Finding Text
Finding No. 2023-019 Federal Agency: U.S. Department of Education AL Program: 93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance Award No.: 6H79SM083644 Area: Procurement and Suspension and Debarment Questioned Costs: $307,881 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. 60-40-225 Competitive Sealed Proposals: • Condition for Use - When the Commissioner of Education determines in writing upon the advise of the legal counsel that the use of a competitive sealed bidding is either not practical or not advantageous to the Public School System, a contract may be entered into by competitive sealed proposals; 3. § 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 4. 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 twelve procurement transactions tested, aggregating $217,154 of a total population of $546,111 of nonpayroll expenditures subject to procurement, the following were noted: a. For one (or 8%), PSS did not provide bid or proposal evaluations for all responsive bidders. b. For one (or 8%), CNMI PSS did not provide evidence of the Chief Procurement Officer’s determination in writing for a shorter period of bidding time for the related contract. c. For one (or 8%), PSS did not provide written summaries of the bid opening and proposals submitted. No questioned costs are presented as they were cited at Condition 1a. d. For one (or 8%), PSS did not provide documentation evidencing the public announcement of the Request for Proposal. No questioned costs are presented as they were cited at Condition 1a. e. For one (or 8%), the contract was procured through a competitive sealed proposal; however, the written determination by the Commissioner of Education upon the advice of legal counsel that a competitive sealed bidding is either not practical or not advantageous, was not provided. No questioned costs are presented as the amount is questioned at Condition 1a. 2. PSS does not verify whether a person or a vendor is excluded or disqualified pursuant to the requirements of 2 CFR 180.300 prior to entering into the following covered transactions that exceeded the $25,000 threshold. Cause: PSS did not consistently comply with its Procurement Regulations and applicable federal requirements due to inadequate internal controls and enforcement mechanisms. Further, PSS’s existing Suspension and Debarment procedures require action only upon approval of the Commissioner of Education, which is not aligned with the verification requirements of 2 CFR §180.300. The absence of standardized procedures, accountability measures, and routine compliance monitoring contributed to these deficiencies. Effect or potential effect: PSS is in noncompliance with applicable procurement regulations and questioned costs of $307,881 result. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: 1. Enforce uniform procurement procedures that require complete documentation of all competitive sealed bidding steps, including public notices, bid openings, bid evaluations, and contract awards. 2. Establish and implement written policies and procedures to verify the suspension and debarment status of all vendors involved in covered transactions prior to contract award, in accordance with 2 CFR §180.300. 3. Require staff training and supervisory review to ensure procurement requirements are consistently followed and adequately documented. 4. Implement ongoing monitoring and internal review processes to ensure continued compliance and to prevent recurrence of similar deficiencies. Views of Auditee and Corrective Action Plan: PSS concurs with the findings and recommendations. Refer to PSS’ Corrective Action Plan for additional information.