Finding Text
Finding 2022-003 – Inadequate Design of Monitoring Controls over Procurement Policies, Assistance Listing 93.224 Health Center Program, Affordable Care Act Grants for New and Expanded Services Under the Health Center Program and Assistance Listing 93.526 Grants for Capital Development in Health Centers.
Criteria: 2 CFR 200.320 requires the non-Federal entity to have and use documented procurement procedures that are consistent with the standards of that section. Additionally, Management is responsible for the design, implementation, and maintenance of effective internal controls over compliance with requirements of laws, statutes, regulations, rules and provisions of contracts or grant agreements to prevent, or detect and correct non-compliance on a timely basis.
When small purchase procedures are used, 2 CFR 200.320(a)(2) requires price or rate quotations to be obtained from an adequate number of qualified sources. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the methods prescribed by 2 CFR 200.320(b) or (c): the sealed bid method; the competitive proposals method; or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c)).
Condition: Procurement documentation for three vendors tested was not prepared and/or retained to support compliance with the regulations above and the Center’s procurement policy. All three vendors received funding under Federal awards. One vendor, Ark Marketing Group, received HRSA American Rescue Plan Act funding which is part of major program and is a related party to the former Business Development Director. The other two vendors, Whitespace Architects and Project Management Inc. received funding under the HRSA ARPA Capital award which is not part of the major program.
Context and Cause of Condition: Although the Center has established policies and procedures in place over the procurement process, there was a lack of documentation to support that the procurement process had been completed as required.
Potential Effect: Failure to perform and/or retain documentation of the procurement process resulted in noncompliance with the procurement requirement.
Questioned Costs: None
Recommendation: Recommend to consistently follow the existing procurement policy and to maintain documentation through the recommended terms outlined in the award.
See Management’s Response and Corrective Action Plans on page 32.