Finding 1240437 (2025-003)

Material Weakness Repeat Finding
Requirement
I
Questioned Costs
-
Year
2025
Accepted
2026-10-14
Audit: 414946
Organization: Guam Department of Education (GU)

AI Summary

  • Core Issue: GDOE failed to verify if subrecipients were excluded or disqualified before entering into contracts exceeding $25,000.
  • Impacted Requirements: Noncompliance with 2 CFR 180.300 regarding procurement and suspension and debarment verification.
  • Recommended Follow-Up: GDOE should establish procedures to verify subrecipients' eligibility before agreements and keep documentation of these checks.

Finding Text

Finding No.: 2025-003 – Procurement and Suspension and Debarment Identification of the federal program: Federal Agency: U.S. Department of Agriculture AL No. and Title: 10.555 Child Nutrition Cluster Federal Award No.: 7GU300GUB Criteria or specific requirement (including statutory, regulatory or other citation): In accordance with 2 CFR 180.300, entities that enter into covered transactions 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. According to 2 CFR 180.220(b)(1), a procurement transaction is considered a covered transaction if the contract amount is expected to equal or exceed $25,000. Condition: GDOE did not verify whether subrecipients are excluded or disqualified pursuant to the requirements of 2 CFR 180.300 prior to entering into covered transactions. Cause: GDOE did not enforce controls over compliance with the applicable requirements relative to suspension and debarment of subrecipients. Effect or Potential Effect: GDOE is in noncompliance with the applicable procurement and suspension and debarment requirements compliance requirements. Questioned Costs: $744,643. The questioned costs relate to the FY25 expenditures of procurement transactions where the required verification before entering into covered transaction was not performed. Per auditors’ verification, the subrecipients with whom GDOE transacted business with are not suspended or debarred as of September 30, 2025. Context: We identified and tested all three subawards subject to suspension and debarment compliance requirements during the year totaling $744,643. The samples were statistically valid. For all 3 (or 100%) subawards tested, the required verification before entering into covered transaction was not performed. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: GDOE Food Nutrition and Management Services (FNMS) Division should implement procedures to verify that subrecipients are not suspended, debarred, or otherwise excluded from federal assistance prior to each agreement renewal and retain documentation of the verification performed. Views of Responsible Officials: GDOE agrees with the finding and provides details in its Corrective Action Plan.

Corrective Action Plan

Finding No.: 2025-003 Federal Agency: U.S. Department of Agriculture AL Program: 10.555 Child Nutrition Cluster Federal Award No.: 7GU300GUB Area: Procurement and Suspension and Debarment Questioned Costs: $744,643 Views of Auditee and Corrective Actions GDOE acknowledges the finding. The finding concerns the lack of documented exclusion verification before GDOE entered into or renewed covered transactions although the verifications were conducted. GDOE also notes the auditors’ determination that, as of September 30, 2025, none of the entities were suspended or debarred. Plan of action and completion date: GDOE Food and Nutrition Services Management Division (FNSMD), Child Nutrition Programs (CNP) will implement an internal control procedure consistent with 2 CFR 200.214, 2 CFR Part 180, and 2 CFR Part 417. Before entering into or renewing a covered transaction, we will document one of the verification methods permitted under 2 CFR 180.300. The standard procedure will be to check the entity and its applicable principals in SAM.gov Exclusions and retain the dated search results. If GDOE utilizes another permitted method, such as obtaining a certification or including an agreement clause, the agreement file will identify the method used and retain the supporting documentation. We will maintain a register identifying the entity, program, transaction type, agreement and renewal dates, verification date, method and result. Verification will be completed and independently reviewed before execution or renewal. When applicable, GDOE FNSMD CNP will also check the CACFP National Disqualified List as a separate program-integrity control under 7 CFR part 226; the NDL check will not substitute for the federal suspension and-debarment verification. The procedure and agreement register will be implemented by October 1, 2026. The GDOE FNSMD CNP Administrator will review the register at least annually and document corrective follow-up for any missing or untimely verification. Plan to monitor and responsible officials: The GDOE FNSMD CNP Administrator, Anthony S. Monforte and Program Coordinator, Franklin J. Cruz will be responsible for corrective action implementation and ongoing monitoring.

Categories

Procurement, Suspension & Debarment Subrecipient Monitoring

Other Findings in this Audit

  • 1240438 2025-004
    Material Weakness Repeat
  • 1240439 2025-005
    Material Weakness Repeat
  • 1240440 2025-006
    Material Weakness Repeat
  • 1240441 2025-007
    Material Weakness Repeat
  • 1240442 2025-006
    Material Weakness Repeat
  • 1240443 2025-008
    Material Weakness Repeat
  • 1240444 2025-009
    Material Weakness Repeat
  • 1240445 2025-006
    Material Weakness Repeat
  • 1240446 2025-008
    Material Weakness Repeat
  • 1240447 2025-010
    Material Weakness Repeat
  • 1240448 2025-011
    Material Weakness Repeat
  • 1240449 2025-012
    Material Weakness Repeat
  • 1240450 2025-013
    Material Weakness Repeat
  • 1240451 2025-016
    Material Weakness Repeat
  • 1240452 2025-014
    Material Weakness Repeat
  • 1240453 2025-015
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
84.425 EDUCATION STABILIZATION FUND $104.55M
84.403 CONSOLIDATED GRANT TO THE OUTLYING AREAS $31.97M
10.555 NATIONAL SCHOOL LUNCH PROGRAM $18.92M
84.027 SPECIAL EDUCATION GRANTS TO STATES $17.63M
84.181 SPECIAL EDUCATION-GRANTS FOR INFANTS AND FAMILIES $1.32M
84.372 STATEWIDE LONGITUDINAL DATA SYSTEMS $829,750
10.558 CHILD AND ADULT CARE FOOD PROGRAM $729,155
10.560 STATE ADMINISTRATIVE EXPENSES FOR CHILD NUTRITION $422,772
84.371 COMPREHENSIVE LITERACY DEVELOPMENT $413,244
84.424 STUDENT SUPPORT AND ACADEMIC ENRICHMENT PROGRAM $399,417
12.U01 ARMY JROTC $383,083
93.092 AFFORDABLE CARE ACT (ACA) PERSONAL RESPONSIBILITY EDUCATION PROGRAM $318,367
12.U02 AIR FORCE JROTC $283,717
93.600 HEAD START $254,036
84.323 SPECIAL EDUCATION - STATE PERSONNEL DEVELOPMENT $224,613
15.875 ECONOMIC, SOCIAL, AND POLITICAL DEVELOPMENT OF THE TERRITORIES $164,642
12.U03 MARINE JROTC $153,980
10.541 CHILD NUTRITION-TECHNOLOGY INNOVATION GRANT $146,754
10.579 CHILD NUTRITION DISCRETIONARY GRANTS LIMITED AVAILABILITY $101,212
10.645 FARM TO SCHOOL STATE FORMULA GRANT $68,969
10.574 TEAM NUTRITION GRANTS $59,033
10.568 EMERGENCY FOOD ASSISTANCE PROGRAM (ADMINISTRATIVE COSTS) $43,322