Lubbock County Hospital District d/b/a UMC Health SystemLocal Government

Mental and Behavioral Health Education and Training Grants Assistance Listing No. 93.732 U.S. Department of Health and Human Services Program Year 2024 Criteria or Specific Requirement – Procurement, Suspension and Debarment (2 CFR 200.317 – 200.327; 2 CFR 180.220) Condition – The District is required to follow its own documented procurement procedures which conform to the Uniform Guidance procurement standards. Questioned Costs – $56,306 - calculated as contracts tested that were not properly procured and known contracts tested in prior years that were not properly procured. Context – Out of a population of five contracts directly charged to the grant that were above the micro-purchase threshold, two contracts were selected for testing. Our sampling method was not and was not meant to be statistically valid. The District did not obtain price or rate quotations from an adequate number of qualified sources for one of the vendors selected for testing. Although not selected for testing, the vendor related to the 2023-001 finding was also included in the population of contracts directly charged to the grant. Therefore, questioned costs also include expenses for a second vendor for which it is known the District did not obtain price or rate quotations from an adequate number of qualified sources. Effect – The District did not provide for full and open competition in procuring services with grant funds. Cause – The District included the vendors in the grant application and program narrative which was approved by the grantor. After notification of approval, the District moved forward with the vendors and did not follow procurement guidelines. Identification as a repeat finding – 2023-001 Recommendation – Contracts directly charged to a federal award should be reviewed to ensure compliance with the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions – Responsible Official: Aaron Davis, VP & Chief Experience Officer Planned Corrective Actions: The first contract in question was for a vendor (Healthsource Solutions) already under contract with the District prior to the grant application. The vendor in question had been used since at least 2010, with the most recent contract for the current wellness portal (Wellness +) beginning in 2017. Because of the success of the wellness portal and established relationship with the vendor, the District included expansion of existing platforms and additional services provided by Healthsource Solutions as a large component of the Methodology/ Approach in the proposed activities of the grant narrative submitted. Use of this vendor and its applications were specifically outlined in the grant project narrative and a critical component of meeting grant objectives. The second contract in question was for the Evaluation Group, which provided specific services around grant program evaluation. This vendor was included in the original grant application and selected via the grant consultant used during the grant application process. The District follows the Lubbock County Purchasing Guidelines, which conform to the Uniform Guidance procurement standards. The District has reviewed the specified requirements of the Uniform Guidance for procurement standards, specifically related to noncompetitive procurement and concurs that formal procurement methods were not used for expansion of new services with this existing vendor nor was adequate documentation provided for noncompetitive procurement. In order to ensure compliance with the Uniform Guidance, the District will provide training to existing grant Program Managers on Uniform Guidance procurement standards. Additionally, if a new grant is being pursued, the grant committee should receive training on Uniform Guidance procurement standards before completing grant applications. On existing or future grants, any potential contracts or purchases over $75,000 should be reviewed by the grant Program Manager (or Grant Committee lead if a Program Manager has not yet been assigned) to ensure all procurement guidelines are followed and sufficient documentation is obtained prior to purchase or contract execution.

Mental and Behavioral Health Education and Training Grants Assistance Listing No. 93.732 U.S. Department of Health and Human Services Program Year 2024 Criteria or Specific Requirement – Activities Allowed/Unallowed and Allowable Costs/Cost Principles (Pub. L. No. 116-136, 134 Stat. 563 and Pub. L. No. 116-139, 134 Stat. 622 and 623) Condition – The District should only charge and be reimbursed by the grant for allowable expenditures based on the grant agreement. Questioned Costs – $4,579 – calculated as expenditures tested related to unallowable meal costs. Context – During the year, the District held a conference which was primarily funded by the grant. Included in conference expenditures charged to the grant were meal catering costs which are not allowable based on grant requirements. Effect – The District charged unallowable costs to the grant. Cause – The District included meal cost as grant expenditures which were incurred through a conference primarily funded by the grant. Identification as a repeat finding – N/A Recommendation – Expenses directly charged to a federal award should be reviewed to ensure costs are allowable. Views of Responsible Officials and Planned Corrective Actions – Responsible Official: Aaron Davis, VP & Chief Experience Officer Planned Corrective Actions: We were using verbal guidance around meals, specifically page 84 of HHS Grants Policy Statement which states as follows under Consumer/ Provider Board Participation: “Allowable in accordance with applicable program regulations. When not specifically authorized by program regulations, only the following costs are allowable with OPDIV prior approval: The reasonable costs of necessary meals furnished by the recipient to consumer or provider participants during scheduled meetings if not reimbursed to participants as per diem or otherwise.” The conference in question was held outside some participants shift time so light refreshments were provided. However, in order to ensure compliance with the Notice of Award Terms and Conditions Grant Specific Term #5, the University Medical Center will not submit unallowable meal costs and provide refresher for existing grant Program Managers to ensure they understand the terms and conditions to avoid unallowable costs and discuss the terms and conditions with the HRSA Grants Management Specialist and Project Officer if questions arise.

Mental and Behavioral Health Education and Training Grants Federal Assistance Listing No. 93.732 U.S. Department of Health and Human Services Program Year 2023 Criteria or Specific Requirement – Procurement, Suspension and Debarment (2 CFR 200.317 – 200.327; 2 CFR 180.220) Condition – The District is required to follow their own documented procurement procedures which conform to the Uniform Guidance procurement standards. Questioned Costs – $76,751 Context – Out of a population of nine contracts directly charged to the grant that were above the micro-purchase threshold, 2 contracts were selected for testing. Our sampling method was not and was not meant to be statistically valid. The District did not obtain price or rate quotations from an adequate number of qualified sources for one of the vendors selected for testing. Effect – The District did not provide for full and open competition in procuring services with grant funds. Cause – The District had previously been using the vendor and added services to meet the requirements of the grant, and the District did not follow procurement procedures and policies upon charging the services to the grant. Identification as a repeat finding – N/A Recommendation – Contracts directly charged to a federal award should be reviewed to ensure compliance with the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions – Responsible Official: Aaron Davis, VP & Chief Experience Officer Planned Corrective Actions: The contract in question was for a vendor (Healthsource Solutions) already under contract with Lubbock County Hospital District dba University Medical Center prior to the grant application. The vendor in question had been used since at least 2010, with the most recent contract for the current wellness portal (Wellness +) beginning in 2017. Because of the success of the wellness portal and established relationship with the vendor, University Medical Center included expansion of existing platforms and additional services provided by Healthsource Solutions as a large component of the Methodology/Approach in the proposed activities of the grant narrative submitted. Use of this vendor and its applications were specifically outlined in the grant project narrative and a critical component of meeting grant objectives. University Medical Center follows the Lubbock County Purchasing Guidelines, which conform to the Uniform Guidance procurement standards. University Medical Center has reviewed the specified requirements of the Office of Management and Budget Uniform Guidance for procurement standards, specifically related to noncompetitive procurement and concurs that formal procurement methods were not used for expansion of new services with this existing vendor or adequate documentation was provided for noncompetitive procurement. In order to ensure compliance with the Uniform Guidance, the University Medical Center will provide training to existing grant Program Managers on Uniform Guidance procurement standards. Additionally, if a new grant is being pursued the grant committee should receive training on Uniform Guidance procurement standards before completing grant applications. On existing or future grants, any potential contracts or purchases over $75,000 should be reviewed by the grant Program Manager (or Grant Committee lead if a Program Manager has yet been assigned) to ensure all procurement guidelines are followed and sufficient documentation is obtained prior to purchase or contract execution. The corrective actions will be immediately implemented at the District.