Boone Memorial Hospital, Inc.Non-Profit

Assistance Listing #93.788 Opioid STR Significant Deficiency Criteria: The Uniform Guidance procurement regulations outlined in 2 CFR Part 200 Subpart D and applicable state and entity-level regulations require appropriate internal controls over the acquisition of goods and services to ensure compliance with such regulations, including maintaining formal written documentation of compliance with regulations depending on the dollar amount of purchase or for a non-competitive situation. Proper supervisory review controls to ensure compliance with such regulations are an important part of the internal control framework. Condition: During our procurement testing procedures, we noted a purchase of $10,000 for marketing services for which management failed to obtain and document compliance with the requirement to obtain price quotations from a reasonable number of qualified marketing service providers. Additionally, we noted an additional purchase for which management did not maintain contemporaneous formal written documentation supporting a non-competitive single source purchase. Management was later able to provide documentation supporting that this purchase met the qualifying requirements for a non-competitive situation. Cause: Management indicated that they did not obtain quotes for the marketing services as they felt that the quote obtained from the Hospital’s current external marketing service provider was reasonable in all material respects. Management noted that the failure to maintain contemporaneous documentation was an oversight due to turnover of various staff involved in the grants oversight process. Effect: Price quotations from a reasonable number of qualified service providers were not obtained for the purchased marketing services: thus, it is unknown if such services could have been provided for a lower amount. Questioned Costs: $10,000 Context: The population of expenses subject to procurement standards were sampled and a sample of two items greater than the micro-purchase threshold were selected for testing. Of those sampled, the one marketing purchase noted above was found to not be supported by quotes from a reasonable number of qualified sources. The sample was not considered statistically valid. Identification as a Repeat Finding: N/A Recommendation: The Hospital should ensure that individuals involved in the grants administration process receive the appropriate training to ensure their understanding of the Uniform Guidance, state and Hospital procurement requirements. For purchases greater than the micro-purchase threshold (i.e., $10,000 and greater), internal controls should be enhanced to ensure supervisory review for compliance with contemporaneous formal written documentation for quotes, bids, or qualification for non-competitive proposal requirements. Regulations specify at least three quotes from qualified sources, as applicable. Views of Responsible Officials: See corrective action plan.