Finding Text
Finding 2024-003 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior Assistance Listing: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D24AF00341 Area: Procurement, Suspension, and Debarment Questioned Costs: $8,368 Criteria: Article VI, section 1(m)(i) of the FSM-U.S. Fiscal Procedures Agreement permits subrecipients of the Federated States of Micronesia National Government to use their own procurement procedures when those procedures are consistent with the Agreement. Sections 7.1.1(3)(b) and 7.2.5(1)(d) of the State's procurement regulations require three competitive quotations for applicable repair and maintenance purchases unless an approved waiver is documented. Any waiver must be documented, approved, and submitted to the State Treasury for inclusion in the procurement file. 2 CFR 200.318 requires documentation sufficient to detail the history of each procurement transaction, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and basis for contract price. 2 CFR 200.319 requires all procurement transactions under a federal award to be conducted in a manner providing full and open competition. 2 CFR 200.320 permits small purchases without soliciting competitive quotations if the price is deemed reasonable based on research, experience, or purchase history, provided supporting documentation is maintained. Condition: For 1 (2%) of 65 transactions tested, from a sample totaling $1,303,256 and a population totaling $24,317,028, the State did not document compliance with applicable procurement regulations. For test item 51, obligation 391218, the State did not solicit or document competitive quotations and did not provide an approved waiver or other documentation supporting the procurement method. The related contract expenditures recorded in fiscal year 2024 totaled $8,368. Retainage of $930 paid on October 31, 2024 was outside the fiscal year and is not included in known questioned costs.