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HHS Did Not Identify and Report Antideficiency Act Violations

Issued on  | Posted on  | Report number: A-03-13-03002

The Program Support Center (PSC) obligated and expended funds for 17 of the 30 contracts we reviewed in accordance with appropriations law and Federal acquisition requirements; however, for the remaining 13 contracts, the PSC did not always obligate and expend funds for its contracts in compliance with applicable law and requirements, resulting in unreported Antideficiency Act obligation violations totaling $20.3 million and expenditure violations totaling $29.2 million. Also, for 4 of the 30 contracts reviewed, the PSC incorrectly extended the period of performance and the fiscal year funding beyond its 12 month period of availability. In addition, the PSC did not always submit contracts to the Office of Grants and Acquisition Policy and Accountability and Office of General Counsel for appropriations funding reviews before awarding the contracts. These conditions occurred because the PSC (1) funded nonseverable service contracts incrementally; (2) expended funds on a first-in, first-out basis instead of on the basis of a fund's period of availability; and (3) did not use correct product/service codes. Further, the Unified Financial Management System did not validate that expenditures were matched to obligations with an appropriate period of availability.

We recommended that the PSC work with the HHS Office of the Secretary to report Antideficiency Act obligation violations totaling $20.3 million and Antideficiency Act expenditure violations totaling $29.2 million. We also recommended that the PSC make procedural changes that should help prevent violations of the Antideficiency Act and the Federal Acquisition Regulation in the future. The PSC agreed with our findings and generally agreed with our recommendations.