871 Section 8 Housing Choice Vouchers $528,412
93.958 Block Grants for Community Mental Health Services $512,850
93.778 Medical Assistance Program $482,853
14.195 Project-Based Rental Assistance (pbra) $479,433
93.575 Child Care and Development Block Grant $440,817
14.239 Home Investment Partnerships Program $405,000
10.558 Child and Adult Care Food Program $128,162
14.241 Housing Opportunities for Persons with Aids $120,000
93.434 Every Student Succeeds Act/preschool Development Grants $115,901
14.267 Continuum of Care Program $104,206
93.914 Hiv Emergency Relief Project Grants $48,285
93.074 Hospital Preparedness Program (hpp) and Public Health Emergency Preparedness (phep) Aligned Cooperative Agreements $41,300
93.959 Block Grants for Prevention and Treatment of Substance Abuse $24,450
93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance $10,215
93.433 Acl National Institute on Disability, Independent Living, and Rehabilitation Research $9,377
21.027 Coronavirus State and Local Fiscal Recovery Funds $7,254