Finding Text
Department of Health and Human Services
Federal Financial Assistance Listing #93.697
COVID‐19 Testing and Mitigation for Rural Health Clinics
Procurement, Suspension, and Debarment
Material Weakness in Internal Control over Compliance and Material Noncompliance
Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control
over federal awards that provides reasonable assurance that the Health System is managing the federal award in
compliance with federal statutes, regulations and terms and conditions of the federal award. The non‐Federal
entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR
200.318 through 200.327 which also requires documentation to be retained to detail the history of
procurements.
Condition: The Health System did not obtain quotes from multiple vendors as it relates to the procurement and
purchasing of flooring which was over the micro‐purchase threshold. In addition, Health System did not have a
written procurement policy or written standards of conduct policy related to procurement.
Cause: The Health System did not have a procurement policy in place.
Effect: Without obtaining multiple quotes and having a procurement policy or standards of conduct policy
related to procurement, demonstrating that the Health System complies with laws, regulations, and other
compliance requirements is difficult.
Questioned Costs: Covered transactions entered into by the Health System over the micro‐purchase threshold
without multiple quotes totaled $147,460. Questioned costs are unable to be identified as multiple quotes were
not received by the Health System to ensure the price paid was reasonable.
Context: Sampling was not used as only three vendors had purchases over $10,000.
Repeat Finding from Prior Years: No
Recommendation: We recommend the Health System implement a procurement policy and standards of
conduct policy related to procurement, implement internal control processes to ensure compliance with their
procurement policy, and retain documentation to support procurement, suspension and debarment procedures
performed.
Views of Responsible Officials: Management agrees with the finding.