FAC Explorer

Finding 1216202 (2023-010)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2026-05-31
Audit: 402685
Organization: Republic of Palau (PW)
Auditor: ERNST & YOUNG (CNMI) INC

AI Summary

  • Core Issue: The Republic did not provide necessary program contracts or grant agreements for $2,110,000 in federal expenditures, risking noncompliance with federal requirements.
  • Impacted Requirements: Compliance with 2 CFR Part 200, Appendix X1, is at stake due to inadequate documentation and control over federal awards.
  • Recommended Follow-up: The Republic should submit the required agreements and improve controls for managing federal award documents to ensure compliance.

Finding Text

Criteria: In accordance with 2 CFR Part 200, Appendix X1, the Compliance Supplement, the auditor should perform reasonable procedures to identify compliance requirements that could have both a direct and material effect on the federal program selected for testing. Reasonable procedures would include a review of the federal awards for programs selected for testing i.e., major program. Condition: No program contract or grant agreement was provided to identify the terms and conditions or the applicable federal compliance requirements that are applicable to the Republic’s expenditures of $2,110,000 for the Maritime Domain Awareness Radars program for the year ended September 30, 2023. Cause: The Republic lacks effective control over the documentation of program contracts and grant agreements. Effect: The Republic is in potential noncompliance with applicable special tests and provisions requirements. No questioned costs are presented as we are aware that the program expenditures appear necessary and reasonable for the performance of the known project objectives. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: The Republic should provide the program’s contract and grant agreements to demonstrate compliance with requirements, which could have a direct and material effect on the program. The Republic’s management should establish and implement controls over obtaining and retaining federal award documents for all federal awards received by the Republic. Views of Responsible Officials: The Republic’s Corrective Action Plan indicates disagreement with the finding. The Republic’s position is set forth in the accompanying Corrective Action Plan.

Corrective Action Plan

Planned Corrective Action: Management disagrees with the finding. Under Title III of the Amended Compact of Free Association (COFA), the United States may designate defense sites in Palau, and related funding is governed exclusively by the Compact and its agreements, not by 2 CFR Part 200 federal compliance requirements. Proposed Completion Date: On-going Name and Contact of Responsible Person: Gail Rengiil Director Bureau of National Treasury Ministry of Finance Contact:680-767-2561 Email: gailr@palaugov.org

Categories

Special Tests & Provisions

Other Findings in this Audit

  • 1216203 2023-011
    Material Weakness Repeat
  • 1216204 2023-012
    Material Weakness Repeat
  • 1216205 2023-013
    Material Weakness Repeat
  • 1216206 2023-014
    Material Weakness Repeat
  • 1216207 2023-015
    Material Weakness Repeat
  • 1216208 2023-016
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
12.U00 Maritime Domain Awareness Radars $2.11M
15.875 Submarine Fibre Optic Cable $1.70M
93.323 ELC Covid Response Activities $1.32M
17.225 UNEMPLOYMENT INSURANCE $1.31M
93.898 CANCER PREVENTION AND CONTROL PROGRAMS FOR STATE, TERRITORIAL AND TRIBAL ORGANIZATIONS $1.16M
84.027 Special Education Grants to States $1.08M
20.106 AIRPORT IMPROVEMENT PROGRAM, INFRASTRUCTURE INVESTMENT AND JOBS ACT PROGRAMS, AND COVID-19 AIRPORTS PROGRAMS $1.01M
15.875 S432 (2A) Infrastructure Maintenance Fund $929,583
93.224 HEALTH CENTER PROGRAM (COMMUNITY HEALTH CENTERS, MIGRANT HEALTH CENTERS, HEALTH CARE FOR THE HOMELESS, AND PUBLIC HOUSING PRIMARY CARE) $729,214
84.256B Education Grant Program for the Freely Associated States $657,965
93.116 PROJECT GRANTS AND COOPERATIVE AGREEMENTS FOR TUBERCULOSIS CONTROL PROGRAMS $416,174
93.243 SUBSTANCE ABUSE AND MENTAL HEALTH SERVICES PROJECTS OF REGIONAL AND NATIONAL SIGNIFICANCE $404,077
93.377 PREVENTION AND CONTROL OF CHRONIC DISEASE AND ASSOCIATED RISK FACTORS IN THE U.S. AFFILIATED PACIFIC ISLANDS, U.S. VIRGIN ISLANDS, AND P. R. $357,046
93.069 Public Health Emergency Preparedness $341,774
93.323 EPIDEMIOLOGY AND LABORATORY CAPACITY FOR INFECTIOUS DISEASES (ELC) $337,010
93.391 ACTIVITIES TO SUPPORT STATE, TRIBAL, LOCAL AND TERRITORIAL (STLT) HEALTH DEPARTMENT RESPONSE TO PUBLIC HEALTH OR HEALTHCARE CRISES $335,490
15.875 Single Audit FY2020 $329,450
93.011 Material and Child Health Federal Consolidated Programs $265,040
15.875 S432 (5) Infrastructure Grants $260,742
15.875 Community Health Assesment $236,163
93.251 Universal Newborn Hearing Screening $231,132
93.217 FAMILY PLANNING SERVICES $220,764
93.889 NATIONAL BIOTERRORISM HOSPITAL PREPAREDNESS PROGRAM $207,665
93.495 COMMUNITY HEALTH WORKERS FOR PUBLIC HEALTH RESPONSE AND RESILIENT $194,179
15.904 HISTORIC PRESERVATION FUND GRANTS-IN-AID $188,036
93.994 MATERNAL AND CHILD HEALTH SERVICES BLOCK GRANT TO THE STATES $175,828
15.875 FY2021 Single Audit D22AF00085-00 $151,900
84.048 Career and Technical Education-Basic Grants to States $144,051
15.875 MOF - School and Hospital Repair $140,625
93.127 EMERGENCY MEDICAL SERVICES FOR CHILDREN $135,468
93.788 State Targeted Response to the Opioid Crisis Grants $133,261
93.092 Affordable Care Act (ACA) Personal Responsibility Education Program $129,017
93.527 GRANTS FOR NEW AND EXPANDED SERVICES UNDER THE HEALTH CENTER PROGRAM $120,373
93.354 PUBLIC HEALTH EMERGENCY RESPONSE: COOPERATIVE AGREEMENT FOR EMERGENCY RESPONSE: PUBLIC HEALTH CRISIS RESPONSE $117,135
93.967 CENTERS FOR DISEASE CONTROL AND PREVENTION COLLABORATION WITH ACADEMIA TO STRENGTHEN PUBLIC HEALTH $115,562
15.875 Building a Healthier Palau $112,957
10.664 COOPERATIVE FORESTRY ASSISTANCE $107,765
15.875 Household Income & Expense Survey $102,718
93.959 BLOCK GRANTS FOR PREVENTION AND TREATMENT OF SUBSTANCE ABUSE $96,222
93.268 IMMUNIZATION COOPERATIVE AGREEMENTS $92,669
93.421 STRENGTHENING PUBLIC HEALTH SYSTEMS AND SERVICES THROUGH NATIONAL PARTNERSHIPS TO IMPROVE AND PROTECT THE NATION’S HEALTH $88,445
15.875 Cares Act OIA Grant $74,503
45.031 IMLS LSTA Cares Act State Grants $72,986
11.427 FISHERIES DEVELOPMENT AND UTILIZATION RESEARCH AND DEVELOPMENT GRANTS AND COOPERATIVE AGREEMENTS PROGRAM $72,444
45.031 IMLS LSTA State Grants $68,125
93.958 BLOCK GRANTS FOR COMMUNITY MENTAL HEALTH SERVICES $38,124
93.991 PREVENTIVE HEALTH AND HEALTH SERVICES BLOCK GRANT $31,829
93.738 PPHF: RACIAL AND ETHNIC APPROACHES TO COMMUNITY HEALTH PROGRAM FINANCED SOLELY BY PUBLIC PREVENTION AND HEALTH FUNDS $30,112
84.002A Adult Education and Family Literacy Act State Grant $30,085
17.285 REGISTERED APPRENTICESHIP $28,838
93.261 SCALING THE NATIONAL DIABETES PREVENTION PROGRAM TO PRIORITY POPULATIONS $21,552
10.766 COMMUNITY FACILITIES LOANS AND GRANTS $18,259
93.917 HIV CARE FORMULA GRANTS $18,151
15.875 Palau 2020 Census $18,002
11.307 ECONOMIC ADJUSTMENT ASSISTANCE $14,075
15.875 Southern Water Project FY20-21 $11,404
93.283 CENTERS FOR DISEASE CONTROL AND PREVENTION INVESTIGATIONS AND TECHNICAL ASSISTANCE $6,961
17.259 WIOA YOUTH ACTIVITIES $6,778
93.809 NATIONAL ORGANIZATIONS FOR CHRONIC DISEASE PREVENTION AND HEALTH PROMOTION $1,873
17.258 WIOA ADULT PROGRAM $1,195
10.707 RESEARCH JOINT VENTURE AND COST REIMBURSABLE AGREEMENTS $1,020
17.278 WIOA DISLOCATED WORKER FORMULA GRANTS $684
15.875 Environmental Regulations Review $492