Finding 1216204 (2023-012)

Criteria: 1. In accordance with 2 CFR § 200.319(a), all procurement transactions under a Federal award must be conducted in a manner that provides full and open competition. Further, 2 CFR § 200.320(a)(1)(i) requires that, to the extent practicable, micro‑purchases be distributed equitably among qualified suppliers. 2. 2 CFR § 200.214 subjects non‑Federal entities to the non-procurement suspension and debarment regulations in 2 CFR part 180, which restrict awards, subawards, and contracts with parties that are debarred, suspended, or otherwise excluded from Federal awards. Under 2 CFR § 180.300, before entering into a covered transaction with another person or entity at the next lower tier, the non Federal entity must verify that the party is not excluded or disqualified. This verification may be completed by reviewing the SAM.gov Exclusions, obtaining a certification from the entity, or including an appropriate suspension and debarment clause or condition in the contract or agreement. Further, in accordance with 2 CFR § 200.318(i), non‑federal entities must maintain records sufficient to document the history of procurement transactions, and 2 CFR § 200.334 requires retention of all supporting documentation for Federal awards. Together, these regulations require that documentation of the suspension and debarment verification be retained to demonstrate compliance with Federal procurement and suspension and debarment requirements. Condition: 1. The Republic’s procurement regulation § 625(c)(3) permits purchases under $2,500 after obtaining one written price quotation. However, the policy does not demonstrate full and open competition to ensure that to the extent practicable, small purchases are distributed equitably among qualified suppliers. Of the 143 procurement transactions, 46 were identified as within the threshold established under § 625(c)(3). No. No. of transactions GL Account Name Amount 1 19 Machinery & Equip Repair $ 6,103 2 24 General Supplies 17,106 3 1 Professional 425 4 1 Advertising 500 5 1 Conference 504 Total: 46 $ 24,638 2. The Republic represents that vendors are verified in SAM.gov before entering into covered transactions; however, no documentation was retained to demonstrate that the required verification occurred. Documentation such as screenshots, printouts, approval records, or other system‑based evidence showing that the SAM.gov check was performed was not available in the procurement or vendor files. Of the 38 purchase orders issued during the year ended September 30, 2023, 2 were identified as covered transactions subject to federal suspension and debarment requirements, totaling $92,149. No. Purchase Order # Vendor Amount 1 22305991 EDHANNAH EDUCATION CONSULTING SERVICES $ 21,000 2 22300871 GUAM CEDDERS 71,149 Total: $ 92,149 Auditor verification of the above vendors in SAM.gov did not identify any as suspended or debarred. However, the absence of documentation prevents the Republic from demonstrating compliance with Federal suspension and debarment requirements. Cause: The Republic’s procurement policy does not ensure full and open competition for small purchases due to lack of required procedures to equitably distribute micro‑purchases among qualified suppliers. Additionally, the Republic’s procurement procedures do not require the retention of documentation evidencing that suspension and debarment checks were performed. Effect: The Republic is not in compliance with Federal procurement, suspension and debarment requirements. Without federally compliant procedures and supporting documentation, the extent of questioned costs cannot be determined, resulting in an undeterminable question cost. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Republic update its procurement policies and procedures to include specific guidance to ensure full and open competition to equitably distribute small purchases among available qualified suppliers. Management should ensure that documentation supporting the basis for supplier selection is consistently maintained in procurement files. Additionally, we recommend that the Republic strengthen its procurement and vendor‑approval procedures to require retention of evidence demonstrating that suspension and debarment verification was performed for each covered transaction. Acceptable documentation may include date‑stamped screenshots of the SAM.gov search, system‑generated verification logs, or signed certifications. Documentation should be consistently retained in the procurement or vendor file to support compliance with Federal requirements. Views of Responsible Officials: The Republic’s Corrective Action Plan does not indicate disagreement and provides planned corrective action.