Finding Text
Finding 2023-003 – Procurement
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Health Centers Cluster and Health Center Infrastructure Support
Assistance Listing Number: 93.224, 93.527 and 93.526
Federal Award Identification
Number: H80CS00824-21-00; H80CS00824-22-00; H8FCS41534-01-02;
C8EC44826-01-00
Award Periods: May 1, 2022 – April 30, 2023; May 1, 2023 – April 30, 2024; April 1, 2021– March 31, 2023; September 15, 2021 – September 15, 2024, respectively
Type of Finding: Compliance and material weakness in internal control over compliance
Criteria:
The non-federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price (2 CFR 200.318). Additionally, the non-federal entity must have and use documented procurement procedures, consistent with the standards of 2 CFR 200.320 which includes five acceptable methods of procurement which vary based on the size of the purchase and nature of the expense.
Condition:
For a portion of the year under audit, the Organization did not have a procurement policy that complied with 2 CFR 200.320 and did not maintain sufficient documentation to support the use of an approved or prequalified vendor listing. As a result of this, the Organization incorrectly applied the micro-purchase methodology to transactions which qualified for the simplified acquisition method. Questioned Costs:
Unknown.
Context:
Five (5) of five (5) transactions selected for procurement testing.
Cause:
The Organization did not have a procurement policy which was consistent with 2 CFR 200.230 during a specific period of time during the year under audit. During the last quarter of the fiscal year, the Organization did update its procurement policy to be consistent with the requirements of the Uniform
Guidance.
Effect:
Without an appropriate procurement policy, there is a potential to use federal grants in a manner which is not the most efficient and economical.
Repeat Finding:
No.