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: 1/1/21 ? 12/31/21, 4/1/20 ? 3/31/21, 5/1/20 ? 4/30/21, 3/15/20 ? 3/14/21, 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 Health Center 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 Health Center should have policies and procedures in place to ensure contracts or subaward are not provided to third parties that are suspended or disbarred, and retain documentation to support those procedures are being followed. Condition: During our testing, we noted the Health Center was not able to provide documentation to support that policies or procedures in place had been followed to determine if vendors have been suspended or disbarred prior to entering into a contract. Questioned costs: None Context: During our testing, a sample of three disbursement transactions greater than $25,000 were selected for suspension and disbarment testing. The Health Center did not have documentation available to support there was a check of the 'System for Award Management (SAM) Exclusions' or other procedures to ensure third parties were not suspended or disbarred. The vendor selected was compared to the SAM Exclusions at the time of testing and was noted to not be suspended or disbarred, although the testing could not be performed back to the date of the transaction. Cause: The Health Center either did not follow policies and procedures under the procurement policy related to suspension or debarment, or did not retain support of control procedures being performed. Effect: The lack of documentation or control over the formal suspension and debarment policy provides the opportunity for noncompliance due to transactions with suspended or disbarred parties. Repeat finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number 2021-003 was a significant deficiency. Recommendation: We recommend the Health Center follow the suspension and debarment policy with all applicable transactions, and retain documentation supporting the procedures performed. Views of responsible officials: There is no disagreement with the audit finding. Policy and procedures were put in place late in 2022 in response to the prior year audit finding.