Finding No. 2022-012
Area: Procurement, Suspension and Debarment
Views of Auditee and Planned Corrective Action
Condition 1.
2 (or 3%) transactions totaling $26 identified as doc nos. 333590 and 28221 pertained to small purchases not exceeding $500 and for which no price quotations were made....
Finding No. 2022-012
Area: Procurement, Suspension and Debarment
Views of Auditee and Planned Corrective Action
Condition 1.
2 (or 3%) transactions totaling $26 identified as doc nos. 333590 and 28221 pertained to small purchases not exceeding $500 and for which no price quotations were made. No evidence was provided showing that a written determination of the reasonableness of price was performed.
We disagree.
Based on existing Public School System Procurement Rules and Regulations, the Public School System through the Finance department strongly maintains that the Commissioner of Education, being the chief state school superintendent and the Chief of Procurement and Supply, are vested with the determination authority in all Procurement and Supply matters, among others.
Such affirmation is further articulated in the Public School System's October 30, 2023 letter to Ernst & Young, LLP Executive Director James N. Whitt, that, among others and in particular, as cited in Part T60-40-210(b) 2:
“Expertise and Authority of the Chief: The Chief of Procurement and Supply possesses specific and comprehensive experience in the procurement of goods. We argue that their signature is not merely an administrative formality but a professional endorsement of the price’s reasonableness. “
Condition 2.
2 (or 3%) transactions totaling $739 identified as Doc Nos 332318 and 332718 pertained to small purchases not exceeding $10,000 and for which no price quotations were obtained.
We disagree.
Price quotations for Document Nos 332318 and 332718 were provided to the Ernst & Young audit team.
Condition 3.
1 (or 2%) transaction amounting to $575 identified as Doc. No. 27345 pertained to a small purchase not exceeding $10,000 and for which only 2 price quotations were obtained, instead of the 3 quotations required by § T60-40-210(d).
We disagree.
Doc No. 27345 price quotations were provided to the Ernst & Young audit team.
Condition 4.
43 (or 72%) transactions totaling $245,856 were procured through competitive sealed proposals. No evidence was provided showing that the Commissioner of Education has determined in writing that the procurement satisfies the condition for use of competitive sealed proposals in accordance with § T60-40-225(a).
We disagree.
Based on existing Public School System Procurement Rules and Regulations, the Public School System through the Finance department strongly maintains that the Commissioner of Education, being the chief state school superintendent and the Chief of Procurement and Supply, are vested with the determination authority in all Procurement and Supply matters, among others.
Such affirmation is further articulated in the Public School System's October 30, 2023 letter to Ernst & Young, LLP Executive Director James N. Whitt, that, among others and in particular, as cited in the following under:
Part T60-40-225(a):
Interpreting Rule Language: The rule explicitly requires the Commissioner of Education to determine "in writing" upon the advice of legal counsel when the use of competitive sealed bidding is not practical or advantageous. However, it doesn't prescribe a specific form or extent of justification needed.
Commissioner's Signature as Written Determination: We believe that the Commissioner's signature on a cover letter stating that competitive sealed proposals will be used fulfills the "in writing" requirement. The signature, in this context, serves
as an acknowledgment that the Commissioner has considered the matter and found it advantageous to PSS.
Subjectivity of 'Advantageous': The rule leaves room for interpretation by using the term "advantageous," which is inherently subjective. Since it does not stipulate the need for detailed justification, the Commissioner’s decision that the method is advantageous should suffice.
Legal Counsel's Role: The regulation specifies that the determination should be made "upon the advice of legal counsel." It can be inferred that this due process has been followed if the Commissioner signs a letter or document related to competitive sealed proposals, thereby adding another layer of checks and balances.
Presumption of Expertise: As the Commissioner of Education, it is presumed that the individual is capable of making informed decisions that are in the best interest of PSS. Their signature, therefore, carries the weight of their expertise and authority.
Anticipated Completion Date:
N/A
Name of Contact Person and Title
Contact Person – Arlene Lizama, Director of Finance
Contact – arlene.lizama@cnmipss.org