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.: D24AF00340, D24AF0034, D24AF00020, D24AF00334, D24AF00022, D23AF00263, D24AF00023 D24AF00089 D22AF00329 D23AF00166 Area: Procurement and Suspension and Debarment Questioned Costs: $4,275,792 Criteria: Article VI, Section 1(h) of the Fiscal Procedures Agreement (FPA) states that the Government of the Federated States of Micronesia shall not award funds received pursuant to the 2023 Amended Compact to any party which is debarred, suspended, or otherwise excluded from and ineligible for participation in United States assistance programs. Additionally, according to 2 CFR 180.220(b)(1), a procurement transaction is considered a cover transaction if the contract amount is expected or to equal or exceed $25,000. Condition: CSG does not perform suspension and debarment monitoring for covered transactions with a total population of $4,275,792 that is in accordance with Article VI, Section 1(h) of the FPA. Cause: CSG does not have an established policy and procedure for verification of the suspension and debarment status of persons or contractors prior to entering into a covered transaction that is in accordance with Article VI, Section 1(h) of the FPA. Effect or Potential Effect: CSG is in noncompliance with applicable suspension and debarment requirements and questioned costs of $4,275,792 result. Identification as a Repeat Finding: Finding No. 2023-003. Recommendation: 1. CSG should establish a policy and implement formal procedures to document written evidence that, prior to entering into a covered transaction, an assessment has been carried out that is in accordance with Article VI, Section 1(h) of the FPA. 2. CSG could consider designing their policies and procedures for monitoring suspension and debarment status of persons or contractors under a covered transaction in accordance with the provisions of 2 CFR 180.300. Views of Responsible Officials: The State agrees with the finding. Corrective Action is currently ongoing and described in the Corrective Action Plan.