Finding Text
Finding No. 2023-012 Federal Agency: U.S. Department of Education AL Program: 84.403 Consolidated Grants to the Outlying Areas Federal Award No.: S403A220001 Area: Procurement and Suspension and Debarment Questioned Costs: $1,019,874 Criteria: In accordance with 2 CFR Section 200.317, when conducting procurement transactions under a Federal award, a State must follow the same policies and procedures it uses for procurements with non-Federal funds. PSS Procurement Rules and Regulations states the following: 1. § 60-40-205 Competitive Sealed Bidding: • Public Notice - Adequate public notice of the invitation for bids shall be given a reasonable time prior to the date set forth for the opening of bids. Publication of notice shall be on the Public School website over a continuous period of four weeks shall be deemed to be adequate notice; and • Bid Acceptance and Bid Evaluation - Bids shall be unconditionally accepted without alteration or correction, except as authorized in the chapter. Bids shall be evaluated based on the requirements set forth in the invitation for bids, which may include criteria as necessary to reasonably permit a determination as to the acceptability of the bid for the particular purpose intended. 2. § 60-40-560 Authority to Debar or Suspend • After reasonable notice to the person involved and reasonable opportunity for the person to be heard under the Administrative Procedure Act [1 CMC §§ 9101, et seq.], the Commissioner of Education after consultation with the Public School System legal counsel, shall have authority to debar a person for cause from consideration for award of contracts; and • The debarment shall not be for a period of more than three years. The Commissioner of Education, after consultation with Public School System legal counsel, shall have authority to suspend a person from consideration for award of contracts if there is probable cause for debarment. The suspension shall not be for a period exceeding three months. 3. In accordance with 2 CFR §180.220 and §180.300, entities that enter into a covered transaction with another person at the next lower tier for a contract amount that is expected to equal or exceed $25,000, entities 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: 1. Of twenty-five expenditures tested, aggregating $846,783 of a total population of $8,192,986 in nonpayroll expenditures subject to procurement, the following were noted: a. For five (or 20%), bid evaluation forms for the unsuccessful bidders for the following contracts procured through invitation for bid, were not provided. For contract number 00181592-OC, none of the bid evaluation forms were provided, including the bid opening summary sheet. b. For two (or 8%), public announcements of the invitation for bids were not provided. No questioned costs are presented as the amounts are questioned at Condition 1a. 2. PSS does not verify whether a person or a vendor is not excluded or disqualified pursuant to 2 CFR §180.220 and §180.300, prior to entering into a covered transaction for an amount equal to or exceeds $25,000 with award funds. Cause: 1. Inadequate documentation and inadequate systematic filing of relevant documentation supporting program costs; and 2. Lack of monitoring control procedures to ensure verification as to whether a person or a vendor is not excluded or disqualified pursuant to 2 CFR §180.220 and §180.300 are performed, prior to entering into a covered transaction. Effect or potential effect: PSS is in noncompliance with applicable procurement and suspension and debarment regulations and questioned costs of $1,019,874 result for Conditions 1a and 3. Identification as Repeat Finding: Finding No. 2022-014 Recommendation: 1. Establish and maintain effective systematic filing of relevant documentation to support program costs and for easier retrieval; and 2. Establish and implement effective monitoring controls over the verification of excluded or disqualified persons or vendors pursuant to 2 CFR §180.220 and §180.300, prior to PSS entering into a covered transaction. Views of Auditee and Corrective Action Plan: PSS concurs with the finding. Refer to PSS’ Corrective Action Plan for additional information.