Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering, Office of Cyber Infrastructure & Integrative Activities AL No.: 47.050, 47.070, 47.079, 47.080 & 47.083 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019-05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), EAR-2028793 (05/15/2020 – 04/30/2021), OAC- 1931278 (10/1/2019 – 09/30/2022), OAC-1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OISE-1855654 (05/15/2019 – 12/31/2023), OAC-1664061 (10/01/17 – 09/30/2022) & OIA-1937099 (09/01/2020 – 08/31/2021) Pass Through Entity: Utah State University & University of Cincinnati MW2021-007 PROCUREMENT, SUSPENSION AND DEBARMENT Material Weakness Criteria The requirements for this compliance requirement are contained in 2 CFR sections 200.317- 200.326; 48 CFR parts 03, 15, 44, and the clauses at 48 CRF sections 52.244-2, 52.244-5, 52.203-13, 52.203-16 and 52.215-12; agency FAR supplements; 2 CFR part 180; OMB M-18- 18; and the terms and conditions of the federal award. There is a requirement to verify that contractors in covered transactions or any of its vendors are not federally debarred, suspended, or excluded. A covered transaction is a nonprocurement or procurement transaction in excess of $25,000 that is subject to the prohibitions noted in 2 CFR part 180. The covered transaction may be at the primary tier, between a federal agency and a person or a lower tier between a participant in a covered transaction and another person. Condition During the completion of the audit, the auditor noted that CUAHSI failed to maintain and provide the proper records and support to document their review of vendor files for covered transactions. Such failure led to non-compliance with the procurement, suspension and debarment policies in accordance with the UG for the year ended December 31, 2021. CUAHSI did not complete the verification of its 2021 vendors until 2024. Based on our testing, no contractors in covered transactions were deemed to be federally debarred, suspended or excluded. Material Weakness Cause & Context CUAHSI has a policy in place to meet the procurement requirements but there was no evidence of compliance with that policy. Effect As a result of noncompliance, there could be possible repayment of funds, loss of reputation and possible suspension or debarment. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2020-007. Recommendation It is recommended that CUAHSI strive to prioritize compliance. CUAHSI should ensure that, to the extent practicable, the use of a competitive procurement process in compliance with 2 CFR section 200/317. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering, Office of Cyber Infrastructure & Integrative Activities AL No.: 47.050, 47.070, 47.079, 47.080 & 47.083 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019-05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), EAR-2028793 (05/15/2020 – 04/30/2021), OAC- 1931278 (10/1/2019 – 09/30/2022), OAC-1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OISE-1855654 (05/15/2019 – 12/31/2023), OAC-1664061 (10/01/17 – 09/30/2022) & OIA-1937099 (09/01/2020 – 08/31/2021) Pass Through Entity: Utah State University & University of Cincinnati MW2021-007 PROCUREMENT, SUSPENSION AND DEBARMENT Material Weakness Criteria The requirements for this compliance requirement are contained in 2 CFR sections 200.317- 200.326; 48 CFR parts 03, 15, 44, and the clauses at 48 CRF sections 52.244-2, 52.244-5, 52.203-13, 52.203-16 and 52.215-12; agency FAR supplements; 2 CFR part 180; OMB M-18- 18; and the terms and conditions of the federal award. There is a requirement to verify that contractors in covered transactions or any of its vendors are not federally debarred, suspended, or excluded. A covered transaction is a nonprocurement or procurement transaction in excess of $25,000 that is subject to the prohibitions noted in 2 CFR part 180. The covered transaction may be at the primary tier, between a federal agency and a person or a lower tier between a participant in a covered transaction and another person. Condition During the completion of the audit, the auditor noted that CUAHSI failed to maintain and provide the proper records and support to document their review of vendor files for covered transactions. Such failure led to non-compliance with the procurement, suspension and debarment policies in accordance with the UG for the year ended December 31, 2021. CUAHSI did not complete the verification of its 2021 vendors until 2024. Based on our testing, no contractors in covered transactions were deemed to be federally debarred, suspended or excluded. Material Weakness Cause & Context CUAHSI has a policy in place to meet the procurement requirements but there was no evidence of compliance with that policy. Effect As a result of noncompliance, there could be possible repayment of funds, loss of reputation and possible suspension or debarment. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2020-007. Recommendation It is recommended that CUAHSI strive to prioritize compliance. CUAHSI should ensure that, to the extent practicable, the use of a competitive procurement process in compliance with 2 CFR section 200/317. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering, Office of Cyber Infrastructure & Integrative Activities AL No.: 47.050, 47.070, 47.079, 47.080 & 47.083 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019-05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), EAR-2028793 (05/15/2020 – 04/30/2021), OAC- 1931278 (10/1/2019 – 09/30/2022), OAC-1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OISE-1855654 (05/15/2019 – 12/31/2023), OAC-1664061 (10/01/17 – 09/30/2022) & OIA-1937099 (09/01/2020 – 08/31/2021) Pass Through Entity: Utah State University & University of Cincinnati MW2021-007 PROCUREMENT, SUSPENSION AND DEBARMENT Material Weakness Criteria The requirements for this compliance requirement are contained in 2 CFR sections 200.317- 200.326; 48 CFR parts 03, 15, 44, and the clauses at 48 CRF sections 52.244-2, 52.244-5, 52.203-13, 52.203-16 and 52.215-12; agency FAR supplements; 2 CFR part 180; OMB M-18- 18; and the terms and conditions of the federal award. There is a requirement to verify that contractors in covered transactions or any of its vendors are not federally debarred, suspended, or excluded. A covered transaction is a nonprocurement or procurement transaction in excess of $25,000 that is subject to the prohibitions noted in 2 CFR part 180. The covered transaction may be at the primary tier, between a federal agency and a person or a lower tier between a participant in a covered transaction and another person. Condition During the completion of the audit, the auditor noted that CUAHSI failed to maintain and provide the proper records and support to document their review of vendor files for covered transactions. Such failure led to non-compliance with the procurement, suspension and debarment policies in accordance with the UG for the year ended December 31, 2021. CUAHSI did not complete the verification of its 2021 vendors until 2024. Based on our testing, no contractors in covered transactions were deemed to be federally debarred, suspended or excluded. Material Weakness Cause & Context CUAHSI has a policy in place to meet the procurement requirements but there was no evidence of compliance with that policy. Effect As a result of noncompliance, there could be possible repayment of funds, loss of reputation and possible suspension or debarment. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2020-007. Recommendation It is recommended that CUAHSI strive to prioritize compliance. CUAHSI should ensure that, to the extent practicable, the use of a competitive procurement process in compliance with 2 CFR section 200/317. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering, Office of Cyber Infrastructure & Integrative Activities AL No.: 47.050, 47.070, 47.079, 47.080 & 47.083 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019-05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), EAR-2028793 (05/15/2020 – 04/30/2021), OAC- 1931278 (10/1/2019 – 09/30/2022), OAC-1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OISE-1855654 (05/15/2019 – 12/31/2023), OAC-1664061 (10/01/17 – 09/30/2022) & OIA-1937099 (09/01/2020 – 08/31/2021) Pass Through Entity: Utah State University & University of Cincinnati MW2021-007 PROCUREMENT, SUSPENSION AND DEBARMENT Material Weakness Criteria The requirements for this compliance requirement are contained in 2 CFR sections 200.317- 200.326; 48 CFR parts 03, 15, 44, and the clauses at 48 CRF sections 52.244-2, 52.244-5, 52.203-13, 52.203-16 and 52.215-12; agency FAR supplements; 2 CFR part 180; OMB M-18- 18; and the terms and conditions of the federal award. There is a requirement to verify that contractors in covered transactions or any of its vendors are not federally debarred, suspended, or excluded. A covered transaction is a nonprocurement or procurement transaction in excess of $25,000 that is subject to the prohibitions noted in 2 CFR part 180. The covered transaction may be at the primary tier, between a federal agency and a person or a lower tier between a participant in a covered transaction and another person. Condition During the completion of the audit, the auditor noted that CUAHSI failed to maintain and provide the proper records and support to document their review of vendor files for covered transactions. Such failure led to non-compliance with the procurement, suspension and debarment policies in accordance with the UG for the year ended December 31, 2021. CUAHSI did not complete the verification of its 2021 vendors until 2024. Based on our testing, no contractors in covered transactions were deemed to be federally debarred, suspended or excluded. Material Weakness Cause & Context CUAHSI has a policy in place to meet the procurement requirements but there was no evidence of compliance with that policy. Effect As a result of noncompliance, there could be possible repayment of funds, loss of reputation and possible suspension or debarment. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2020-007. Recommendation It is recommended that CUAHSI strive to prioritize compliance. CUAHSI should ensure that, to the extent practicable, the use of a competitive procurement process in compliance with 2 CFR section 200/317. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering, Office of Cyber Infrastructure & Integrative Activities AL No.: 47.050, 47.070, 47.079, 47.080 & 47.083 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019-05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), EAR-2028793 (05/15/2020 – 04/30/2021), OAC- 1931278 (10/1/2019 – 09/30/2022), OAC-1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OISE-1855654 (05/15/2019 – 12/31/2023), OAC-1664061 (10/01/17 – 09/30/2022) & OIA-1937099 (09/01/2020 – 08/31/2021) Pass Through Entity: Utah State University & University of Cincinnati MW2021-007 PROCUREMENT, SUSPENSION AND DEBARMENT Material Weakness Criteria The requirements for this compliance requirement are contained in 2 CFR sections 200.317- 200.326; 48 CFR parts 03, 15, 44, and the clauses at 48 CRF sections 52.244-2, 52.244-5, 52.203-13, 52.203-16 and 52.215-12; agency FAR supplements; 2 CFR part 180; OMB M-18- 18; and the terms and conditions of the federal award. There is a requirement to verify that contractors in covered transactions or any of its vendors are not federally debarred, suspended, or excluded. A covered transaction is a nonprocurement or procurement transaction in excess of $25,000 that is subject to the prohibitions noted in 2 CFR part 180. The covered transaction may be at the primary tier, between a federal agency and a person or a lower tier between a participant in a covered transaction and another person. Condition During the completion of the audit, the auditor noted that CUAHSI failed to maintain and provide the proper records and support to document their review of vendor files for covered transactions. Such failure led to non-compliance with the procurement, suspension and debarment policies in accordance with the UG for the year ended December 31, 2021. CUAHSI did not complete the verification of its 2021 vendors until 2024. Based on our testing, no contractors in covered transactions were deemed to be federally debarred, suspended or excluded. Material Weakness Cause & Context CUAHSI has a policy in place to meet the procurement requirements but there was no evidence of compliance with that policy. Effect As a result of noncompliance, there could be possible repayment of funds, loss of reputation and possible suspension or debarment. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2020-007. Recommendation It is recommended that CUAHSI strive to prioritize compliance. CUAHSI should ensure that, to the extent practicable, the use of a competitive procurement process in compliance with 2 CFR section 200/317. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
2021-005 Criteria: 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. Condition: The Department was able to provide a procurement policy, but it was dated in 2003 and not updated for the latest federal guidelines noted in the criteria paragraph. Cause: The Department does not have internal controls in place surrounding procurement policies and procedures. Effect: The lack of internal controls surrounding the procurement policies and procedures could lead to potential funding issues in the future. Questioned Costs: None. Recommendation: We recommend that management continue to implement additional control processes in order to ensure proper controls are in place and followed. Tribal Response: Management agrees with this finding.
2021-005 Criteria: 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. Condition: The Department was able to provide a procurement policy, but it was dated in 2003 and not updated for the latest federal guidelines noted in the criteria paragraph. Cause: The Department does not have internal controls in place surrounding procurement policies and procedures. Effect: The lack of internal controls surrounding the procurement policies and procedures could lead to potential funding issues in the future. Questioned Costs: None. Recommendation: We recommend that management continue to implement additional control processes in order to ensure proper controls are in place and followed. Tribal Response: Management agrees with this finding.
Finding No. 2021-013 Federal Agency: U.S. Department of Agriculture AL Program: 10.539 CNMI Nutrition Assistance Federal Award No.: 7NM4004NM Area: Procurement and Suspension and Debarment Questioned Costs: $97,850 Criteria: 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. CNMI’s procurement regulations state the following: • All government procurement shall be awarded by competitive sealed bidding except under certain circumstances permitting other than full and open competition. • Bidding is not required but is encouraged for procurement of $2,500 and under $10,000. The individual with the expenditure authority must obtain price quotations from at least three vendors and should base the selection on competitive price and quality for procurement valued at $2,500 to $10,000. Any price quotations must be written, documented, and submitted to the Procurement and Supply (P&S) Director for approval. • For purchases that exceed $10,000 but which are less than or equal to $50,000, a minimum of three vendors shall be solicited to submit written or electronic quotations. If there are fewer than three vendors, the expenditure authority shall certify, in writing, to the P&S Director that fewer than three vendors responded and shall provide written proof of the request. • Based on Procurement Regulation 70-30.3-115(a), Contract Review, Processing, and Oversight, all contracts must first be prepared by the official with expenditure authority who shall certify that he has complied with the procurement regulations codified in this subchapter, and that the proposed contract is for a public purpose that does not constitute a waste or abuse of public funds. All contract documents are to be complete, including attachments and exhibits, if they are incorporated into the contract by reference. Condition: Of fifty nonpayroll expenditures tested, aggregating $401,852 of a total population of $756,436 in nonpayroll expenditures subject to procurement, the following were noted: 1. For one (or 2%), the bid summary was not on file (document no. 1624129, dated 02/24/21, amounting to $35,990). Therefore, the CNMI was not able to substantiate the number of bids received and whether the procurement process for competitive sealed bids were properly followed, for which the amount is questioned. Finding No. 2021-013, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.539 CNMI Nutrition Assistance Federal Award No.: 7NM4004NM Area: Procurement and Suspension and Debarment Questioned Costs: $97,850 Condition, continued: 2. For one (or 2%), the Bid Opening Summary report was not provided (document no. 1562306, dated 10/09/2020, amounting to $33,060) and no other documentations on file to substantiate that the selection was based on the lowest bidder. 3. For two (or 4%), expenditures were procured through sole source procurement methods. The written justification states that the CNMI NAP obtained quotations from two vendors. However, no documentation was provided to demonstrate efforts were made to contact and solicit from other vendors. Cause: CNMI did not enforce compliance with established regulations over procurement. Effect: CNMI is in noncompliance with applicable procurement regulations and questioned costs of $97,850 result. Identification as a Repeat Finding: Finding No. 2020-026 Finding No. 2021-013, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.539 CNMI Nutrition Assistance Federal Award No.: 7NM4004NM Area: Procurement and Suspension and Debarment Questioned Costs: $97,850 Recommendation: Responsible personnel should monitor and enforce compliance with applicable procurement requirements, including the review of procurement files for completeness as to written rationale for deviations from applicable procurement requirements. Further, responsible personnel should establish a recordkeeping system whereby underlying support is filed accordingly to substantiate compliance. Views of responsible officials: Condition 1 – The CNMI-NAP disagrees with the finding. This transaction was supposed to be processed in FY 2020 but because of the delay and completion date was done in FY 2021, a Change Order Contract No. 01 was processed, and the funds was carried over to FY 2021. The bid summary was not necessary because a change order was processed changing the account from A0551E to A1551L per NAP email dated 1/11/21 (Pending Change Order Contract) - CNC 01/13/21 Change Order #1 to charge $35,989.60 (Contract #707410-OC) to A1551L.64560 to extend the delivery period from thirty (30) days to ninety (90) days. Condition 2 – CNMI NAP disagrees with the finding. The Nutrition Assistance Program did follow the proper procurement method by processing Invitation to Bid and obtained the lowest bidder and processed the contract with a notice to proceed. Condition 3 – CNMI NAP disagrees with this finding. The CNMI NAP tried to obtain quotations to purchase perforator machines on island and there was none. However, the selected vendor submitted their price quotation stating that they are able to obtain the perforator machines from off-island and CNMI NAP can purchase from them. Finding No. 2021-013, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.539 CNMI Nutrition Assistance Federal Award No.: 7NM4004NM Area: Procurement and Suspension and Debarment Questioned Costs: $97,850 Auditor Response: Condition 1 – Although there was a change order from the original contract, all procurement records shall be retained for a period of five years after the completion of construction or full delivery of goods or services under a contract as per Section 70-30.3-285 of the Procurement Regulations. Condition 2 – Documentation substantiating that the selection was based on the lowest bidder was not provided. Condition 3 – Documentation demonstrating efforts were made to contact and solicit from other vendors was not provided.
Finding No. 2021-013 Federal Agency: U.S. Department of Agriculture AL Program: 10.539 CNMI Nutrition Assistance Federal Award No.: 7NM4004NM Area: Procurement and Suspension and Debarment Questioned Costs: $97,850 Criteria: 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. CNMI’s procurement regulations state the following: • All government procurement shall be awarded by competitive sealed bidding except under certain circumstances permitting other than full and open competition. • Bidding is not required but is encouraged for procurement of $2,500 and under $10,000. The individual with the expenditure authority must obtain price quotations from at least three vendors and should base the selection on competitive price and quality for procurement valued at $2,500 to $10,000. Any price quotations must be written, documented, and submitted to the Procurement and Supply (P&S) Director for approval. • For purchases that exceed $10,000 but which are less than or equal to $50,000, a minimum of three vendors shall be solicited to submit written or electronic quotations. If there are fewer than three vendors, the expenditure authority shall certify, in writing, to the P&S Director that fewer than three vendors responded and shall provide written proof of the request. • Based on Procurement Regulation 70-30.3-115(a), Contract Review, Processing, and Oversight, all contracts must first be prepared by the official with expenditure authority who shall certify that he has complied with the procurement regulations codified in this subchapter, and that the proposed contract is for a public purpose that does not constitute a waste or abuse of public funds. All contract documents are to be complete, including attachments and exhibits, if they are incorporated into the contract by reference. Condition: Of fifty nonpayroll expenditures tested, aggregating $401,852 of a total population of $756,436 in nonpayroll expenditures subject to procurement, the following were noted: 1. For one (or 2%), the bid summary was not on file (document no. 1624129, dated 02/24/21, amounting to $35,990). Therefore, the CNMI was not able to substantiate the number of bids received and whether the procurement process for competitive sealed bids were properly followed, for which the amount is questioned. Finding No. 2021-013, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.539 CNMI Nutrition Assistance Federal Award No.: 7NM4004NM Area: Procurement and Suspension and Debarment Questioned Costs: $97,850 Condition, continued: 2. For one (or 2%), the Bid Opening Summary report was not provided (document no. 1562306, dated 10/09/2020, amounting to $33,060) and no other documentations on file to substantiate that the selection was based on the lowest bidder. 3. For two (or 4%), expenditures were procured through sole source procurement methods. The written justification states that the CNMI NAP obtained quotations from two vendors. However, no documentation was provided to demonstrate efforts were made to contact and solicit from other vendors. Cause: CNMI did not enforce compliance with established regulations over procurement. Effect: CNMI is in noncompliance with applicable procurement regulations and questioned costs of $97,850 result. Identification as a Repeat Finding: Finding No. 2020-026 Finding No. 2021-013, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.539 CNMI Nutrition Assistance Federal Award No.: 7NM4004NM Area: Procurement and Suspension and Debarment Questioned Costs: $97,850 Recommendation: Responsible personnel should monitor and enforce compliance with applicable procurement requirements, including the review of procurement files for completeness as to written rationale for deviations from applicable procurement requirements. Further, responsible personnel should establish a recordkeeping system whereby underlying support is filed accordingly to substantiate compliance. Views of responsible officials: Condition 1 – The CNMI-NAP disagrees with the finding. This transaction was supposed to be processed in FY 2020 but because of the delay and completion date was done in FY 2021, a Change Order Contract No. 01 was processed, and the funds was carried over to FY 2021. The bid summary was not necessary because a change order was processed changing the account from A0551E to A1551L per NAP email dated 1/11/21 (Pending Change Order Contract) - CNC 01/13/21 Change Order #1 to charge $35,989.60 (Contract #707410-OC) to A1551L.64560 to extend the delivery period from thirty (30) days to ninety (90) days. Condition 2 – CNMI NAP disagrees with the finding. The Nutrition Assistance Program did follow the proper procurement method by processing Invitation to Bid and obtained the lowest bidder and processed the contract with a notice to proceed. Condition 3 – CNMI NAP disagrees with this finding. The CNMI NAP tried to obtain quotations to purchase perforator machines on island and there was none. However, the selected vendor submitted their price quotation stating that they are able to obtain the perforator machines from off-island and CNMI NAP can purchase from them. Finding No. 2021-013, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.539 CNMI Nutrition Assistance Federal Award No.: 7NM4004NM Area: Procurement and Suspension and Debarment Questioned Costs: $97,850 Auditor Response: Condition 1 – Although there was a change order from the original contract, all procurement records shall be retained for a period of five years after the completion of construction or full delivery of goods or services under a contract as per Section 70-30.3-285 of the Procurement Regulations. Condition 2 – Documentation substantiating that the selection was based on the lowest bidder was not provided. Condition 3 – Documentation demonstrating efforts were made to contact and solicit from other vendors was not provided.
Finding No. 2021-020 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Criteria: 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. CNMI’s procurement regulations state the following: Retention of Procurement Records: (a) All procurement records shall be retained by the Procurement and Supply (P&S) Director for a period of 5 years after completion of construction, or full delivery of the goods or services under the contract. The official with expenditure authority shall also keep copies of all procurement records for their respective agencies. Requirements for Competition: Officials with expenditure authority shall provide for full and open competition through use of the competitive procedure that is best suited to the circumstances of the contract action. The competitive procedures available for use in fulfilling the requirement for full and open competition are as follows: (a) Competitive sealed bidding (§ 70-30.3-205) (b) Competitive sealed proposals (§ 70-30.3-210) (c) Architect-engineer services (§ 70-30.3-305); and (d) Competitive selection procedures for professional services (§ 70-30.3-310). § 70-30.3-201 Competitive sealed bidding: If there is no adequate local competition, the invitation for bids shall also be advertised in at least one regional newspaper or at least one national publication or on the internet; in such case, the P&S Director shall consider extending the bidding period. Small Purchases: Bidding is not required but is encouraged for procurement over $2,500 and under $10,000. The official with expenditure authority must obtain price quotations from at least three vendors and base the selection on competitive price and quality for procurement valued at $2,500 to $10,000. Any price quotations obtained must be written, documented, and submitted to the P&S Director for approval. Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Condition: Of forty-five expenditures tested, aggregating $4.5M of a total population of $6.4M in nonpayroll expenditures subject to procurement, the following were noted: 1. For two (or 4%), purchase order, purchase requisitions and contracts were not on file. 2. For five (or 11%), bid submissions and invitation-to-bid publications were not on file. No questioned costs are presented for Business Unit 5122 as no reimbursement were received in FY 2021. 3. For two (or 4%), no price quotations were written, documented, or submitted with the purchase order. Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Condition, continued: 4. For two or (4%), written justifications and the P&S Director’s written approvals of the emergency procurement method used were not provided. In addition, the contracts indicated the procurement used were for competitive sealed proposals; however, the procurement files support emergency procurement. Cause: CNMI did not enforce compliance with established procurement regulations over procurement. Effect: CNMI is in noncompliance with applicable procurement regulations and questioned costs of $1,240,465 result. Identification as a Repeat Finding: Finding No. 2020-032 Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Views of responsible officials: Condition 1 – CNMI Corrective Action Plan statements agreement. Condition 2 - The CIP Office disagrees with this finding. The Capital Improvement Program provided information regarding these questioned costs. For 703-OS/32200344 - RFQ20-GOV-084 was provided to the Auditor for their review. Three (3) proposers submitted a proposal. For 702-OS/32200912 - The procurement method for this was processed through a Sole Source. For CUC-WW-18-C032 - Lower Base Sewer Phase 1 - Lift Station and Focemain - This contract was executed by the Commonwealth Utilities Corporation on July 12, 2018. Procurement Services was able to obtain a copy of the contract from CUC to satisfy the audit testing. For 712727-OC (ITB20-DLNR/DOA-098) - Purchase of One (1) 13" Chipper Machine. Two bidders responded to this ITB; Boyer Trading Company & J. & J Company. Boyer Trading was selected as the lowest and responsive bidder. Condition 3 - The Office of Grants Management disagrees with these findings because these are Open Accounts, and this would mean that no price quotations were required during the purchase requisition process in order to obtain the purchase orders. As confirmed by Financial Services and Procurement Services, quotations were not required on an open account. Open accounts were allowed during the JD Edwards period and were discontinued after September 30, 2021. MUNIS was implemented in October 2021. Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Views of responsible officials, continued: Condition 4 - The Office of Grants Management (assisting DHSEM) disagrees with the finding because assigned personnel were not made aware of the documents needed; however, OGM is more than happy to provide the following documents to substantiate the purchase of a mobile Covid-19 Biological Safety Lab for the Commonwealth Healthcare Center and for the Alternate Care Site at Kanoa Resort. Per the documentation, the Public Assistance Office and DHSEM followed competitive procurement processing and invoked the Public Health Emergency Executive Order#2020-04 and to which the CNMI Attorney General’s Office approved the purchase. Purchase Order # 708019 was used by the Department of Homeland Security and Emergency Management and the Covid-19 Task Force. Contract number Covid19-0-0626 was provided. Expenses were later transferred to Department of the Interior CARES Act Funds under D20AP00049 per OGM Memo Number 2021-013. Auditor Response: Condition 2 – The bid documents, bid submissions and advertisements were not provided. Condition 3 – Per §70-30.3-220 of the CNMI Procurement Regulations that was in effect prior to May 28, 2021, the official with expenditure authority must obtain price quotations from at least three vendors and base the selection on competitive price and quality at $2,500 to $10,000. Any price quotations obtained must be written, documented, and submitted to the P&S Director for approval. Condition 4 – The supporting documents were requested on January 25, 2024 and were not provided.
Finding No. 2021-020 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Criteria: 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. CNMI’s procurement regulations state the following: Retention of Procurement Records: (a) All procurement records shall be retained by the Procurement and Supply (P&S) Director for a period of 5 years after completion of construction, or full delivery of the goods or services under the contract. The official with expenditure authority shall also keep copies of all procurement records for their respective agencies. Requirements for Competition: Officials with expenditure authority shall provide for full and open competition through use of the competitive procedure that is best suited to the circumstances of the contract action. The competitive procedures available for use in fulfilling the requirement for full and open competition are as follows: (a) Competitive sealed bidding (§ 70-30.3-205) (b) Competitive sealed proposals (§ 70-30.3-210) (c) Architect-engineer services (§ 70-30.3-305); and (d) Competitive selection procedures for professional services (§ 70-30.3-310). § 70-30.3-201 Competitive sealed bidding: If there is no adequate local competition, the invitation for bids shall also be advertised in at least one regional newspaper or at least one national publication or on the internet; in such case, the P&S Director shall consider extending the bidding period. Small Purchases: Bidding is not required but is encouraged for procurement over $2,500 and under $10,000. The official with expenditure authority must obtain price quotations from at least three vendors and base the selection on competitive price and quality for procurement valued at $2,500 to $10,000. Any price quotations obtained must be written, documented, and submitted to the P&S Director for approval. Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Condition: Of forty-five expenditures tested, aggregating $4.5M of a total population of $6.4M in nonpayroll expenditures subject to procurement, the following were noted: 1. For two (or 4%), purchase order, purchase requisitions and contracts were not on file. 2. For five (or 11%), bid submissions and invitation-to-bid publications were not on file. No questioned costs are presented for Business Unit 5122 as no reimbursement were received in FY 2021. 3. For two (or 4%), no price quotations were written, documented, or submitted with the purchase order. Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Condition, continued: 4. For two or (4%), written justifications and the P&S Director’s written approvals of the emergency procurement method used were not provided. In addition, the contracts indicated the procurement used were for competitive sealed proposals; however, the procurement files support emergency procurement. Cause: CNMI did not enforce compliance with established procurement regulations over procurement. Effect: CNMI is in noncompliance with applicable procurement regulations and questioned costs of $1,240,465 result. Identification as a Repeat Finding: Finding No. 2020-032 Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Views of responsible officials: Condition 1 – CNMI Corrective Action Plan statements agreement. Condition 2 - The CIP Office disagrees with this finding. The Capital Improvement Program provided information regarding these questioned costs. For 703-OS/32200344 - RFQ20-GOV-084 was provided to the Auditor for their review. Three (3) proposers submitted a proposal. For 702-OS/32200912 - The procurement method for this was processed through a Sole Source. For CUC-WW-18-C032 - Lower Base Sewer Phase 1 - Lift Station and Focemain - This contract was executed by the Commonwealth Utilities Corporation on July 12, 2018. Procurement Services was able to obtain a copy of the contract from CUC to satisfy the audit testing. For 712727-OC (ITB20-DLNR/DOA-098) - Purchase of One (1) 13" Chipper Machine. Two bidders responded to this ITB; Boyer Trading Company & J. & J Company. Boyer Trading was selected as the lowest and responsive bidder. Condition 3 - The Office of Grants Management disagrees with these findings because these are Open Accounts, and this would mean that no price quotations were required during the purchase requisition process in order to obtain the purchase orders. As confirmed by Financial Services and Procurement Services, quotations were not required on an open account. Open accounts were allowed during the JD Edwards period and were discontinued after September 30, 2021. MUNIS was implemented in October 2021. Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Views of responsible officials, continued: Condition 4 - The Office of Grants Management (assisting DHSEM) disagrees with the finding because assigned personnel were not made aware of the documents needed; however, OGM is more than happy to provide the following documents to substantiate the purchase of a mobile Covid-19 Biological Safety Lab for the Commonwealth Healthcare Center and for the Alternate Care Site at Kanoa Resort. Per the documentation, the Public Assistance Office and DHSEM followed competitive procurement processing and invoked the Public Health Emergency Executive Order#2020-04 and to which the CNMI Attorney General’s Office approved the purchase. Purchase Order # 708019 was used by the Department of Homeland Security and Emergency Management and the Covid-19 Task Force. Contract number Covid19-0-0626 was provided. Expenses were later transferred to Department of the Interior CARES Act Funds under D20AP00049 per OGM Memo Number 2021-013. Auditor Response: Condition 2 – The bid documents, bid submissions and advertisements were not provided. Condition 3 – Per §70-30.3-220 of the CNMI Procurement Regulations that was in effect prior to May 28, 2021, the official with expenditure authority must obtain price quotations from at least three vendors and base the selection on competitive price and quality at $2,500 to $10,000. Any price quotations obtained must be written, documented, and submitted to the P&S Director for approval. Condition 4 – The supporting documents were requested on January 25, 2024 and were not provided.
Finding No. 2021-020 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Criteria: 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. CNMI’s procurement regulations state the following: Retention of Procurement Records: (a) All procurement records shall be retained by the Procurement and Supply (P&S) Director for a period of 5 years after completion of construction, or full delivery of the goods or services under the contract. The official with expenditure authority shall also keep copies of all procurement records for their respective agencies. Requirements for Competition: Officials with expenditure authority shall provide for full and open competition through use of the competitive procedure that is best suited to the circumstances of the contract action. The competitive procedures available for use in fulfilling the requirement for full and open competition are as follows: (a) Competitive sealed bidding (§ 70-30.3-205) (b) Competitive sealed proposals (§ 70-30.3-210) (c) Architect-engineer services (§ 70-30.3-305); and (d) Competitive selection procedures for professional services (§ 70-30.3-310). § 70-30.3-201 Competitive sealed bidding: If there is no adequate local competition, the invitation for bids shall also be advertised in at least one regional newspaper or at least one national publication or on the internet; in such case, the P&S Director shall consider extending the bidding period. Small Purchases: Bidding is not required but is encouraged for procurement over $2,500 and under $10,000. The official with expenditure authority must obtain price quotations from at least three vendors and base the selection on competitive price and quality for procurement valued at $2,500 to $10,000. Any price quotations obtained must be written, documented, and submitted to the P&S Director for approval. Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Condition: Of forty-five expenditures tested, aggregating $4.5M of a total population of $6.4M in nonpayroll expenditures subject to procurement, the following were noted: 1. For two (or 4%), purchase order, purchase requisitions and contracts were not on file. 2. For five (or 11%), bid submissions and invitation-to-bid publications were not on file. No questioned costs are presented for Business Unit 5122 as no reimbursement were received in FY 2021. 3. For two (or 4%), no price quotations were written, documented, or submitted with the purchase order. Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Condition, continued: 4. For two or (4%), written justifications and the P&S Director’s written approvals of the emergency procurement method used were not provided. In addition, the contracts indicated the procurement used were for competitive sealed proposals; however, the procurement files support emergency procurement. Cause: CNMI did not enforce compliance with established procurement regulations over procurement. Effect: CNMI is in noncompliance with applicable procurement regulations and questioned costs of $1,240,465 result. Identification as a Repeat Finding: Finding No. 2020-032 Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Views of responsible officials: Condition 1 – CNMI Corrective Action Plan statements agreement. Condition 2 - The CIP Office disagrees with this finding. The Capital Improvement Program provided information regarding these questioned costs. For 703-OS/32200344 - RFQ20-GOV-084 was provided to the Auditor for their review. Three (3) proposers submitted a proposal. For 702-OS/32200912 - The procurement method for this was processed through a Sole Source. For CUC-WW-18-C032 - Lower Base Sewer Phase 1 - Lift Station and Focemain - This contract was executed by the Commonwealth Utilities Corporation on July 12, 2018. Procurement Services was able to obtain a copy of the contract from CUC to satisfy the audit testing. For 712727-OC (ITB20-DLNR/DOA-098) - Purchase of One (1) 13" Chipper Machine. Two bidders responded to this ITB; Boyer Trading Company & J. & J Company. Boyer Trading was selected as the lowest and responsive bidder. Condition 3 - The Office of Grants Management disagrees with these findings because these are Open Accounts, and this would mean that no price quotations were required during the purchase requisition process in order to obtain the purchase orders. As confirmed by Financial Services and Procurement Services, quotations were not required on an open account. Open accounts were allowed during the JD Edwards period and were discontinued after September 30, 2021. MUNIS was implemented in October 2021. Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Views of responsible officials, continued: Condition 4 - The Office of Grants Management (assisting DHSEM) disagrees with the finding because assigned personnel were not made aware of the documents needed; however, OGM is more than happy to provide the following documents to substantiate the purchase of a mobile Covid-19 Biological Safety Lab for the Commonwealth Healthcare Center and for the Alternate Care Site at Kanoa Resort. Per the documentation, the Public Assistance Office and DHSEM followed competitive procurement processing and invoked the Public Health Emergency Executive Order#2020-04 and to which the CNMI Attorney General’s Office approved the purchase. Purchase Order # 708019 was used by the Department of Homeland Security and Emergency Management and the Covid-19 Task Force. Contract number Covid19-0-0626 was provided. Expenses were later transferred to Department of the Interior CARES Act Funds under D20AP00049 per OGM Memo Number 2021-013. Auditor Response: Condition 2 – The bid documents, bid submissions and advertisements were not provided. Condition 3 – Per §70-30.3-220 of the CNMI Procurement Regulations that was in effect prior to May 28, 2021, the official with expenditure authority must obtain price quotations from at least three vendors and base the selection on competitive price and quality at $2,500 to $10,000. Any price quotations obtained must be written, documented, and submitted to the P&S Director for approval. Condition 4 – The supporting documents were requested on January 25, 2024 and were not provided.
Finding No. 2021-020 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Criteria: 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. CNMI’s procurement regulations state the following: Retention of Procurement Records: (a) All procurement records shall be retained by the Procurement and Supply (P&S) Director for a period of 5 years after completion of construction, or full delivery of the goods or services under the contract. The official with expenditure authority shall also keep copies of all procurement records for their respective agencies. Requirements for Competition: Officials with expenditure authority shall provide for full and open competition through use of the competitive procedure that is best suited to the circumstances of the contract action. The competitive procedures available for use in fulfilling the requirement for full and open competition are as follows: (a) Competitive sealed bidding (§ 70-30.3-205) (b) Competitive sealed proposals (§ 70-30.3-210) (c) Architect-engineer services (§ 70-30.3-305); and (d) Competitive selection procedures for professional services (§ 70-30.3-310). § 70-30.3-201 Competitive sealed bidding: If there is no adequate local competition, the invitation for bids shall also be advertised in at least one regional newspaper or at least one national publication or on the internet; in such case, the P&S Director shall consider extending the bidding period. Small Purchases: Bidding is not required but is encouraged for procurement over $2,500 and under $10,000. The official with expenditure authority must obtain price quotations from at least three vendors and base the selection on competitive price and quality for procurement valued at $2,500 to $10,000. Any price quotations obtained must be written, documented, and submitted to the P&S Director for approval. Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Condition: Of forty-five expenditures tested, aggregating $4.5M of a total population of $6.4M in nonpayroll expenditures subject to procurement, the following were noted: 1. For two (or 4%), purchase order, purchase requisitions and contracts were not on file. 2. For five (or 11%), bid submissions and invitation-to-bid publications were not on file. No questioned costs are presented for Business Unit 5122 as no reimbursement were received in FY 2021. 3. For two (or 4%), no price quotations were written, documented, or submitted with the purchase order. Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Condition, continued: 4. For two or (4%), written justifications and the P&S Director’s written approvals of the emergency procurement method used were not provided. In addition, the contracts indicated the procurement used were for competitive sealed proposals; however, the procurement files support emergency procurement. Cause: CNMI did not enforce compliance with established procurement regulations over procurement. Effect: CNMI is in noncompliance with applicable procurement regulations and questioned costs of $1,240,465 result. Identification as a Repeat Finding: Finding No. 2020-032 Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Views of responsible officials: Condition 1 – CNMI Corrective Action Plan statements agreement. Condition 2 - The CIP Office disagrees with this finding. The Capital Improvement Program provided information regarding these questioned costs. For 703-OS/32200344 - RFQ20-GOV-084 was provided to the Auditor for their review. Three (3) proposers submitted a proposal. For 702-OS/32200912 - The procurement method for this was processed through a Sole Source. For CUC-WW-18-C032 - Lower Base Sewer Phase 1 - Lift Station and Focemain - This contract was executed by the Commonwealth Utilities Corporation on July 12, 2018. Procurement Services was able to obtain a copy of the contract from CUC to satisfy the audit testing. For 712727-OC (ITB20-DLNR/DOA-098) - Purchase of One (1) 13" Chipper Machine. Two bidders responded to this ITB; Boyer Trading Company & J. & J Company. Boyer Trading was selected as the lowest and responsive bidder. Condition 3 - The Office of Grants Management disagrees with these findings because these are Open Accounts, and this would mean that no price quotations were required during the purchase requisition process in order to obtain the purchase orders. As confirmed by Financial Services and Procurement Services, quotations were not required on an open account. Open accounts were allowed during the JD Edwards period and were discontinued after September 30, 2021. MUNIS was implemented in October 2021. Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Views of responsible officials, continued: Condition 4 - The Office of Grants Management (assisting DHSEM) disagrees with the finding because assigned personnel were not made aware of the documents needed; however, OGM is more than happy to provide the following documents to substantiate the purchase of a mobile Covid-19 Biological Safety Lab for the Commonwealth Healthcare Center and for the Alternate Care Site at Kanoa Resort. Per the documentation, the Public Assistance Office and DHSEM followed competitive procurement processing and invoked the Public Health Emergency Executive Order#2020-04 and to which the CNMI Attorney General’s Office approved the purchase. Purchase Order # 708019 was used by the Department of Homeland Security and Emergency Management and the Covid-19 Task Force. Contract number Covid19-0-0626 was provided. Expenses were later transferred to Department of the Interior CARES Act Funds under D20AP00049 per OGM Memo Number 2021-013. Auditor Response: Condition 2 – The bid documents, bid submissions and advertisements were not provided. Condition 3 – Per §70-30.3-220 of the CNMI Procurement Regulations that was in effect prior to May 28, 2021, the official with expenditure authority must obtain price quotations from at least three vendors and base the selection on competitive price and quality at $2,500 to $10,000. Any price quotations obtained must be written, documented, and submitted to the P&S Director for approval. Condition 4 – The supporting documents were requested on January 25, 2024 and were not provided.
Finding No. 2021-020 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Criteria: 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. CNMI’s procurement regulations state the following: Retention of Procurement Records: (a) All procurement records shall be retained by the Procurement and Supply (P&S) Director for a period of 5 years after completion of construction, or full delivery of the goods or services under the contract. The official with expenditure authority shall also keep copies of all procurement records for their respective agencies. Requirements for Competition: Officials with expenditure authority shall provide for full and open competition through use of the competitive procedure that is best suited to the circumstances of the contract action. The competitive procedures available for use in fulfilling the requirement for full and open competition are as follows: (a) Competitive sealed bidding (§ 70-30.3-205) (b) Competitive sealed proposals (§ 70-30.3-210) (c) Architect-engineer services (§ 70-30.3-305); and (d) Competitive selection procedures for professional services (§ 70-30.3-310). § 70-30.3-201 Competitive sealed bidding: If there is no adequate local competition, the invitation for bids shall also be advertised in at least one regional newspaper or at least one national publication or on the internet; in such case, the P&S Director shall consider extending the bidding period. Small Purchases: Bidding is not required but is encouraged for procurement over $2,500 and under $10,000. The official with expenditure authority must obtain price quotations from at least three vendors and base the selection on competitive price and quality for procurement valued at $2,500 to $10,000. Any price quotations obtained must be written, documented, and submitted to the P&S Director for approval. Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Condition: Of forty-five expenditures tested, aggregating $4.5M of a total population of $6.4M in nonpayroll expenditures subject to procurement, the following were noted: 1. For two (or 4%), purchase order, purchase requisitions and contracts were not on file. 2. For five (or 11%), bid submissions and invitation-to-bid publications were not on file. No questioned costs are presented for Business Unit 5122 as no reimbursement were received in FY 2021. 3. For two (or 4%), no price quotations were written, documented, or submitted with the purchase order. Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Condition, continued: 4. For two or (4%), written justifications and the P&S Director’s written approvals of the emergency procurement method used were not provided. In addition, the contracts indicated the procurement used were for competitive sealed proposals; however, the procurement files support emergency procurement. Cause: CNMI did not enforce compliance with established procurement regulations over procurement. Effect: CNMI is in noncompliance with applicable procurement regulations and questioned costs of $1,240,465 result. Identification as a Repeat Finding: Finding No. 2020-032 Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Views of responsible officials: Condition 1 – CNMI Corrective Action Plan statements agreement. Condition 2 - The CIP Office disagrees with this finding. The Capital Improvement Program provided information regarding these questioned costs. For 703-OS/32200344 - RFQ20-GOV-084 was provided to the Auditor for their review. Three (3) proposers submitted a proposal. For 702-OS/32200912 - The procurement method for this was processed through a Sole Source. For CUC-WW-18-C032 - Lower Base Sewer Phase 1 - Lift Station and Focemain - This contract was executed by the Commonwealth Utilities Corporation on July 12, 2018. Procurement Services was able to obtain a copy of the contract from CUC to satisfy the audit testing. For 712727-OC (ITB20-DLNR/DOA-098) - Purchase of One (1) 13" Chipper Machine. Two bidders responded to this ITB; Boyer Trading Company & J. & J Company. Boyer Trading was selected as the lowest and responsive bidder. Condition 3 - The Office of Grants Management disagrees with these findings because these are Open Accounts, and this would mean that no price quotations were required during the purchase requisition process in order to obtain the purchase orders. As confirmed by Financial Services and Procurement Services, quotations were not required on an open account. Open accounts were allowed during the JD Edwards period and were discontinued after September 30, 2021. MUNIS was implemented in October 2021. Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Views of responsible officials, continued: Condition 4 - The Office of Grants Management (assisting DHSEM) disagrees with the finding because assigned personnel were not made aware of the documents needed; however, OGM is more than happy to provide the following documents to substantiate the purchase of a mobile Covid-19 Biological Safety Lab for the Commonwealth Healthcare Center and for the Alternate Care Site at Kanoa Resort. Per the documentation, the Public Assistance Office and DHSEM followed competitive procurement processing and invoked the Public Health Emergency Executive Order#2020-04 and to which the CNMI Attorney General’s Office approved the purchase. Purchase Order # 708019 was used by the Department of Homeland Security and Emergency Management and the Covid-19 Task Force. Contract number Covid19-0-0626 was provided. Expenses were later transferred to Department of the Interior CARES Act Funds under D20AP00049 per OGM Memo Number 2021-013. Auditor Response: Condition 2 – The bid documents, bid submissions and advertisements were not provided. Condition 3 – Per §70-30.3-220 of the CNMI Procurement Regulations that was in effect prior to May 28, 2021, the official with expenditure authority must obtain price quotations from at least three vendors and base the selection on competitive price and quality at $2,500 to $10,000. Any price quotations obtained must be written, documented, and submitted to the P&S Director for approval. Condition 4 – The supporting documents were requested on January 25, 2024 and were not provided.
Finding No. 2021-032 Federal Agency: U.S. Department of the Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Area: Procurement and Suspension and Debarment Questioned Costs: $2,775,965 Criteria: 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. CNMI’s procurement regulations state the following: • All government procurement shall be awarded by competitive sealed bidding except under certain circumstances permitting other than full and open competition. • Bidding is not required but is encouraged for procurement of $2,500 and under $10,000. The individual with the expenditure authority must obtain price quotations from at least three vendors and should base the selection on competitive price and quality for procurement valued at $2,500 to $10,000. Any price quotations must be written, documented, and submitted to the Procurement and Supply (P&S) Director for approval. • For purchases that exceed $10,000 but which are less than or equal to $50,000, a minimum of three vendors shall be solicited to submit written or electronic quotations. If there are fewer than three vendors, the expenditure authority shall certify, in writing, to the P&S Director that fewer than three vendors responded and shall provide written proof of the request. Condition: Of fifty-one nonpayroll expenditures tested, aggregating $3.1M of a total population of $6.7M expenditures subject to procurement, the following were noted: 1. For thirty-four (or 67%), no procurement documents were provided. Finding No. 2021-032, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Area: Procurement and Suspension and Debarment Questioned Costs: $2,775,965 Condition, continued: Condition 1, continued: 2. For one (or 2%) (document no. 1718052 dated 08/10/21 amounting to $26,100), the contract and underlying procurement files were not provided, for which the amount is questioned. 3. For four (or 8%), vendor quotations were not provided. Finding No. 2021-032, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Area: Procurement and Suspension and Debarment Questioned Costs: $2,775,965 Condition, continued: 4. For one (or 2%) (document no. 1719396 dated 08/17/21 amounting $764,345), the procurement method used was not specified and the P&S Director’s written determination were not provided, for which the amount is questioned. Cause: CNMI did not enforce compliance with established procurement regulations. Effect: CNMI is in noncompliance with established procurement regulations and questioned costs of $2,775,965 result. Recommendation: Responsible personnel should monitor and enforce compliance with applicable procurement regulations, including the review of procurement files for completeness as to written rationale for deviations from applicable procurement requirements. Further, responsible personnel should maintain procurement documents to substantiate compliance. Views of Responsible Officials: Condition 2, 3 for Doc No. 263066 and 4 – The CNMI Corrective Action Plan states agreement. Condition 1 – The Department of Finance – Procurement Services disagrees with this finding. No procurement documents were provided because these thirty-four transactions were for payments made out for Travel, Medical Referral Patients, etc. Finding No. 2021-032, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Area: Procurement and Suspension and Debarment Questioned Costs: $2,775,965 Views of responsible officials: Condition 3 - The Department of Finance – Procurement Services disagrees with these findings. For 732176-000 OP $13,440 - No other quotes provided as it was the PS Acting Director's (FC Aguon) discretion, and the purchase requisition was approved by the former SOF (D. Atalig). For 724870-000 OP $8,789 - No other quotes provided as it was the PS Acting Director's (FC Aguon) discretion, and the purchase requisition was approved by the former SOF (D. Atalig). The Emergency Declaration suspended the procurement regulations and authorized the Expenditure Authority to procure any items/procure services exceeding the threshold without obtaining any price quotes. For PO #732176 & 728470, these are not part of the Gov’s Executive Order #2022-04. The Division of Procurement Services will accept the findings as noncompliance with the CNMI Procurement Regulations. Auditor Response: Condition 1 – No supporting documentation were provided to substantiate that the transactions pertain to travel and medical referral patients. In addition, based on the general ledger descriptions, Document Nos. 921922, 1727770, 1727772, 1735047, 1721009, 1717349, 261094, 1722328, 1722338, 261528, 1666323, 1665777 and 1732183 pertain to legal professional fees, Tourism Resumption Investment Plan (TRIP) program, professional services, postage meter, lease rental, air condition service, fuel, office supplies, Pelican LED rechargeable, project improvements, tents and picnic tables rental and vacuum purchases. Further, we were not able to determine the type of expenditure for document no. 1674103 as the only description stated was "JUN 2021". Condition 3 – Pursuant to § 70-30.3-220, if fewer than three vendors submit quotations, the expenditure authority shall certify, in writing, to the Director that fewer than three vendors responded and shall provide written proof of the request. If fewer than three of the solicited vendors submit quotes, the Director may either approve the request or instruct the expenditure authority to solicit additional quotes.
Finding No. 2021-037 Federal Agency: U.S. Department of Homeland Security AL Program: 97.030 Community Disaster Loans Federal Award No.: EMO-2020-LF-4404MP01 Area: Procurement and Suspension and Debarment Questioned Costs: $18,353,963 Criteria: 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. CNMI’s procurement regulations state the following: • Officials with expenditure authority shall provide for full and open competition through use of the competitive procedure that is best suited to the circumstances of the contract action. The competitive procedures available for use in fulfilling the requirement for full and open competition are as follows: (a) Competitive sealed bidding; (b) Competitive sealed proposals; (c) Architect-engineer services; and (d) Competitive selection procedures for professional services. • Emergency Procurement. o Notwithstanding any other provision of the regulations in this subchapter, the government may make emergency procurement when there exists a threat to public health, safety or welfare under emergency conditions. An emergency procurement must be as competitive as practicable under the circumstances. o A written justification of the basis for the emergency and for the selection of the particular contractor must be made by the official with expenditure authority. o If the Procurement and Supply (P&S) Director is satisfied, he shall state his approval in writing. Condition: Of fourteen expenditures tested, aggregating $18.4M of a total population of $20.2M in nonpayroll expenditures subject to procurement, the following were noted: 1. For eleven (or 79%, either the procurement files, written justifications, and the P&S Director’s written approvals of the Emergency Procurement method used were not provided. In addition, the contracts for Document Nos. 904160, 912446, 922508 and 907725 indicated procurement methods used were for competitive sealed proposals; however, the procurement files support emergency procurement. Further, the procurement information page that specifies the procurement method used for Document Nos. 912931 and 913016 were left blank but were initialed by the Legal reviewer. Finding No. 2021-037, continued Federal Agency: U.S. Department of Homeland Security AL Program: 97.030 Community Disaster Loans Federal Award No.: EMO-2020-LF-4404MP01 Area: Procurement and Suspension and Debarment Questioned Costs: $18,353,963 Condition, continued: Condition 1, continued: 2. For three (or 21%), purchase orders do not specify the procurement methods used. Finding No. 2021-037, continued Federal Agency: U.S. Department of Homeland Security AL Program: 97.030 Community Disaster Loans Federal Award No.: EMO-2020-LF-4404MP01 Area: Procurement and Suspension and Debarment Questioned Costs: $18,353,963 Cause: CNMI did not enforce compliance with applicable procurement requirements. Effect: CNMI is in noncompliance with applicable procurement requirements and questioned costs of $18,353,963 result. Recommendation: Responsible personnel should monitor and enforce compliance with applicable procurement requirements, including the review of procurement files for completeness as to written rationale for deviations from applicable procurement requirements. Further, responsible personnel should maintain procurement documents to substantiate compliance. Views of Responsible Officials: Condition 1 – The CNMI Corrective Action Plan states agreement. Condition 2 - The Department of Finance – Procurement Services disagrees with this finding. For 715112-000 OP / 727492-000 OP / 730942-000 OP. These three purchase orders were provided in the list for ALN 97.030 and were available for testing during auditor’s fieldwork. Auditors failed to perform the required testing. Auditor Response: Condition 2 – Purchase orders do not demonstrate compliance with procurement regulations.
2021-005 Criteria: 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. Condition: The Department was able to provide a procurement policy, but it was dated in 2003 and not updated for the latest federal guidelines noted in the criteria paragraph. Cause: The Department does not have internal controls in place surrounding procurement policies and procedures. Effect: The lack of internal controls surrounding the procurement policies and procedures could lead to potential funding issues in the future. Questioned Costs: None. Recommendation: We recommend that management continue to implement additional control processes in order to ensure proper controls are in place and followed. Tribal Response: Management agrees with this finding.
2021-005 Criteria: 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. Condition: The Department was able to provide a procurement policy, but it was dated in 2003 and not updated for the latest federal guidelines noted in the criteria paragraph. Cause: The Department does not have internal controls in place surrounding procurement policies and procedures. Effect: The lack of internal controls surrounding the procurement policies and procedures could lead to potential funding issues in the future. Questioned Costs: None. Recommendation: We recommend that management continue to implement additional control processes in order to ensure proper controls are in place and followed. Tribal Response: Management agrees with this finding.
Finding No. 2021-013 Federal Agency: U.S. Department of Agriculture AL Program: 10.539 CNMI Nutrition Assistance Federal Award No.: 7NM4004NM Area: Procurement and Suspension and Debarment Questioned Costs: $97,850 Criteria: 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. CNMI’s procurement regulations state the following: • All government procurement shall be awarded by competitive sealed bidding except under certain circumstances permitting other than full and open competition. • Bidding is not required but is encouraged for procurement of $2,500 and under $10,000. The individual with the expenditure authority must obtain price quotations from at least three vendors and should base the selection on competitive price and quality for procurement valued at $2,500 to $10,000. Any price quotations must be written, documented, and submitted to the Procurement and Supply (P&S) Director for approval. • For purchases that exceed $10,000 but which are less than or equal to $50,000, a minimum of three vendors shall be solicited to submit written or electronic quotations. If there are fewer than three vendors, the expenditure authority shall certify, in writing, to the P&S Director that fewer than three vendors responded and shall provide written proof of the request. • Based on Procurement Regulation 70-30.3-115(a), Contract Review, Processing, and Oversight, all contracts must first be prepared by the official with expenditure authority who shall certify that he has complied with the procurement regulations codified in this subchapter, and that the proposed contract is for a public purpose that does not constitute a waste or abuse of public funds. All contract documents are to be complete, including attachments and exhibits, if they are incorporated into the contract by reference. Condition: Of fifty nonpayroll expenditures tested, aggregating $401,852 of a total population of $756,436 in nonpayroll expenditures subject to procurement, the following were noted: 1. For one (or 2%), the bid summary was not on file (document no. 1624129, dated 02/24/21, amounting to $35,990). Therefore, the CNMI was not able to substantiate the number of bids received and whether the procurement process for competitive sealed bids were properly followed, for which the amount is questioned. Finding No. 2021-013, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.539 CNMI Nutrition Assistance Federal Award No.: 7NM4004NM Area: Procurement and Suspension and Debarment Questioned Costs: $97,850 Condition, continued: 2. For one (or 2%), the Bid Opening Summary report was not provided (document no. 1562306, dated 10/09/2020, amounting to $33,060) and no other documentations on file to substantiate that the selection was based on the lowest bidder. 3. For two (or 4%), expenditures were procured through sole source procurement methods. The written justification states that the CNMI NAP obtained quotations from two vendors. However, no documentation was provided to demonstrate efforts were made to contact and solicit from other vendors. Cause: CNMI did not enforce compliance with established regulations over procurement. Effect: CNMI is in noncompliance with applicable procurement regulations and questioned costs of $97,850 result. Identification as a Repeat Finding: Finding No. 2020-026 Finding No. 2021-013, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.539 CNMI Nutrition Assistance Federal Award No.: 7NM4004NM Area: Procurement and Suspension and Debarment Questioned Costs: $97,850 Recommendation: Responsible personnel should monitor and enforce compliance with applicable procurement requirements, including the review of procurement files for completeness as to written rationale for deviations from applicable procurement requirements. Further, responsible personnel should establish a recordkeeping system whereby underlying support is filed accordingly to substantiate compliance. Views of responsible officials: Condition 1 – The CNMI-NAP disagrees with the finding. This transaction was supposed to be processed in FY 2020 but because of the delay and completion date was done in FY 2021, a Change Order Contract No. 01 was processed, and the funds was carried over to FY 2021. The bid summary was not necessary because a change order was processed changing the account from A0551E to A1551L per NAP email dated 1/11/21 (Pending Change Order Contract) - CNC 01/13/21 Change Order #1 to charge $35,989.60 (Contract #707410-OC) to A1551L.64560 to extend the delivery period from thirty (30) days to ninety (90) days. Condition 2 – CNMI NAP disagrees with the finding. The Nutrition Assistance Program did follow the proper procurement method by processing Invitation to Bid and obtained the lowest bidder and processed the contract with a notice to proceed. Condition 3 – CNMI NAP disagrees with this finding. The CNMI NAP tried to obtain quotations to purchase perforator machines on island and there was none. However, the selected vendor submitted their price quotation stating that they are able to obtain the perforator machines from off-island and CNMI NAP can purchase from them. Finding No. 2021-013, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.539 CNMI Nutrition Assistance Federal Award No.: 7NM4004NM Area: Procurement and Suspension and Debarment Questioned Costs: $97,850 Auditor Response: Condition 1 – Although there was a change order from the original contract, all procurement records shall be retained for a period of five years after the completion of construction or full delivery of goods or services under a contract as per Section 70-30.3-285 of the Procurement Regulations. Condition 2 – Documentation substantiating that the selection was based on the lowest bidder was not provided. Condition 3 – Documentation demonstrating efforts were made to contact and solicit from other vendors was not provided.
Finding No. 2021-013 Federal Agency: U.S. Department of Agriculture AL Program: 10.539 CNMI Nutrition Assistance Federal Award No.: 7NM4004NM Area: Procurement and Suspension and Debarment Questioned Costs: $97,850 Criteria: 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. CNMI’s procurement regulations state the following: • All government procurement shall be awarded by competitive sealed bidding except under certain circumstances permitting other than full and open competition. • Bidding is not required but is encouraged for procurement of $2,500 and under $10,000. The individual with the expenditure authority must obtain price quotations from at least three vendors and should base the selection on competitive price and quality for procurement valued at $2,500 to $10,000. Any price quotations must be written, documented, and submitted to the Procurement and Supply (P&S) Director for approval. • For purchases that exceed $10,000 but which are less than or equal to $50,000, a minimum of three vendors shall be solicited to submit written or electronic quotations. If there are fewer than three vendors, the expenditure authority shall certify, in writing, to the P&S Director that fewer than three vendors responded and shall provide written proof of the request. • Based on Procurement Regulation 70-30.3-115(a), Contract Review, Processing, and Oversight, all contracts must first be prepared by the official with expenditure authority who shall certify that he has complied with the procurement regulations codified in this subchapter, and that the proposed contract is for a public purpose that does not constitute a waste or abuse of public funds. All contract documents are to be complete, including attachments and exhibits, if they are incorporated into the contract by reference. Condition: Of fifty nonpayroll expenditures tested, aggregating $401,852 of a total population of $756,436 in nonpayroll expenditures subject to procurement, the following were noted: 1. For one (or 2%), the bid summary was not on file (document no. 1624129, dated 02/24/21, amounting to $35,990). Therefore, the CNMI was not able to substantiate the number of bids received and whether the procurement process for competitive sealed bids were properly followed, for which the amount is questioned. Finding No. 2021-013, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.539 CNMI Nutrition Assistance Federal Award No.: 7NM4004NM Area: Procurement and Suspension and Debarment Questioned Costs: $97,850 Condition, continued: 2. For one (or 2%), the Bid Opening Summary report was not provided (document no. 1562306, dated 10/09/2020, amounting to $33,060) and no other documentations on file to substantiate that the selection was based on the lowest bidder. 3. For two (or 4%), expenditures were procured through sole source procurement methods. The written justification states that the CNMI NAP obtained quotations from two vendors. However, no documentation was provided to demonstrate efforts were made to contact and solicit from other vendors. Cause: CNMI did not enforce compliance with established regulations over procurement. Effect: CNMI is in noncompliance with applicable procurement regulations and questioned costs of $97,850 result. Identification as a Repeat Finding: Finding No. 2020-026 Finding No. 2021-013, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.539 CNMI Nutrition Assistance Federal Award No.: 7NM4004NM Area: Procurement and Suspension and Debarment Questioned Costs: $97,850 Recommendation: Responsible personnel should monitor and enforce compliance with applicable procurement requirements, including the review of procurement files for completeness as to written rationale for deviations from applicable procurement requirements. Further, responsible personnel should establish a recordkeeping system whereby underlying support is filed accordingly to substantiate compliance. Views of responsible officials: Condition 1 – The CNMI-NAP disagrees with the finding. This transaction was supposed to be processed in FY 2020 but because of the delay and completion date was done in FY 2021, a Change Order Contract No. 01 was processed, and the funds was carried over to FY 2021. The bid summary was not necessary because a change order was processed changing the account from A0551E to A1551L per NAP email dated 1/11/21 (Pending Change Order Contract) - CNC 01/13/21 Change Order #1 to charge $35,989.60 (Contract #707410-OC) to A1551L.64560 to extend the delivery period from thirty (30) days to ninety (90) days. Condition 2 – CNMI NAP disagrees with the finding. The Nutrition Assistance Program did follow the proper procurement method by processing Invitation to Bid and obtained the lowest bidder and processed the contract with a notice to proceed. Condition 3 – CNMI NAP disagrees with this finding. The CNMI NAP tried to obtain quotations to purchase perforator machines on island and there was none. However, the selected vendor submitted their price quotation stating that they are able to obtain the perforator machines from off-island and CNMI NAP can purchase from them. Finding No. 2021-013, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.539 CNMI Nutrition Assistance Federal Award No.: 7NM4004NM Area: Procurement and Suspension and Debarment Questioned Costs: $97,850 Auditor Response: Condition 1 – Although there was a change order from the original contract, all procurement records shall be retained for a period of five years after the completion of construction or full delivery of goods or services under a contract as per Section 70-30.3-285 of the Procurement Regulations. Condition 2 – Documentation substantiating that the selection was based on the lowest bidder was not provided. Condition 3 – Documentation demonstrating efforts were made to contact and solicit from other vendors was not provided.
Finding No. 2021-020 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Criteria: 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. CNMI’s procurement regulations state the following: Retention of Procurement Records: (a) All procurement records shall be retained by the Procurement and Supply (P&S) Director for a period of 5 years after completion of construction, or full delivery of the goods or services under the contract. The official with expenditure authority shall also keep copies of all procurement records for their respective agencies. Requirements for Competition: Officials with expenditure authority shall provide for full and open competition through use of the competitive procedure that is best suited to the circumstances of the contract action. The competitive procedures available for use in fulfilling the requirement for full and open competition are as follows: (a) Competitive sealed bidding (§ 70-30.3-205) (b) Competitive sealed proposals (§ 70-30.3-210) (c) Architect-engineer services (§ 70-30.3-305); and (d) Competitive selection procedures for professional services (§ 70-30.3-310). § 70-30.3-201 Competitive sealed bidding: If there is no adequate local competition, the invitation for bids shall also be advertised in at least one regional newspaper or at least one national publication or on the internet; in such case, the P&S Director shall consider extending the bidding period. Small Purchases: Bidding is not required but is encouraged for procurement over $2,500 and under $10,000. The official with expenditure authority must obtain price quotations from at least three vendors and base the selection on competitive price and quality for procurement valued at $2,500 to $10,000. Any price quotations obtained must be written, documented, and submitted to the P&S Director for approval. Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Condition: Of forty-five expenditures tested, aggregating $4.5M of a total population of $6.4M in nonpayroll expenditures subject to procurement, the following were noted: 1. For two (or 4%), purchase order, purchase requisitions and contracts were not on file. 2. For five (or 11%), bid submissions and invitation-to-bid publications were not on file. No questioned costs are presented for Business Unit 5122 as no reimbursement were received in FY 2021. 3. For two (or 4%), no price quotations were written, documented, or submitted with the purchase order. Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Condition, continued: 4. For two or (4%), written justifications and the P&S Director’s written approvals of the emergency procurement method used were not provided. In addition, the contracts indicated the procurement used were for competitive sealed proposals; however, the procurement files support emergency procurement. Cause: CNMI did not enforce compliance with established procurement regulations over procurement. Effect: CNMI is in noncompliance with applicable procurement regulations and questioned costs of $1,240,465 result. Identification as a Repeat Finding: Finding No. 2020-032 Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Views of responsible officials: Condition 1 – CNMI Corrective Action Plan statements agreement. Condition 2 - The CIP Office disagrees with this finding. The Capital Improvement Program provided information regarding these questioned costs. For 703-OS/32200344 - RFQ20-GOV-084 was provided to the Auditor for their review. Three (3) proposers submitted a proposal. For 702-OS/32200912 - The procurement method for this was processed through a Sole Source. For CUC-WW-18-C032 - Lower Base Sewer Phase 1 - Lift Station and Focemain - This contract was executed by the Commonwealth Utilities Corporation on July 12, 2018. Procurement Services was able to obtain a copy of the contract from CUC to satisfy the audit testing. For 712727-OC (ITB20-DLNR/DOA-098) - Purchase of One (1) 13" Chipper Machine. Two bidders responded to this ITB; Boyer Trading Company & J. & J Company. Boyer Trading was selected as the lowest and responsive bidder. Condition 3 - The Office of Grants Management disagrees with these findings because these are Open Accounts, and this would mean that no price quotations were required during the purchase requisition process in order to obtain the purchase orders. As confirmed by Financial Services and Procurement Services, quotations were not required on an open account. Open accounts were allowed during the JD Edwards period and were discontinued after September 30, 2021. MUNIS was implemented in October 2021. Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Views of responsible officials, continued: Condition 4 - The Office of Grants Management (assisting DHSEM) disagrees with the finding because assigned personnel were not made aware of the documents needed; however, OGM is more than happy to provide the following documents to substantiate the purchase of a mobile Covid-19 Biological Safety Lab for the Commonwealth Healthcare Center and for the Alternate Care Site at Kanoa Resort. Per the documentation, the Public Assistance Office and DHSEM followed competitive procurement processing and invoked the Public Health Emergency Executive Order#2020-04 and to which the CNMI Attorney General’s Office approved the purchase. Purchase Order # 708019 was used by the Department of Homeland Security and Emergency Management and the Covid-19 Task Force. Contract number Covid19-0-0626 was provided. Expenses were later transferred to Department of the Interior CARES Act Funds under D20AP00049 per OGM Memo Number 2021-013. Auditor Response: Condition 2 – The bid documents, bid submissions and advertisements were not provided. Condition 3 – Per §70-30.3-220 of the CNMI Procurement Regulations that was in effect prior to May 28, 2021, the official with expenditure authority must obtain price quotations from at least three vendors and base the selection on competitive price and quality at $2,500 to $10,000. Any price quotations obtained must be written, documented, and submitted to the P&S Director for approval. Condition 4 – The supporting documents were requested on January 25, 2024 and were not provided.
Finding No. 2021-020 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Criteria: 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. CNMI’s procurement regulations state the following: Retention of Procurement Records: (a) All procurement records shall be retained by the Procurement and Supply (P&S) Director for a period of 5 years after completion of construction, or full delivery of the goods or services under the contract. The official with expenditure authority shall also keep copies of all procurement records for their respective agencies. Requirements for Competition: Officials with expenditure authority shall provide for full and open competition through use of the competitive procedure that is best suited to the circumstances of the contract action. The competitive procedures available for use in fulfilling the requirement for full and open competition are as follows: (a) Competitive sealed bidding (§ 70-30.3-205) (b) Competitive sealed proposals (§ 70-30.3-210) (c) Architect-engineer services (§ 70-30.3-305); and (d) Competitive selection procedures for professional services (§ 70-30.3-310). § 70-30.3-201 Competitive sealed bidding: If there is no adequate local competition, the invitation for bids shall also be advertised in at least one regional newspaper or at least one national publication or on the internet; in such case, the P&S Director shall consider extending the bidding period. Small Purchases: Bidding is not required but is encouraged for procurement over $2,500 and under $10,000. The official with expenditure authority must obtain price quotations from at least three vendors and base the selection on competitive price and quality for procurement valued at $2,500 to $10,000. Any price quotations obtained must be written, documented, and submitted to the P&S Director for approval. Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Condition: Of forty-five expenditures tested, aggregating $4.5M of a total population of $6.4M in nonpayroll expenditures subject to procurement, the following were noted: 1. For two (or 4%), purchase order, purchase requisitions and contracts were not on file. 2. For five (or 11%), bid submissions and invitation-to-bid publications were not on file. No questioned costs are presented for Business Unit 5122 as no reimbursement were received in FY 2021. 3. For two (or 4%), no price quotations were written, documented, or submitted with the purchase order. Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Condition, continued: 4. For two or (4%), written justifications and the P&S Director’s written approvals of the emergency procurement method used were not provided. In addition, the contracts indicated the procurement used were for competitive sealed proposals; however, the procurement files support emergency procurement. Cause: CNMI did not enforce compliance with established procurement regulations over procurement. Effect: CNMI is in noncompliance with applicable procurement regulations and questioned costs of $1,240,465 result. Identification as a Repeat Finding: Finding No. 2020-032 Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Views of responsible officials: Condition 1 – CNMI Corrective Action Plan statements agreement. Condition 2 - The CIP Office disagrees with this finding. The Capital Improvement Program provided information regarding these questioned costs. For 703-OS/32200344 - RFQ20-GOV-084 was provided to the Auditor for their review. Three (3) proposers submitted a proposal. For 702-OS/32200912 - The procurement method for this was processed through a Sole Source. For CUC-WW-18-C032 - Lower Base Sewer Phase 1 - Lift Station and Focemain - This contract was executed by the Commonwealth Utilities Corporation on July 12, 2018. Procurement Services was able to obtain a copy of the contract from CUC to satisfy the audit testing. For 712727-OC (ITB20-DLNR/DOA-098) - Purchase of One (1) 13" Chipper Machine. Two bidders responded to this ITB; Boyer Trading Company & J. & J Company. Boyer Trading was selected as the lowest and responsive bidder. Condition 3 - The Office of Grants Management disagrees with these findings because these are Open Accounts, and this would mean that no price quotations were required during the purchase requisition process in order to obtain the purchase orders. As confirmed by Financial Services and Procurement Services, quotations were not required on an open account. Open accounts were allowed during the JD Edwards period and were discontinued after September 30, 2021. MUNIS was implemented in October 2021. Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Views of responsible officials, continued: Condition 4 - The Office of Grants Management (assisting DHSEM) disagrees with the finding because assigned personnel were not made aware of the documents needed; however, OGM is more than happy to provide the following documents to substantiate the purchase of a mobile Covid-19 Biological Safety Lab for the Commonwealth Healthcare Center and for the Alternate Care Site at Kanoa Resort. Per the documentation, the Public Assistance Office and DHSEM followed competitive procurement processing and invoked the Public Health Emergency Executive Order#2020-04 and to which the CNMI Attorney General’s Office approved the purchase. Purchase Order # 708019 was used by the Department of Homeland Security and Emergency Management and the Covid-19 Task Force. Contract number Covid19-0-0626 was provided. Expenses were later transferred to Department of the Interior CARES Act Funds under D20AP00049 per OGM Memo Number 2021-013. Auditor Response: Condition 2 – The bid documents, bid submissions and advertisements were not provided. Condition 3 – Per §70-30.3-220 of the CNMI Procurement Regulations that was in effect prior to May 28, 2021, the official with expenditure authority must obtain price quotations from at least three vendors and base the selection on competitive price and quality at $2,500 to $10,000. Any price quotations obtained must be written, documented, and submitted to the P&S Director for approval. Condition 4 – The supporting documents were requested on January 25, 2024 and were not provided.
Finding No. 2021-020 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Criteria: 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. CNMI’s procurement regulations state the following: Retention of Procurement Records: (a) All procurement records shall be retained by the Procurement and Supply (P&S) Director for a period of 5 years after completion of construction, or full delivery of the goods or services under the contract. The official with expenditure authority shall also keep copies of all procurement records for their respective agencies. Requirements for Competition: Officials with expenditure authority shall provide for full and open competition through use of the competitive procedure that is best suited to the circumstances of the contract action. The competitive procedures available for use in fulfilling the requirement for full and open competition are as follows: (a) Competitive sealed bidding (§ 70-30.3-205) (b) Competitive sealed proposals (§ 70-30.3-210) (c) Architect-engineer services (§ 70-30.3-305); and (d) Competitive selection procedures for professional services (§ 70-30.3-310). § 70-30.3-201 Competitive sealed bidding: If there is no adequate local competition, the invitation for bids shall also be advertised in at least one regional newspaper or at least one national publication or on the internet; in such case, the P&S Director shall consider extending the bidding period. Small Purchases: Bidding is not required but is encouraged for procurement over $2,500 and under $10,000. The official with expenditure authority must obtain price quotations from at least three vendors and base the selection on competitive price and quality for procurement valued at $2,500 to $10,000. Any price quotations obtained must be written, documented, and submitted to the P&S Director for approval. Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Condition: Of forty-five expenditures tested, aggregating $4.5M of a total population of $6.4M in nonpayroll expenditures subject to procurement, the following were noted: 1. For two (or 4%), purchase order, purchase requisitions and contracts were not on file. 2. For five (or 11%), bid submissions and invitation-to-bid publications were not on file. No questioned costs are presented for Business Unit 5122 as no reimbursement were received in FY 2021. 3. For two (or 4%), no price quotations were written, documented, or submitted with the purchase order. Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Condition, continued: 4. For two or (4%), written justifications and the P&S Director’s written approvals of the emergency procurement method used were not provided. In addition, the contracts indicated the procurement used were for competitive sealed proposals; however, the procurement files support emergency procurement. Cause: CNMI did not enforce compliance with established procurement regulations over procurement. Effect: CNMI is in noncompliance with applicable procurement regulations and questioned costs of $1,240,465 result. Identification as a Repeat Finding: Finding No. 2020-032 Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Views of responsible officials: Condition 1 – CNMI Corrective Action Plan statements agreement. Condition 2 - The CIP Office disagrees with this finding. The Capital Improvement Program provided information regarding these questioned costs. For 703-OS/32200344 - RFQ20-GOV-084 was provided to the Auditor for their review. Three (3) proposers submitted a proposal. For 702-OS/32200912 - The procurement method for this was processed through a Sole Source. For CUC-WW-18-C032 - Lower Base Sewer Phase 1 - Lift Station and Focemain - This contract was executed by the Commonwealth Utilities Corporation on July 12, 2018. Procurement Services was able to obtain a copy of the contract from CUC to satisfy the audit testing. For 712727-OC (ITB20-DLNR/DOA-098) - Purchase of One (1) 13" Chipper Machine. Two bidders responded to this ITB; Boyer Trading Company & J. & J Company. Boyer Trading was selected as the lowest and responsive bidder. Condition 3 - The Office of Grants Management disagrees with these findings because these are Open Accounts, and this would mean that no price quotations were required during the purchase requisition process in order to obtain the purchase orders. As confirmed by Financial Services and Procurement Services, quotations were not required on an open account. Open accounts were allowed during the JD Edwards period and were discontinued after September 30, 2021. MUNIS was implemented in October 2021. Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Views of responsible officials, continued: Condition 4 - The Office of Grants Management (assisting DHSEM) disagrees with the finding because assigned personnel were not made aware of the documents needed; however, OGM is more than happy to provide the following documents to substantiate the purchase of a mobile Covid-19 Biological Safety Lab for the Commonwealth Healthcare Center and for the Alternate Care Site at Kanoa Resort. Per the documentation, the Public Assistance Office and DHSEM followed competitive procurement processing and invoked the Public Health Emergency Executive Order#2020-04 and to which the CNMI Attorney General’s Office approved the purchase. Purchase Order # 708019 was used by the Department of Homeland Security and Emergency Management and the Covid-19 Task Force. Contract number Covid19-0-0626 was provided. Expenses were later transferred to Department of the Interior CARES Act Funds under D20AP00049 per OGM Memo Number 2021-013. Auditor Response: Condition 2 – The bid documents, bid submissions and advertisements were not provided. Condition 3 – Per §70-30.3-220 of the CNMI Procurement Regulations that was in effect prior to May 28, 2021, the official with expenditure authority must obtain price quotations from at least three vendors and base the selection on competitive price and quality at $2,500 to $10,000. Any price quotations obtained must be written, documented, and submitted to the P&S Director for approval. Condition 4 – The supporting documents were requested on January 25, 2024 and were not provided.
Finding No. 2021-020 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Criteria: 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. CNMI’s procurement regulations state the following: Retention of Procurement Records: (a) All procurement records shall be retained by the Procurement and Supply (P&S) Director for a period of 5 years after completion of construction, or full delivery of the goods or services under the contract. The official with expenditure authority shall also keep copies of all procurement records for their respective agencies. Requirements for Competition: Officials with expenditure authority shall provide for full and open competition through use of the competitive procedure that is best suited to the circumstances of the contract action. The competitive procedures available for use in fulfilling the requirement for full and open competition are as follows: (a) Competitive sealed bidding (§ 70-30.3-205) (b) Competitive sealed proposals (§ 70-30.3-210) (c) Architect-engineer services (§ 70-30.3-305); and (d) Competitive selection procedures for professional services (§ 70-30.3-310). § 70-30.3-201 Competitive sealed bidding: If there is no adequate local competition, the invitation for bids shall also be advertised in at least one regional newspaper or at least one national publication or on the internet; in such case, the P&S Director shall consider extending the bidding period. Small Purchases: Bidding is not required but is encouraged for procurement over $2,500 and under $10,000. The official with expenditure authority must obtain price quotations from at least three vendors and base the selection on competitive price and quality for procurement valued at $2,500 to $10,000. Any price quotations obtained must be written, documented, and submitted to the P&S Director for approval. Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Condition: Of forty-five expenditures tested, aggregating $4.5M of a total population of $6.4M in nonpayroll expenditures subject to procurement, the following were noted: 1. For two (or 4%), purchase order, purchase requisitions and contracts were not on file. 2. For five (or 11%), bid submissions and invitation-to-bid publications were not on file. No questioned costs are presented for Business Unit 5122 as no reimbursement were received in FY 2021. 3. For two (or 4%), no price quotations were written, documented, or submitted with the purchase order. Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Condition, continued: 4. For two or (4%), written justifications and the P&S Director’s written approvals of the emergency procurement method used were not provided. In addition, the contracts indicated the procurement used were for competitive sealed proposals; however, the procurement files support emergency procurement. Cause: CNMI did not enforce compliance with established procurement regulations over procurement. Effect: CNMI is in noncompliance with applicable procurement regulations and questioned costs of $1,240,465 result. Identification as a Repeat Finding: Finding No. 2020-032 Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Views of responsible officials: Condition 1 – CNMI Corrective Action Plan statements agreement. Condition 2 - The CIP Office disagrees with this finding. The Capital Improvement Program provided information regarding these questioned costs. For 703-OS/32200344 - RFQ20-GOV-084 was provided to the Auditor for their review. Three (3) proposers submitted a proposal. For 702-OS/32200912 - The procurement method for this was processed through a Sole Source. For CUC-WW-18-C032 - Lower Base Sewer Phase 1 - Lift Station and Focemain - This contract was executed by the Commonwealth Utilities Corporation on July 12, 2018. Procurement Services was able to obtain a copy of the contract from CUC to satisfy the audit testing. For 712727-OC (ITB20-DLNR/DOA-098) - Purchase of One (1) 13" Chipper Machine. Two bidders responded to this ITB; Boyer Trading Company & J. & J Company. Boyer Trading was selected as the lowest and responsive bidder. Condition 3 - The Office of Grants Management disagrees with these findings because these are Open Accounts, and this would mean that no price quotations were required during the purchase requisition process in order to obtain the purchase orders. As confirmed by Financial Services and Procurement Services, quotations were not required on an open account. Open accounts were allowed during the JD Edwards period and were discontinued after September 30, 2021. MUNIS was implemented in October 2021. Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Views of responsible officials, continued: Condition 4 - The Office of Grants Management (assisting DHSEM) disagrees with the finding because assigned personnel were not made aware of the documents needed; however, OGM is more than happy to provide the following documents to substantiate the purchase of a mobile Covid-19 Biological Safety Lab for the Commonwealth Healthcare Center and for the Alternate Care Site at Kanoa Resort. Per the documentation, the Public Assistance Office and DHSEM followed competitive procurement processing and invoked the Public Health Emergency Executive Order#2020-04 and to which the CNMI Attorney General’s Office approved the purchase. Purchase Order # 708019 was used by the Department of Homeland Security and Emergency Management and the Covid-19 Task Force. Contract number Covid19-0-0626 was provided. Expenses were later transferred to Department of the Interior CARES Act Funds under D20AP00049 per OGM Memo Number 2021-013. Auditor Response: Condition 2 – The bid documents, bid submissions and advertisements were not provided. Condition 3 – Per §70-30.3-220 of the CNMI Procurement Regulations that was in effect prior to May 28, 2021, the official with expenditure authority must obtain price quotations from at least three vendors and base the selection on competitive price and quality at $2,500 to $10,000. Any price quotations obtained must be written, documented, and submitted to the P&S Director for approval. Condition 4 – The supporting documents were requested on January 25, 2024 and were not provided.
Finding No. 2021-020 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Criteria: 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. CNMI’s procurement regulations state the following: Retention of Procurement Records: (a) All procurement records shall be retained by the Procurement and Supply (P&S) Director for a period of 5 years after completion of construction, or full delivery of the goods or services under the contract. The official with expenditure authority shall also keep copies of all procurement records for their respective agencies. Requirements for Competition: Officials with expenditure authority shall provide for full and open competition through use of the competitive procedure that is best suited to the circumstances of the contract action. The competitive procedures available for use in fulfilling the requirement for full and open competition are as follows: (a) Competitive sealed bidding (§ 70-30.3-205) (b) Competitive sealed proposals (§ 70-30.3-210) (c) Architect-engineer services (§ 70-30.3-305); and (d) Competitive selection procedures for professional services (§ 70-30.3-310). § 70-30.3-201 Competitive sealed bidding: If there is no adequate local competition, the invitation for bids shall also be advertised in at least one regional newspaper or at least one national publication or on the internet; in such case, the P&S Director shall consider extending the bidding period. Small Purchases: Bidding is not required but is encouraged for procurement over $2,500 and under $10,000. The official with expenditure authority must obtain price quotations from at least three vendors and base the selection on competitive price and quality for procurement valued at $2,500 to $10,000. Any price quotations obtained must be written, documented, and submitted to the P&S Director for approval. Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Condition: Of forty-five expenditures tested, aggregating $4.5M of a total population of $6.4M in nonpayroll expenditures subject to procurement, the following were noted: 1. For two (or 4%), purchase order, purchase requisitions and contracts were not on file. 2. For five (or 11%), bid submissions and invitation-to-bid publications were not on file. No questioned costs are presented for Business Unit 5122 as no reimbursement were received in FY 2021. 3. For two (or 4%), no price quotations were written, documented, or submitted with the purchase order. Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Condition, continued: 4. For two or (4%), written justifications and the P&S Director’s written approvals of the emergency procurement method used were not provided. In addition, the contracts indicated the procurement used were for competitive sealed proposals; however, the procurement files support emergency procurement. Cause: CNMI did not enforce compliance with established procurement regulations over procurement. Effect: CNMI is in noncompliance with applicable procurement regulations and questioned costs of $1,240,465 result. Identification as a Repeat Finding: Finding No. 2020-032 Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Views of responsible officials: Condition 1 – CNMI Corrective Action Plan statements agreement. Condition 2 - The CIP Office disagrees with this finding. The Capital Improvement Program provided information regarding these questioned costs. For 703-OS/32200344 - RFQ20-GOV-084 was provided to the Auditor for their review. Three (3) proposers submitted a proposal. For 702-OS/32200912 - The procurement method for this was processed through a Sole Source. For CUC-WW-18-C032 - Lower Base Sewer Phase 1 - Lift Station and Focemain - This contract was executed by the Commonwealth Utilities Corporation on July 12, 2018. Procurement Services was able to obtain a copy of the contract from CUC to satisfy the audit testing. For 712727-OC (ITB20-DLNR/DOA-098) - Purchase of One (1) 13" Chipper Machine. Two bidders responded to this ITB; Boyer Trading Company & J. & J Company. Boyer Trading was selected as the lowest and responsive bidder. Condition 3 - The Office of Grants Management disagrees with these findings because these are Open Accounts, and this would mean that no price quotations were required during the purchase requisition process in order to obtain the purchase orders. As confirmed by Financial Services and Procurement Services, quotations were not required on an open account. Open accounts were allowed during the JD Edwards period and were discontinued after September 30, 2021. MUNIS was implemented in October 2021. Finding No. 2021-020, continued Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D17AP00016, D18AP00026, D18AP00130, D18AP00140 D19AP00090, D20AP00064, D20AP00049 Area: Procurement and Suspension and Debarment Questioned Costs: $1,240,465 Views of responsible officials, continued: Condition 4 - The Office of Grants Management (assisting DHSEM) disagrees with the finding because assigned personnel were not made aware of the documents needed; however, OGM is more than happy to provide the following documents to substantiate the purchase of a mobile Covid-19 Biological Safety Lab for the Commonwealth Healthcare Center and for the Alternate Care Site at Kanoa Resort. Per the documentation, the Public Assistance Office and DHSEM followed competitive procurement processing and invoked the Public Health Emergency Executive Order#2020-04 and to which the CNMI Attorney General’s Office approved the purchase. Purchase Order # 708019 was used by the Department of Homeland Security and Emergency Management and the Covid-19 Task Force. Contract number Covid19-0-0626 was provided. Expenses were later transferred to Department of the Interior CARES Act Funds under D20AP00049 per OGM Memo Number 2021-013. Auditor Response: Condition 2 – The bid documents, bid submissions and advertisements were not provided. Condition 3 – Per §70-30.3-220 of the CNMI Procurement Regulations that was in effect prior to May 28, 2021, the official with expenditure authority must obtain price quotations from at least three vendors and base the selection on competitive price and quality at $2,500 to $10,000. Any price quotations obtained must be written, documented, and submitted to the P&S Director for approval. Condition 4 – The supporting documents were requested on January 25, 2024 and were not provided.
Finding No. 2021-032 Federal Agency: U.S. Department of the Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Area: Procurement and Suspension and Debarment Questioned Costs: $2,775,965 Criteria: 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. CNMI’s procurement regulations state the following: • All government procurement shall be awarded by competitive sealed bidding except under certain circumstances permitting other than full and open competition. • Bidding is not required but is encouraged for procurement of $2,500 and under $10,000. The individual with the expenditure authority must obtain price quotations from at least three vendors and should base the selection on competitive price and quality for procurement valued at $2,500 to $10,000. Any price quotations must be written, documented, and submitted to the Procurement and Supply (P&S) Director for approval. • For purchases that exceed $10,000 but which are less than or equal to $50,000, a minimum of three vendors shall be solicited to submit written or electronic quotations. If there are fewer than three vendors, the expenditure authority shall certify, in writing, to the P&S Director that fewer than three vendors responded and shall provide written proof of the request. Condition: Of fifty-one nonpayroll expenditures tested, aggregating $3.1M of a total population of $6.7M expenditures subject to procurement, the following were noted: 1. For thirty-four (or 67%), no procurement documents were provided. Finding No. 2021-032, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Area: Procurement and Suspension and Debarment Questioned Costs: $2,775,965 Condition, continued: Condition 1, continued: 2. For one (or 2%) (document no. 1718052 dated 08/10/21 amounting to $26,100), the contract and underlying procurement files were not provided, for which the amount is questioned. 3. For four (or 8%), vendor quotations were not provided. Finding No. 2021-032, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Area: Procurement and Suspension and Debarment Questioned Costs: $2,775,965 Condition, continued: 4. For one (or 2%) (document no. 1719396 dated 08/17/21 amounting $764,345), the procurement method used was not specified and the P&S Director’s written determination were not provided, for which the amount is questioned. Cause: CNMI did not enforce compliance with established procurement regulations. Effect: CNMI is in noncompliance with established procurement regulations and questioned costs of $2,775,965 result. Recommendation: Responsible personnel should monitor and enforce compliance with applicable procurement regulations, including the review of procurement files for completeness as to written rationale for deviations from applicable procurement requirements. Further, responsible personnel should maintain procurement documents to substantiate compliance. Views of Responsible Officials: Condition 2, 3 for Doc No. 263066 and 4 – The CNMI Corrective Action Plan states agreement. Condition 1 – The Department of Finance – Procurement Services disagrees with this finding. No procurement documents were provided because these thirty-four transactions were for payments made out for Travel, Medical Referral Patients, etc. Finding No. 2021-032, continued Federal Agency: U.S. Department of the Treasury AL Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Award No.: COVID-19 Area: Procurement and Suspension and Debarment Questioned Costs: $2,775,965 Views of responsible officials: Condition 3 - The Department of Finance – Procurement Services disagrees with these findings. For 732176-000 OP $13,440 - No other quotes provided as it was the PS Acting Director's (FC Aguon) discretion, and the purchase requisition was approved by the former SOF (D. Atalig). For 724870-000 OP $8,789 - No other quotes provided as it was the PS Acting Director's (FC Aguon) discretion, and the purchase requisition was approved by the former SOF (D. Atalig). The Emergency Declaration suspended the procurement regulations and authorized the Expenditure Authority to procure any items/procure services exceeding the threshold without obtaining any price quotes. For PO #732176 & 728470, these are not part of the Gov’s Executive Order #2022-04. The Division of Procurement Services will accept the findings as noncompliance with the CNMI Procurement Regulations. Auditor Response: Condition 1 – No supporting documentation were provided to substantiate that the transactions pertain to travel and medical referral patients. In addition, based on the general ledger descriptions, Document Nos. 921922, 1727770, 1727772, 1735047, 1721009, 1717349, 261094, 1722328, 1722338, 261528, 1666323, 1665777 and 1732183 pertain to legal professional fees, Tourism Resumption Investment Plan (TRIP) program, professional services, postage meter, lease rental, air condition service, fuel, office supplies, Pelican LED rechargeable, project improvements, tents and picnic tables rental and vacuum purchases. Further, we were not able to determine the type of expenditure for document no. 1674103 as the only description stated was "JUN 2021". Condition 3 – Pursuant to § 70-30.3-220, if fewer than three vendors submit quotations, the expenditure authority shall certify, in writing, to the Director that fewer than three vendors responded and shall provide written proof of the request. If fewer than three of the solicited vendors submit quotes, the Director may either approve the request or instruct the expenditure authority to solicit additional quotes.
Finding No. 2021-037 Federal Agency: U.S. Department of Homeland Security AL Program: 97.030 Community Disaster Loans Federal Award No.: EMO-2020-LF-4404MP01 Area: Procurement and Suspension and Debarment Questioned Costs: $18,353,963 Criteria: 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. CNMI’s procurement regulations state the following: • Officials with expenditure authority shall provide for full and open competition through use of the competitive procedure that is best suited to the circumstances of the contract action. The competitive procedures available for use in fulfilling the requirement for full and open competition are as follows: (a) Competitive sealed bidding; (b) Competitive sealed proposals; (c) Architect-engineer services; and (d) Competitive selection procedures for professional services. • Emergency Procurement. o Notwithstanding any other provision of the regulations in this subchapter, the government may make emergency procurement when there exists a threat to public health, safety or welfare under emergency conditions. An emergency procurement must be as competitive as practicable under the circumstances. o A written justification of the basis for the emergency and for the selection of the particular contractor must be made by the official with expenditure authority. o If the Procurement and Supply (P&S) Director is satisfied, he shall state his approval in writing. Condition: Of fourteen expenditures tested, aggregating $18.4M of a total population of $20.2M in nonpayroll expenditures subject to procurement, the following were noted: 1. For eleven (or 79%, either the procurement files, written justifications, and the P&S Director’s written approvals of the Emergency Procurement method used were not provided. In addition, the contracts for Document Nos. 904160, 912446, 922508 and 907725 indicated procurement methods used were for competitive sealed proposals; however, the procurement files support emergency procurement. Further, the procurement information page that specifies the procurement method used for Document Nos. 912931 and 913016 were left blank but were initialed by the Legal reviewer. Finding No. 2021-037, continued Federal Agency: U.S. Department of Homeland Security AL Program: 97.030 Community Disaster Loans Federal Award No.: EMO-2020-LF-4404MP01 Area: Procurement and Suspension and Debarment Questioned Costs: $18,353,963 Condition, continued: Condition 1, continued: 2. For three (or 21%), purchase orders do not specify the procurement methods used. Finding No. 2021-037, continued Federal Agency: U.S. Department of Homeland Security AL Program: 97.030 Community Disaster Loans Federal Award No.: EMO-2020-LF-4404MP01 Area: Procurement and Suspension and Debarment Questioned Costs: $18,353,963 Cause: CNMI did not enforce compliance with applicable procurement requirements. Effect: CNMI is in noncompliance with applicable procurement requirements and questioned costs of $18,353,963 result. Recommendation: Responsible personnel should monitor and enforce compliance with applicable procurement requirements, including the review of procurement files for completeness as to written rationale for deviations from applicable procurement requirements. Further, responsible personnel should maintain procurement documents to substantiate compliance. Views of Responsible Officials: Condition 1 – The CNMI Corrective Action Plan states agreement. Condition 2 - The Department of Finance – Procurement Services disagrees with this finding. For 715112-000 OP / 727492-000 OP / 730942-000 OP. These three purchase orders were provided in the list for ALN 97.030 and were available for testing during auditor’s fieldwork. Auditors failed to perform the required testing. Auditor Response: Condition 2 – Purchase orders do not demonstrate compliance with procurement regulations.
2021-004 - Procurement, Suspension & Debarment Federal Program Information: ALN - 10.760 - Water and Waste Disposal Systems For Rural Communities Criteria: The following CFR(s) apply to this finding: 2 CFR 200.317-200.326. Condition: During audit procedures, it was identified that the Unit’s did not have a procurement policy in place. Cause: The Town needs to adopt a procurement policy to comply with Uniform Guidance. Effect: Procurements might not conform to applicable Federal laws. Identification of Questioned Costs: None identified. Context: The entire population Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Unit adopt a procurement policy that follows the Uniform Guidance, and that the Unit implements internal control processes and procedures to ensure that the adopted policy is followed. Views of Responsible Officials and Corrective Action Plan: Client agrees with finding, and a version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the Town of Livermore Falls.
2021-007 - Procurement, Suspension & Debarment Federal Program Information: ALN - 66.458 - Clean Water State Revolving Funds Criteria: The following CFR(s) apply to this finding: 2 CFR 200.317-200.326. Condition: During audit procedures, it was identified that the Unit’s did not have a procurement policy in place. Cause: The Unit needs to adopt a procurement policy to comply with Uniform Guidance. Effect: Procurements might not conform to applicable Federal laws. Identification of Questioned Costs: None identified. Context: The population for the test consisted of 2 contracts. We requested documentation for 1 contractor from the fiscal year were examined. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Unit adopt a procurement policy that follows Uniform Guidance, and that the Unit implements internal control processes and procedures to ensure that the adopted policy is followed. Views of Responsible Officials and Corrective Action Plan: Client agrees with finding, and a version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the Town of Livermore Falls.
2021-007 - Procurement, Suspension & Debarment Federal Program Information: ALN - 66.458 - Clean Water State Revolving Funds Criteria: The following CFR(s) apply to this finding: 2 CFR 200.317-200.326. Condition: During audit procedures, it was identified that the Unit’s did not have a procurement policy in place. Cause: The Unit needs to adopt a procurement policy to comply with Uniform Guidance. Effect: Procurements might not conform to applicable Federal laws. Identification of Questioned Costs: None identified. Context: The population for the test consisted of 2 contracts. We requested documentation for 1 contractor from the fiscal year were examined. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Unit adopt a procurement policy that follows Uniform Guidance, and that the Unit implements internal control processes and procedures to ensure that the adopted policy is followed. Views of Responsible Officials and Corrective Action Plan: Client agrees with finding, and a version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the Town of Livermore Falls.
Program Information: U.S. Department of the Interior AL # Award Number Award Period Program Name 15.042 A19AV00888 7/1/2020-6/30/2021 Indian School Equalization Program 15.046 A19AV00888 7/1/2020-6/30/2021 Administrative Cost Grants for Indian Schools Criteria: 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. During the review of the School’s procurement policies, the following was noted: • Any purchase of materials, supplies, or equipment having a purchase price exceeding $5,000 shall be purchased only after having requested at least three bids or as needed, advertised for sealed bids for a period of not less than five (5) days. Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, must follow the suspension and debarment standards set out at 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension”, federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. 2 CFR § 200.303 - Internal controls states, the recipient and subrecipient must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition/Context: During the testing of 15.042, the following was noted: • 1 of 1 Individually Important Items tested did not have bidding documentation or sole source justification. • 1 of 1 samples tested did not have bidding documentation or sole source justification. During the testing of 15.046, the following was noted: • 2 of 2 Individually Important Items and 2 of 2 procurement samples did not have bidding documentation or sole source justification. • 1 of 1 Individually Important Items and 1 of 1 suspension and debarment samples did not have verification that a suspension and debarment search was performed. [ X ] Compliance Finding [ ] Significant Deficiency [ X ] Material Weakness Cause: The School was not following its policies for purchases that exceed $5,000. For suspension and debarment, there were ineffective controls in place during the period, along with management oversight. Effect: The School could be overpaying for services or items that could be obtained elsewhere for less. The School could also be engaging with vendors who are suspended or debarred. Questioned Costs: Procurement: 15.042 – None reported as known and likely questioned costs did not exceed $25,000; 15.046 – Known – $75,425. Suspension and debarment: 15.042 and 15.046 – no questioned costs. Repeat Finding: Procurement – Yes, 2020-002 for 15.042; Suspension and Debarment – No Recommendation: We recommend that the School follow its written procurement policies and maintain proper supporting documentation. Additionally, we recommend the School develop procedures to ensure that before contracting with a vendor, a search is performed on https://www.sam.gov, a screen print of the search results is performed, and the results filed in the vendor’s file. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: U.S. Department of the Interior AL # Award Number Award Period Program Name 15.042 A19AV00888 7/1/2020-6/30/2021 Indian School Equalization Program 15.046 A19AV00888 7/1/2020-6/30/2021 Administrative Cost Grants for Indian Schools Criteria: 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. During the review of the School’s procurement policies, the following was noted: • Any purchase of materials, supplies, or equipment having a purchase price exceeding $5,000 shall be purchased only after having requested at least three bids or as needed, advertised for sealed bids for a period of not less than five (5) days. Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, must follow the suspension and debarment standards set out at 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension”, federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. 2 CFR § 200.303 - Internal controls states, the recipient and subrecipient must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition/Context: During the testing of 15.042, the following was noted: • 1 of 1 Individually Important Items tested did not have bidding documentation or sole source justification. • 1 of 1 samples tested did not have bidding documentation or sole source justification. During the testing of 15.046, the following was noted: • 2 of 2 Individually Important Items and 2 of 2 procurement samples did not have bidding documentation or sole source justification. • 1 of 1 Individually Important Items and 1 of 1 suspension and debarment samples did not have verification that a suspension and debarment search was performed. [ X ] Compliance Finding [ ] Significant Deficiency [ X ] Material Weakness Cause: The School was not following its policies for purchases that exceed $5,000. For suspension and debarment, there were ineffective controls in place during the period, along with management oversight. Effect: The School could be overpaying for services or items that could be obtained elsewhere for less. The School could also be engaging with vendors who are suspended or debarred. Questioned Costs: Procurement: 15.042 – None reported as known and likely questioned costs did not exceed $25,000; 15.046 – Known – $75,425. Suspension and debarment: 15.042 and 15.046 – no questioned costs. Repeat Finding: Procurement – Yes, 2020-002 for 15.042; Suspension and Debarment – No Recommendation: We recommend that the School follow its written procurement policies and maintain proper supporting documentation. Additionally, we recommend the School develop procedures to ensure that before contracting with a vendor, a search is performed on https://www.sam.gov, a screen print of the search results is performed, and the results filed in the vendor’s file. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
2021-004 - Procurement, Suspension & Debarment Federal Program Information: ALN - 10.760 - Water and Waste Disposal Systems For Rural Communities Criteria: The following CFR(s) apply to this finding: 2 CFR 200.317-200.326. Condition: During audit procedures, it was identified that the Unit’s did not have a procurement policy in place. Cause: The Town needs to adopt a procurement policy to comply with Uniform Guidance. Effect: Procurements might not conform to applicable Federal laws. Identification of Questioned Costs: None identified. Context: The entire population Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Unit adopt a procurement policy that follows the Uniform Guidance, and that the Unit implements internal control processes and procedures to ensure that the adopted policy is followed. Views of Responsible Officials and Corrective Action Plan: Client agrees with finding, and a version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the Town of Livermore Falls.
2021-007 - Procurement, Suspension & Debarment Federal Program Information: ALN - 66.458 - Clean Water State Revolving Funds Criteria: The following CFR(s) apply to this finding: 2 CFR 200.317-200.326. Condition: During audit procedures, it was identified that the Unit’s did not have a procurement policy in place. Cause: The Unit needs to adopt a procurement policy to comply with Uniform Guidance. Effect: Procurements might not conform to applicable Federal laws. Identification of Questioned Costs: None identified. Context: The population for the test consisted of 2 contracts. We requested documentation for 1 contractor from the fiscal year were examined. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Unit adopt a procurement policy that follows Uniform Guidance, and that the Unit implements internal control processes and procedures to ensure that the adopted policy is followed. Views of Responsible Officials and Corrective Action Plan: Client agrees with finding, and a version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the Town of Livermore Falls.
2021-007 - Procurement, Suspension & Debarment Federal Program Information: ALN - 66.458 - Clean Water State Revolving Funds Criteria: The following CFR(s) apply to this finding: 2 CFR 200.317-200.326. Condition: During audit procedures, it was identified that the Unit’s did not have a procurement policy in place. Cause: The Unit needs to adopt a procurement policy to comply with Uniform Guidance. Effect: Procurements might not conform to applicable Federal laws. Identification of Questioned Costs: None identified. Context: The population for the test consisted of 2 contracts. We requested documentation for 1 contractor from the fiscal year were examined. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Unit adopt a procurement policy that follows Uniform Guidance, and that the Unit implements internal control processes and procedures to ensure that the adopted policy is followed. Views of Responsible Officials and Corrective Action Plan: Client agrees with finding, and a version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the Town of Livermore Falls.
Program Information: U.S. Department of the Interior AL # Award Number Award Period Program Name 15.042 A19AV00888 7/1/2020-6/30/2021 Indian School Equalization Program 15.046 A19AV00888 7/1/2020-6/30/2021 Administrative Cost Grants for Indian Schools Criteria: 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. During the review of the School’s procurement policies, the following was noted: • Any purchase of materials, supplies, or equipment having a purchase price exceeding $5,000 shall be purchased only after having requested at least three bids or as needed, advertised for sealed bids for a period of not less than five (5) days. Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, must follow the suspension and debarment standards set out at 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension”, federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. 2 CFR § 200.303 - Internal controls states, the recipient and subrecipient must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition/Context: During the testing of 15.042, the following was noted: • 1 of 1 Individually Important Items tested did not have bidding documentation or sole source justification. • 1 of 1 samples tested did not have bidding documentation or sole source justification. During the testing of 15.046, the following was noted: • 2 of 2 Individually Important Items and 2 of 2 procurement samples did not have bidding documentation or sole source justification. • 1 of 1 Individually Important Items and 1 of 1 suspension and debarment samples did not have verification that a suspension and debarment search was performed. [ X ] Compliance Finding [ ] Significant Deficiency [ X ] Material Weakness Cause: The School was not following its policies for purchases that exceed $5,000. For suspension and debarment, there were ineffective controls in place during the period, along with management oversight. Effect: The School could be overpaying for services or items that could be obtained elsewhere for less. The School could also be engaging with vendors who are suspended or debarred. Questioned Costs: Procurement: 15.042 – None reported as known and likely questioned costs did not exceed $25,000; 15.046 – Known – $75,425. Suspension and debarment: 15.042 and 15.046 – no questioned costs. Repeat Finding: Procurement – Yes, 2020-002 for 15.042; Suspension and Debarment – No Recommendation: We recommend that the School follow its written procurement policies and maintain proper supporting documentation. Additionally, we recommend the School develop procedures to ensure that before contracting with a vendor, a search is performed on https://www.sam.gov, a screen print of the search results is performed, and the results filed in the vendor’s file. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: U.S. Department of the Interior AL # Award Number Award Period Program Name 15.042 A19AV00888 7/1/2020-6/30/2021 Indian School Equalization Program 15.046 A19AV00888 7/1/2020-6/30/2021 Administrative Cost Grants for Indian Schools Criteria: 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. During the review of the School’s procurement policies, the following was noted: • Any purchase of materials, supplies, or equipment having a purchase price exceeding $5,000 shall be purchased only after having requested at least three bids or as needed, advertised for sealed bids for a period of not less than five (5) days. Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, must follow the suspension and debarment standards set out at 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension”, federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. 2 CFR § 200.303 - Internal controls states, the recipient and subrecipient must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition/Context: During the testing of 15.042, the following was noted: • 1 of 1 Individually Important Items tested did not have bidding documentation or sole source justification. • 1 of 1 samples tested did not have bidding documentation or sole source justification. During the testing of 15.046, the following was noted: • 2 of 2 Individually Important Items and 2 of 2 procurement samples did not have bidding documentation or sole source justification. • 1 of 1 Individually Important Items and 1 of 1 suspension and debarment samples did not have verification that a suspension and debarment search was performed. [ X ] Compliance Finding [ ] Significant Deficiency [ X ] Material Weakness Cause: The School was not following its policies for purchases that exceed $5,000. For suspension and debarment, there were ineffective controls in place during the period, along with management oversight. Effect: The School could be overpaying for services or items that could be obtained elsewhere for less. The School could also be engaging with vendors who are suspended or debarred. Questioned Costs: Procurement: 15.042 – None reported as known and likely questioned costs did not exceed $25,000; 15.046 – Known – $75,425. Suspension and debarment: 15.042 and 15.046 – no questioned costs. Repeat Finding: Procurement – Yes, 2020-002 for 15.042; Suspension and Debarment – No Recommendation: We recommend that the School follow its written procurement policies and maintain proper supporting documentation. Additionally, we recommend the School develop procedures to ensure that before contracting with a vendor, a search is performed on https://www.sam.gov, a screen print of the search results is performed, and the results filed in the vendor’s file. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
MW2020-007 PROCUREMENT, SUSPENSION AND DEBARMENT (REPEAT FINDING) (PREVIOUSLY REPORTED AS MW2019-004) Condition CUAHSI had a policy in place regarding procurement of which they were unable to provide any documentation that they complied with the policy. There was no documentation for one payment made to the Board Member for $15,000. While there were invoices for the remaining amounts, there was no documentation maintained that showed CUAHSI verified expenses were incurred from vendors that were not suspended or debarred. Criteria The requirements for this compliance requirement are contained in 2 CFR sections 200.317- 200.326; 48 CFR parts 03, 15, 44, and the clauses at 48 CRF sections 52.244-2, 52.244-5, 52.203-13, 52.203-16 and 52.215-12; agency FAR supplements; 2 CFR part 180; OMB M-18- 18; and the terms and conditions of the federal award. There is a requirement to verify that contractors in covered transactions or any of its vendors are not federally debarred, suspended, or excluded. Cause CUAHSI has a policy in place to meet the procurement requirements but there was no evidence of compliance with that policy. Effect CUAHSI is not in compliance with UG requirements, there could be future legal action, the repayment of funds, loss of reputation and possible suspension or debarment.Recommendation It is recommended that CUAHSI strive to prioritize compliance. CUAHSI should ensure that, to the extent practicable, the use of a competitive procurement process in compliance with 2 CFR section 200/317. Current Year Status This condition still exists for the year ended December 31, 2020. During the completion of the audit, the auditor noted that CUAHSI failed to maintain and provide the proper records and support to document their review of vendor files. Such failure led to non-compliance with the procurement, suspension and debarment policies in accordance with the UG for the year ended December 31, 2020. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering, Office of Cyber Infrastructure & Integrative Activities AL No.: 47.050, 47.070, 47.079, 47.080 & 47.083 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019-05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), EAR-2028793 (05/15/2020 – 04/30/2021), OAC-1931278 (10/1/2019 – 09/30/2022), OAC-1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OISE-1855654 (05/15/2019 – 12/31/2023), OAC-1664061 (10/01/17 – 09/30/2022) & OIA-1937099 (09/01/2020 – 08/31/2021) Pass Through Entity: Utah State University & University of Cincinnati MW2020-007 PROCUREMENT, SUSPENSION AND DEBARMENT Criteria The requirements for this compliance requirement are contained in 2 CFR sections 200.317- 200.326; 48 CFR parts 03, 15, 44, and the clauses at 48 CRF sections 52.244-2, 52.244-5, 52.203-13, 52.203-16 and 52.215-12; agency FAR supplements; 2 CFR part 180; OMB M-18-18; and the terms and conditions of the federal award. There is a requirement to verify that contractors in covered transactions or any of its vendors are not federally debarred, suspended, or excluded. A covered transaction is a nonprocurement or procurement transaction in excess of $25,000 that is subject to the prohibitions noted in 2 CFR part 180. The covered transaction may be at the primary tier, between a federal agency and a person or a lower tier between a participant in a covered transaction and another person. Condition During the completion of the audit, the auditor noted that CUAHSI failed to maintain and provide the proper records and support to document their review of vendor files for covered transactions. Such failure led to non-compliance with the procurement, suspension and debarment policies in accordance with the UG for the year ended December 31, 2020. CUAHSI did not complete the verification of its 2020 vendors until 2024. Based on our testing, no contractors in covered transactions were deemed to be federally debarred, suspended or excluded. Cause & Context CUAHSI has a policy in place to meet the procurement requirements but there was no evidence of compliance with that policy. Effect As a result of noncompliance, there could be possible repayment of funds, loss of reputation and possible suspension or debarment. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2019-004. Recommendation It is recommended that CUAHSI strive to prioritize compliance. CUAHSI should ensure that, to the extent practicable, the use of a competitive procurement process in compliance with 2 CFR section 200/317. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering, Office of Cyber Infrastructure & Integrative Activities AL No.: 47.050, 47.070, 47.079, 47.080 & 47.083 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019-05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), EAR-2028793 (05/15/2020 – 04/30/2021), OAC-1931278 (10/1/2019 – 09/30/2022), OAC-1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OISE-1855654 (05/15/2019 – 12/31/2023), OAC-1664061 (10/01/17 – 09/30/2022) & OIA-1937099 (09/01/2020 – 08/31/2021) Pass Through Entity: Utah State University & University of Cincinnati MW2020-007 PROCUREMENT, SUSPENSION AND DEBARMENT Criteria The requirements for this compliance requirement are contained in 2 CFR sections 200.317- 200.326; 48 CFR parts 03, 15, 44, and the clauses at 48 CRF sections 52.244-2, 52.244-5, 52.203-13, 52.203-16 and 52.215-12; agency FAR supplements; 2 CFR part 180; OMB M-18-18; and the terms and conditions of the federal award. There is a requirement to verify that contractors in covered transactions or any of its vendors are not federally debarred, suspended, or excluded. A covered transaction is a nonprocurement or procurement transaction in excess of $25,000 that is subject to the prohibitions noted in 2 CFR part 180. The covered transaction may be at the primary tier, between a federal agency and a person or a lower tier between a participant in a covered transaction and another person. Condition During the completion of the audit, the auditor noted that CUAHSI failed to maintain and provide the proper records and support to document their review of vendor files for covered transactions. Such failure led to non-compliance with the procurement, suspension and debarment policies in accordance with the UG for the year ended December 31, 2020. CUAHSI did not complete the verification of its 2020 vendors until 2024. Based on our testing, no contractors in covered transactions were deemed to be federally debarred, suspended or excluded. Cause & Context CUAHSI has a policy in place to meet the procurement requirements but there was no evidence of compliance with that policy. Effect As a result of noncompliance, there could be possible repayment of funds, loss of reputation and possible suspension or debarment. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2019-004. Recommendation It is recommended that CUAHSI strive to prioritize compliance. CUAHSI should ensure that, to the extent practicable, the use of a competitive procurement process in compliance with 2 CFR section 200/317. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering, Office of Cyber Infrastructure & Integrative Activities AL No.: 47.050, 47.070, 47.079, 47.080 & 47.083 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019-05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), EAR-2028793 (05/15/2020 – 04/30/2021), OAC-1931278 (10/1/2019 – 09/30/2022), OAC-1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OISE-1855654 (05/15/2019 – 12/31/2023), OAC-1664061 (10/01/17 – 09/30/2022) & OIA-1937099 (09/01/2020 – 08/31/2021) Pass Through Entity: Utah State University & University of Cincinnati MW2020-007 PROCUREMENT, SUSPENSION AND DEBARMENT Criteria The requirements for this compliance requirement are contained in 2 CFR sections 200.317- 200.326; 48 CFR parts 03, 15, 44, and the clauses at 48 CRF sections 52.244-2, 52.244-5, 52.203-13, 52.203-16 and 52.215-12; agency FAR supplements; 2 CFR part 180; OMB M-18-18; and the terms and conditions of the federal award. There is a requirement to verify that contractors in covered transactions or any of its vendors are not federally debarred, suspended, or excluded. A covered transaction is a nonprocurement or procurement transaction in excess of $25,000 that is subject to the prohibitions noted in 2 CFR part 180. The covered transaction may be at the primary tier, between a federal agency and a person or a lower tier between a participant in a covered transaction and another person. Condition During the completion of the audit, the auditor noted that CUAHSI failed to maintain and provide the proper records and support to document their review of vendor files for covered transactions. Such failure led to non-compliance with the procurement, suspension and debarment policies in accordance with the UG for the year ended December 31, 2020. CUAHSI did not complete the verification of its 2020 vendors until 2024. Based on our testing, no contractors in covered transactions were deemed to be federally debarred, suspended or excluded. Cause & Context CUAHSI has a policy in place to meet the procurement requirements but there was no evidence of compliance with that policy. Effect As a result of noncompliance, there could be possible repayment of funds, loss of reputation and possible suspension or debarment. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2019-004. Recommendation It is recommended that CUAHSI strive to prioritize compliance. CUAHSI should ensure that, to the extent practicable, the use of a competitive procurement process in compliance with 2 CFR section 200/317. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering, Office of Cyber Infrastructure & Integrative Activities AL No.: 47.050, 47.070, 47.079, 47.080 & 47.083 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019-05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), EAR-2028793 (05/15/2020 – 04/30/2021), OAC-1931278 (10/1/2019 – 09/30/2022), OAC-1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OISE-1855654 (05/15/2019 – 12/31/2023), OAC-1664061 (10/01/17 – 09/30/2022) & OIA-1937099 (09/01/2020 – 08/31/2021) Pass Through Entity: Utah State University & University of Cincinnati MW2020-007 PROCUREMENT, SUSPENSION AND DEBARMENT Criteria The requirements for this compliance requirement are contained in 2 CFR sections 200.317- 200.326; 48 CFR parts 03, 15, 44, and the clauses at 48 CRF sections 52.244-2, 52.244-5, 52.203-13, 52.203-16 and 52.215-12; agency FAR supplements; 2 CFR part 180; OMB M-18-18; and the terms and conditions of the federal award. There is a requirement to verify that contractors in covered transactions or any of its vendors are not federally debarred, suspended, or excluded. A covered transaction is a nonprocurement or procurement transaction in excess of $25,000 that is subject to the prohibitions noted in 2 CFR part 180. The covered transaction may be at the primary tier, between a federal agency and a person or a lower tier between a participant in a covered transaction and another person. Condition During the completion of the audit, the auditor noted that CUAHSI failed to maintain and provide the proper records and support to document their review of vendor files for covered transactions. Such failure led to non-compliance with the procurement, suspension and debarment policies in accordance with the UG for the year ended December 31, 2020. CUAHSI did not complete the verification of its 2020 vendors until 2024. Based on our testing, no contractors in covered transactions were deemed to be federally debarred, suspended or excluded. Cause & Context CUAHSI has a policy in place to meet the procurement requirements but there was no evidence of compliance with that policy. Effect As a result of noncompliance, there could be possible repayment of funds, loss of reputation and possible suspension or debarment. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2019-004. Recommendation It is recommended that CUAHSI strive to prioritize compliance. CUAHSI should ensure that, to the extent practicable, the use of a competitive procurement process in compliance with 2 CFR section 200/317. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering, Office of Cyber Infrastructure & Integrative Activities AL No.: 47.050, 47.070, 47.079, 47.080 & 47.083 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019-05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), EAR-2028793 (05/15/2020 – 04/30/2021), OAC-1931278 (10/1/2019 – 09/30/2022), OAC-1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OISE-1855654 (05/15/2019 – 12/31/2023), OAC-1664061 (10/01/17 – 09/30/2022) & OIA-1937099 (09/01/2020 – 08/31/2021) Pass Through Entity: Utah State University & University of Cincinnati MW2020-007 PROCUREMENT, SUSPENSION AND DEBARMENT Criteria The requirements for this compliance requirement are contained in 2 CFR sections 200.317- 200.326; 48 CFR parts 03, 15, 44, and the clauses at 48 CRF sections 52.244-2, 52.244-5, 52.203-13, 52.203-16 and 52.215-12; agency FAR supplements; 2 CFR part 180; OMB M-18-18; and the terms and conditions of the federal award. There is a requirement to verify that contractors in covered transactions or any of its vendors are not federally debarred, suspended, or excluded. A covered transaction is a nonprocurement or procurement transaction in excess of $25,000 that is subject to the prohibitions noted in 2 CFR part 180. The covered transaction may be at the primary tier, between a federal agency and a person or a lower tier between a participant in a covered transaction and another person. Condition During the completion of the audit, the auditor noted that CUAHSI failed to maintain and provide the proper records and support to document their review of vendor files for covered transactions. Such failure led to non-compliance with the procurement, suspension and debarment policies in accordance with the UG for the year ended December 31, 2020. CUAHSI did not complete the verification of its 2020 vendors until 2024. Based on our testing, no contractors in covered transactions were deemed to be federally debarred, suspended or excluded. Cause & Context CUAHSI has a policy in place to meet the procurement requirements but there was no evidence of compliance with that policy. Effect As a result of noncompliance, there could be possible repayment of funds, loss of reputation and possible suspension or debarment. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2019-004. Recommendation It is recommended that CUAHSI strive to prioritize compliance. CUAHSI should ensure that, to the extent practicable, the use of a competitive procurement process in compliance with 2 CFR section 200/317. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
MW2020-007 PROCUREMENT, SUSPENSION AND DEBARMENT (REPEAT FINDING) (PREVIOUSLY REPORTED AS MW2019-004) Condition CUAHSI had a policy in place regarding procurement of which they were unable to provide any documentation that they complied with the policy. There was no documentation for one payment made to the Board Member for $15,000. While there were invoices for the remaining amounts, there was no documentation maintained that showed CUAHSI verified expenses were incurred from vendors that were not suspended or debarred. Criteria The requirements for this compliance requirement are contained in 2 CFR sections 200.317- 200.326; 48 CFR parts 03, 15, 44, and the clauses at 48 CRF sections 52.244-2, 52.244-5, 52.203-13, 52.203-16 and 52.215-12; agency FAR supplements; 2 CFR part 180; OMB M-18- 18; and the terms and conditions of the federal award. There is a requirement to verify that contractors in covered transactions or any of its vendors are not federally debarred, suspended, or excluded. Cause CUAHSI has a policy in place to meet the procurement requirements but there was no evidence of compliance with that policy. Effect CUAHSI is not in compliance with UG requirements, there could be future legal action, the repayment of funds, loss of reputation and possible suspension or debarment.Recommendation It is recommended that CUAHSI strive to prioritize compliance. CUAHSI should ensure that, to the extent practicable, the use of a competitive procurement process in compliance with 2 CFR section 200/317. Current Year Status This condition still exists for the year ended December 31, 2020. During the completion of the audit, the auditor noted that CUAHSI failed to maintain and provide the proper records and support to document their review of vendor files. Such failure led to non-compliance with the procurement, suspension and debarment policies in accordance with the UG for the year ended December 31, 2020. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering, Office of Cyber Infrastructure & Integrative Activities AL No.: 47.050, 47.070, 47.079, 47.080 & 47.083 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019-05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), EAR-2028793 (05/15/2020 – 04/30/2021), OAC-1931278 (10/1/2019 – 09/30/2022), OAC-1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OISE-1855654 (05/15/2019 – 12/31/2023), OAC-1664061 (10/01/17 – 09/30/2022) & OIA-1937099 (09/01/2020 – 08/31/2021) Pass Through Entity: Utah State University & University of Cincinnati MW2020-007 PROCUREMENT, SUSPENSION AND DEBARMENT Criteria The requirements for this compliance requirement are contained in 2 CFR sections 200.317- 200.326; 48 CFR parts 03, 15, 44, and the clauses at 48 CRF sections 52.244-2, 52.244-5, 52.203-13, 52.203-16 and 52.215-12; agency FAR supplements; 2 CFR part 180; OMB M-18-18; and the terms and conditions of the federal award. There is a requirement to verify that contractors in covered transactions or any of its vendors are not federally debarred, suspended, or excluded. A covered transaction is a nonprocurement or procurement transaction in excess of $25,000 that is subject to the prohibitions noted in 2 CFR part 180. The covered transaction may be at the primary tier, between a federal agency and a person or a lower tier between a participant in a covered transaction and another person. Condition During the completion of the audit, the auditor noted that CUAHSI failed to maintain and provide the proper records and support to document their review of vendor files for covered transactions. Such failure led to non-compliance with the procurement, suspension and debarment policies in accordance with the UG for the year ended December 31, 2020. CUAHSI did not complete the verification of its 2020 vendors until 2024. Based on our testing, no contractors in covered transactions were deemed to be federally debarred, suspended or excluded. Cause & Context CUAHSI has a policy in place to meet the procurement requirements but there was no evidence of compliance with that policy. Effect As a result of noncompliance, there could be possible repayment of funds, loss of reputation and possible suspension or debarment. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2019-004. Recommendation It is recommended that CUAHSI strive to prioritize compliance. CUAHSI should ensure that, to the extent practicable, the use of a competitive procurement process in compliance with 2 CFR section 200/317. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering, Office of Cyber Infrastructure & Integrative Activities AL No.: 47.050, 47.070, 47.079, 47.080 & 47.083 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019-05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), EAR-2028793 (05/15/2020 – 04/30/2021), OAC-1931278 (10/1/2019 – 09/30/2022), OAC-1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OISE-1855654 (05/15/2019 – 12/31/2023), OAC-1664061 (10/01/17 – 09/30/2022) & OIA-1937099 (09/01/2020 – 08/31/2021) Pass Through Entity: Utah State University & University of Cincinnati MW2020-007 PROCUREMENT, SUSPENSION AND DEBARMENT Criteria The requirements for this compliance requirement are contained in 2 CFR sections 200.317- 200.326; 48 CFR parts 03, 15, 44, and the clauses at 48 CRF sections 52.244-2, 52.244-5, 52.203-13, 52.203-16 and 52.215-12; agency FAR supplements; 2 CFR part 180; OMB M-18-18; and the terms and conditions of the federal award. There is a requirement to verify that contractors in covered transactions or any of its vendors are not federally debarred, suspended, or excluded. A covered transaction is a nonprocurement or procurement transaction in excess of $25,000 that is subject to the prohibitions noted in 2 CFR part 180. The covered transaction may be at the primary tier, between a federal agency and a person or a lower tier between a participant in a covered transaction and another person. Condition During the completion of the audit, the auditor noted that CUAHSI failed to maintain and provide the proper records and support to document their review of vendor files for covered transactions. Such failure led to non-compliance with the procurement, suspension and debarment policies in accordance with the UG for the year ended December 31, 2020. CUAHSI did not complete the verification of its 2020 vendors until 2024. Based on our testing, no contractors in covered transactions were deemed to be federally debarred, suspended or excluded. Cause & Context CUAHSI has a policy in place to meet the procurement requirements but there was no evidence of compliance with that policy. Effect As a result of noncompliance, there could be possible repayment of funds, loss of reputation and possible suspension or debarment. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2019-004. Recommendation It is recommended that CUAHSI strive to prioritize compliance. CUAHSI should ensure that, to the extent practicable, the use of a competitive procurement process in compliance with 2 CFR section 200/317. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering, Office of Cyber Infrastructure & Integrative Activities AL No.: 47.050, 47.070, 47.079, 47.080 & 47.083 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019-05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), EAR-2028793 (05/15/2020 – 04/30/2021), OAC-1931278 (10/1/2019 – 09/30/2022), OAC-1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OISE-1855654 (05/15/2019 – 12/31/2023), OAC-1664061 (10/01/17 – 09/30/2022) & OIA-1937099 (09/01/2020 – 08/31/2021) Pass Through Entity: Utah State University & University of Cincinnati MW2020-007 PROCUREMENT, SUSPENSION AND DEBARMENT Criteria The requirements for this compliance requirement are contained in 2 CFR sections 200.317- 200.326; 48 CFR parts 03, 15, 44, and the clauses at 48 CRF sections 52.244-2, 52.244-5, 52.203-13, 52.203-16 and 52.215-12; agency FAR supplements; 2 CFR part 180; OMB M-18-18; and the terms and conditions of the federal award. There is a requirement to verify that contractors in covered transactions or any of its vendors are not federally debarred, suspended, or excluded. A covered transaction is a nonprocurement or procurement transaction in excess of $25,000 that is subject to the prohibitions noted in 2 CFR part 180. The covered transaction may be at the primary tier, between a federal agency and a person or a lower tier between a participant in a covered transaction and another person. Condition During the completion of the audit, the auditor noted that CUAHSI failed to maintain and provide the proper records and support to document their review of vendor files for covered transactions. Such failure led to non-compliance with the procurement, suspension and debarment policies in accordance with the UG for the year ended December 31, 2020. CUAHSI did not complete the verification of its 2020 vendors until 2024. Based on our testing, no contractors in covered transactions were deemed to be federally debarred, suspended or excluded. Cause & Context CUAHSI has a policy in place to meet the procurement requirements but there was no evidence of compliance with that policy. Effect As a result of noncompliance, there could be possible repayment of funds, loss of reputation and possible suspension or debarment. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2019-004. Recommendation It is recommended that CUAHSI strive to prioritize compliance. CUAHSI should ensure that, to the extent practicable, the use of a competitive procurement process in compliance with 2 CFR section 200/317. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering, Office of Cyber Infrastructure & Integrative Activities AL No.: 47.050, 47.070, 47.079, 47.080 & 47.083 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019-05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), EAR-2028793 (05/15/2020 – 04/30/2021), OAC-1931278 (10/1/2019 – 09/30/2022), OAC-1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OISE-1855654 (05/15/2019 – 12/31/2023), OAC-1664061 (10/01/17 – 09/30/2022) & OIA-1937099 (09/01/2020 – 08/31/2021) Pass Through Entity: Utah State University & University of Cincinnati MW2020-007 PROCUREMENT, SUSPENSION AND DEBARMENT Criteria The requirements for this compliance requirement are contained in 2 CFR sections 200.317- 200.326; 48 CFR parts 03, 15, 44, and the clauses at 48 CRF sections 52.244-2, 52.244-5, 52.203-13, 52.203-16 and 52.215-12; agency FAR supplements; 2 CFR part 180; OMB M-18-18; and the terms and conditions of the federal award. There is a requirement to verify that contractors in covered transactions or any of its vendors are not federally debarred, suspended, or excluded. A covered transaction is a nonprocurement or procurement transaction in excess of $25,000 that is subject to the prohibitions noted in 2 CFR part 180. The covered transaction may be at the primary tier, between a federal agency and a person or a lower tier between a participant in a covered transaction and another person. Condition During the completion of the audit, the auditor noted that CUAHSI failed to maintain and provide the proper records and support to document their review of vendor files for covered transactions. Such failure led to non-compliance with the procurement, suspension and debarment policies in accordance with the UG for the year ended December 31, 2020. CUAHSI did not complete the verification of its 2020 vendors until 2024. Based on our testing, no contractors in covered transactions were deemed to be federally debarred, suspended or excluded. Cause & Context CUAHSI has a policy in place to meet the procurement requirements but there was no evidence of compliance with that policy. Effect As a result of noncompliance, there could be possible repayment of funds, loss of reputation and possible suspension or debarment. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2019-004. Recommendation It is recommended that CUAHSI strive to prioritize compliance. CUAHSI should ensure that, to the extent practicable, the use of a competitive procurement process in compliance with 2 CFR section 200/317. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Federal agency name: U.S. National Science Foundation Federal program title: Geosciences, Computer and Information Science and Engineering, Office of Cyber Infrastructure & Integrative Activities AL No.: 47.050, 47.070, 47.079, 47.080 & 47.083 Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019-05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), EAR-2028793 (05/15/2020 – 04/30/2021), OAC-1931278 (10/1/2019 – 09/30/2022), OAC-1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OISE-1855654 (05/15/2019 – 12/31/2023), OAC-1664061 (10/01/17 – 09/30/2022) & OIA-1937099 (09/01/2020 – 08/31/2021) Pass Through Entity: Utah State University & University of Cincinnati MW2020-007 PROCUREMENT, SUSPENSION AND DEBARMENT Criteria The requirements for this compliance requirement are contained in 2 CFR sections 200.317- 200.326; 48 CFR parts 03, 15, 44, and the clauses at 48 CRF sections 52.244-2, 52.244-5, 52.203-13, 52.203-16 and 52.215-12; agency FAR supplements; 2 CFR part 180; OMB M-18-18; and the terms and conditions of the federal award. There is a requirement to verify that contractors in covered transactions or any of its vendors are not federally debarred, suspended, or excluded. A covered transaction is a nonprocurement or procurement transaction in excess of $25,000 that is subject to the prohibitions noted in 2 CFR part 180. The covered transaction may be at the primary tier, between a federal agency and a person or a lower tier between a participant in a covered transaction and another person. Condition During the completion of the audit, the auditor noted that CUAHSI failed to maintain and provide the proper records and support to document their review of vendor files for covered transactions. Such failure led to non-compliance with the procurement, suspension and debarment policies in accordance with the UG for the year ended December 31, 2020. CUAHSI did not complete the verification of its 2020 vendors until 2024. Based on our testing, no contractors in covered transactions were deemed to be federally debarred, suspended or excluded. Cause & Context CUAHSI has a policy in place to meet the procurement requirements but there was no evidence of compliance with that policy. Effect As a result of noncompliance, there could be possible repayment of funds, loss of reputation and possible suspension or debarment. Questioned Costs None Prior Year Audit Finding Yes, previously reported as MW2019-004. Recommendation It is recommended that CUAHSI strive to prioritize compliance. CUAHSI should ensure that, to the extent practicable, the use of a competitive procurement process in compliance with 2 CFR section 200/317. View of Responsible Official and Planned Corrective Action See accompanying Corrective Action Plan.
Finding No.: 2019-007 Federal Agency: U.S. Department of Health and Human Services CFDA Program: 93.104 Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances (SED) Award Number: 5U79SM062447-04 Area: Procurement and Suspension and Debarment Questioned Costs: $23,500 Criteria: 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. CHCC’s procurement regulations, pursuant to the Commonwealth law, state the following: • All procurement records shall be retained by the CHCC Procurement and Supply (P&S) Director for a period of seven (7) years after completion of construction, or full delivery of the goods or services under the contract. • Competitive Sealed Bidding Because of the unique nature and varied needs of all parts of the institution, the CEO and the CHCC Director of P&S shall make a determination as to the best way to publicize the Invitation to Bid (ITB). Every procurement in excess of $10,000 shall be publicized in one or more of the following ways: (a) in a newspaper of general circulation; (b) in a newspaper of local circulation in the area pertinent to the procurement; (c) in industry media; (d) through electronic mailing lists, (e) through the internet, agency web site, or other publicly accessible electronic media, (f) through electronic mailing lists, or (g) in a government publication designed for giving public notice • Competitive Sealed Proposal Adequate public notice of the request for proposals shall be given in the same manner as provided for in competitive sealed bids. Finding No.: 2019-007, continued Federal Agency: U.S. Department of Health and Human Services CFDA Program: 93.104 Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances (SED) Award Number: 5U79SM062447-04 Area: Procurement and Suspension and Debarment Questioned Costs: $23,500 Criteria, continued: • Small Purchases Bidding is not required but is encouraged for procurement over $5,000 and under $25,000, or $50,000 if it is medical equipment, supplies, or devices. The CEO, the official with expenditure authority, must obtain price quotations from at least three vendors and base the selection on competitive price and quality for procurement valued at $5,000 to $25,000 or $50,000 for medical equipment, supplies, or devices. Any price quotations obtained must be written, documented, and submitted to the CHCC P&S Director for approval. Condition: Of thirty-nine procurement samples tested, aggregating $56,383 of a total population of $220,635, the following deficiencies were noted: 1. For four (or 10%), the Invitation to Bid (ITB) or the Request For Proposal (RFP) publication notices and evaluation forms were not provided. Finding No.: 2019-007, continued Federal Agency: U.S. Department of Health and Human Services CFDA Program: 93.104 Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances (SED) Award Number: 5U79SM062447-04 Area: Procurement and Suspension and Debarment Questioned Costs: $23,500 Condition, continued: 2. For seven (or 18%), the purchase requisitions and/or contracts were not provided. No questioned costs are presented as amounts are questioned at Condition 3. 3. For eight (or 21%), approval by the Expenditure Authority and the P&S Director were not evident. Finding No.: 2019-007, continued Federal Agency: U.S. Department of Health and Human Services CFDA Program: 93.104 Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances (SED) Award Number: 5U79SM062447-04 Area: Procurement and Suspension and Debarment Questioned Costs: $23,500 Condition, continued: 4. For one (or 3%) small purchase, no evidence of effort to obtain three quotations. Cause: CHCC did not enforce compliance with established procurement policies and procedures over procurement. Effect: CHCC is in noncompliance with applicable procurement regulations and questioned costs of $23,500 result as the projected questioned costs exceed the $25,000 threshold. Identification as a Repeat Finding: Finding No. 2018-013. Recommendation: The responsible personnel should monitor and enforce compliance with applicable procurement requirements, including the review of procurement files for completeness as to written rationale for any deviation from applicable procurement requirements. Finding No.: 2019-007, continued Federal Agency: U.S. Department of Health and Human Services CFDA Program: 93.104 Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances (SED) Award Number: 5U79SM062447-04 Area: Procurement and Suspension and Debarment Questioned Costs: $23,500 Views of Responsible Officials: CHCC’s Corrective Action Plan provides a detailed rationale for disagreement with the finding described in Conditions 1 to 4. Auditor Response: Condition 1 - ITB and RFP publication notices were not provided. Condition 2 - Purchase requisitions and/or contracts were not provided. Condition 3 - Documentations evidencing approval by the Expenditure Authority and the P&S Director were not provided. Condition 4 - CHCC Corrective Action Plan stated no solicitation was obtained. In addition, documentations substantiating that the vehicle rental agreement was competitively procured during the initial year of the rental were not provided. Further, in accordance with 45 CFR Part 75.361 Retention requirements for records, financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award, must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the HHS awarding agency or pass-through entity in the case of a subrecipient. In addition, initial draft reports were provided to CHCC on 09/06/24 and 09/24/24. It was also agreed during the 09/06/24 and 10/04/24 meetings for CHCC to provide corresponding underlying accounting records to resolve the finding; however, no documentations were provided within the agreed timeline. Accordingly, finding is sustained.