Finding No.: 2023-017 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases Federal Award No.: NU50CK000558 Questioned Costs: $6,500 Area: Procurement and Suspension and Debarment Criteria: Section 200.317 of 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards states that, when procuring property and services under a Federal award, a state must follow the same policies and procedures it uses for procurements from its non-Federal funds. RepMar’s Procurement Code states the following: (a) Section 124 - unless otherwise authorized by law, all Government contracts shall be awarded by competitive sealed bidding. (b) Section 125 – (1) contracts shall be awarded by competitive sealed bidding. (2) An invitation for bids shall be issued and shall include a purchase description and all contractual terms and conditions applicable to the procurement. (3) adequate public notice of the invitation for bids shall be given a reasonable time. (4) Bids shall be opened publicly in the presence of one or more witnesses at the time and place designated in the invitation for bid. (5) Bids shall be unconditionally accepted without alteration or correction. (c) Section 127 - procurement of goods and services not exceeding $25,000 may be made in accordance with small purchase procedures promulgated by RepMar’s Policy Office. Small purchase procedures are those relatively simple and informal methods for securing services, supplies, or other property that do not cost more than $25,000. RepMar’s Ministry of Finance, Banking and Postal Services has previously declared that if small purchase procedures are used, price or rate quotations shall be obtained from three qualified sources. (d) Section 128 - a contract may be awarded for a supply, service, or construction item without competition when it is determined in writing that there is only one source for the required supply, service, or construction item. The RMI Procurement Regulations Pursuant to the Procurement Code Act 1988 (RMI Procurement Regulations) Sections 5 and 6 stipulate procedures pertaining to suspension or debarment of persons who shall not be considered for award of contracts. 2 CFR 200.214 states that recipients and subrecipients are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, as well as 2 CFR part 180. The regulations in 2 CFR part 180 restrict making Federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. 2 CFR 180.300 states that when an entity enters into a covered transaction with another person at the next lower tier, the entity must verify that the person with whom the entity intends to do business is not excluded or disqualified by doing the following: (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. Furthermore, 2 CFR 200.303(a) states that a recipient of a Federal award must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the 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 1: For 1 (or 6%) of 17 procurement transactions tested, aggregating $89,724 of $1,985,592 in total transactions subject to procurement requirements, no procurement file was provided to substantiate vendor selection. Item # Reference # Expenditure Amount Questioned Cost 1 22/00001586 $ 4,000 $ 4,000 Condition 2: For 1 (or 6%) of 17 procurement transactions tested, aggregating $89,724 of $1,985,592 in total transactions, supporting procurement documentation was not sufficient to substantiate compliance with applicable procurement requirements as follows: Item # Reference # Expenditure Amount Questioned Cost 1 22/00002281 $ 2,500 $ 2,500 Condition 3: Documented evidence of compliance with RMI Procurement Regulations and 2 CFR 200.214 and 2 CFR 180.300 regarding debarred, suspended, or otherwise excluded persons or entities was not made available. Cause: RepMar did not enforce adequate internal control policies and procedures over documentation of the procurement process to satisfy compliance with applicable procurement requirements. Further, RepMar lacks policies and procedures requiring verification of the status of an entity with which RepMar intends to enter into a covered transaction. Effect: RepMar is in noncompliance with applicable procurement requirements. Accordingly, questioned costs of $6,500 result because the projected questioned cost amount exceeds the $25,000 threshold. Identification as a Repeat Finding: Finding No. 2022-008 Recommendation: Responsible personnel should require that documentation be adequate to comply with applicable procurement requirements and regulations. Specifically, documentation should indicate the history of procurement, including the rationale for contractor or vendor selection, and verification of whether an entity or person with whom RepMar intends to do business is not excluded or disqualified. Views of Responsible Officials: RepMar’s Corrective Action Plan does not indicate disagreement and provides planned corrective action.