Finding Text
Federal agency: U.S. Department of Health and Human Services
Federal program title: Rural Communities Opioid Response Program – Medication Assisted Treatment (MAT) Expansion and COVID-19 Rural Health Clinic Vaccine Confidence
Assistance Listing Number: 93.912
Award Period: September 1, 2019 through August 31, 2022
Type of Finding:
• Significant Deficiency in Internal Control over Compliance and Other Matters
Criteria or specific requirement: The Code of Federal Regulations section 200.320 states the non-Federal entity must have and use documented procurement procedures following specific requirements for different methods of procurement depending on size and type of purchase. Thresholds for these categories (micro-purchase, simplified acquisition threshold) refer to using the Federal Acquisition Regulations (FAR), unless a different threshold has been specifically approved. Specifically, under FAR multiple quotes are generally required for purchases over the micro-purchase threshold, or documentation should be maintained explaining why multiple quotes were not obtained.
Condition: During our testing, we noted the Health System did not have a properly documented procurement policy that met the federal requirements. As a result there were vendors over the micro purchase threshold that were tested where retained documentation was not sufficient to support procurement method or noncompetitive procurement in line with federal requirements.
Questioned costs: None
Context: The Health System maintained detailed records of eligible uses of federal funds for tracking and required reporting purposes. Eligible expenditures were reviewed by the CFO and followed standard organizational internal control processes (i.e., AP), but ultimately did not follow a procurement policy in line with Uniform Guidance requirements.
Cause: The Health System has not previously received federal awards in an amount sufficient to require an audit under Uniform Guidance. Therefore, more formal controls and policies around the use of federal awards had not been in place.
Effect: The lack of documented procurement policies over these compliance requirements provides an opportunity for noncompliance.
Repeat finding: No
Recommendation: We recommend the Health System create and implement a procurement policy that meets the requirements of federal regulations. The Health System should also maintain documentation to support procurement method used and compliance with policy when procuring vendors for federal grant funded projects.
Views of responsible officials: There is no disagreement with the audit finding.