MERCY HEALTH CORPORATION

Finding 2019-001 U.S. Department of Health and Human Services CFDA 93.074 National Bioterrorism Hospital Preparedness Program Procurement, Suspension, and Debarment Criteria: The Corporation is required to meet minimum Federal procurement standards, including the following: ? 2 CFR 215.43 require that a non-Federal entity implement certain procurement policies that adhere to the minimum Federal requirements as outlined in 2 CFR 215.44. Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR part 200. ? 2 CFR 200.318(i) and 45 CFR 75.327(i) require that a non-Federal entity maintain records sufficient to detail the history of procurements. 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 rejections, and the basis for contract price. 2 CFR 200.320(f) and 45 CFR 75.329(f) only allow procurement by noncompetitive proposals through only one source when one of the following applies: - The item is only available from a single source; - A public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation; - The Federal awarding agency or pass-through entity expressly authorizes noncompetitive proposals in response to a written request from the non-Federal entity; or - After solicitation of a number of sources, competition is determined inadequate. ? 2 CFR Section 180.300 states that when entering into a covered transaction, the non-federal entity must verify that entity is not suspended or debarred or otherwise excluded from federal contracts. Condition: The Corporation does not have a procurement policy that is in compliance with procurement standards as put forth in 2 CFR sections 200.318 through 200.326. For 2019, we examined 5 procurements that were greater than the small acquisition threshold. None of those selected met minimum procurement requirements by lacking written quotes, documentation, support for sole source determination, justification and approval and documentation that suspension and debarment procedures were performed.Cause: Personnel were not aware of the minimum Federal requirement for procurement. Effect: The Corporation was not in compliance with federal regulations surrounding procurement. Context: The Corporation?s policies surrounding procurement did not meet minimum Federal guidelines and therefore minimum Federal requirements around purchases were not met. Recommendation: The Corporation should implement a procurement policy that is in compliance with procurement standards required in 2 CFR sections 200.318 through 200.326. View of Responsible Officials: See corrective action plan.

Mercy Health Corporation is preparing a Government Grant purchasing policy that will be in effect by June 30, 2020. This policy will include the Federal procurement guidelines in 2CFR part 200 in order to meet the minimum Federal procurement standards for all government grants received.