Finding Text
Pass-Through Entity: Federated States of Micronesia National Government
Federal Agency: U.S. Department of the Interior
AL Program: 15.875 Economic, Social, and Political Development of the Territories
Federal Award No.: Various Compact Sector Grants
Area: Procurement, Suspension and Debarment
Questioned Costs: $40,345
Criteria:
2 CFR section 180.300 requires entities, that enter into covered transactions, must verify that the person with whom they intend to do business, is not excluded or disqualified by:
a.) Checking SAM.gov Exclusions; or
b.) Collecting a certification from that person; or
c.) Adding a clause or condition to the covered transaction with that person.
Condition:
Out of 25 samples tested (100%), the State did not perform the required verification of individuals as mandated by 2 CFR section 180.300.
Cause:
There is no procedure in place for verifying the debarment, suspension, or exclusion status of entities prior to entering into covered transactions.
Effect:
The State is noncompliant with the applicable requirements. Questioned costs of $40,345 are reported as it exceeds the $25,000 threshold to report projected questioned costs.
Recommendation:
The State should establish and implement formal procedures to verify the debarment, suspension, or exclusion status of entities before entering into covered transactions. This process should include regular checks against the System for Award Management (SAM) database and other relevant resources.
Views of Responsible Officials:
Management agrees with the finding. Refer to separate Corrective Action Plan.