FAC Explorer

Finding 484843 (2021-013)

Significant Deficiency Repeat Finding
Requirement
I
Questioned Costs
$1
Year
2021
Accepted
2024-08-22
Audit: 317760
Organization: Commonwealth of the Northern Mariana Islands (MP)
Auditor: Ernst & Young (cnmi) INC

AI Summary

  • Core Issue: CNMI did not follow proper procurement procedures, leading to questioned costs of $97,850.
  • Impacted Requirements: Noncompliance with 2 CFR procurement standards and CNMI regulations regarding bid documentation and vendor solicitation.
  • Recommended Follow-up: Implement a system to ensure compliance with procurement regulations and maintain complete records for all procurement activities.

Finding Text

Finding No. 2021-013 Federal Agency: U.S. Department of Agriculture AL Program: 10.539 CNMI Nutrition Assistance Federal Award No.: 7NM4004NM Area: Procurement and Suspension and Debarment Questioned Costs: $97,850 Criteria: Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. CNMI’s procurement regulations state the following: • All government procurement shall be awarded by competitive sealed bidding except under certain circumstances permitting other than full and open competition. • Bidding is not required but is encouraged for procurement of $2,500 and under $10,000. The individual with the expenditure authority must obtain price quotations from at least three vendors and should base the selection on competitive price and quality for procurement valued at $2,500 to $10,000. Any price quotations must be written, documented, and submitted to the Procurement and Supply (P&S) Director for approval. • For purchases that exceed $10,000 but which are less than or equal to $50,000, a minimum of three vendors shall be solicited to submit written or electronic quotations. If there are fewer than three vendors, the expenditure authority shall certify, in writing, to the P&S Director that fewer than three vendors responded and shall provide written proof of the request. • Based on Procurement Regulation 70-30.3-115(a), Contract Review, Processing, and Oversight, all contracts must first be prepared by the official with expenditure authority who shall certify that he has complied with the procurement regulations codified in this subchapter, and that the proposed contract is for a public purpose that does not constitute a waste or abuse of public funds. All contract documents are to be complete, including attachments and exhibits, if they are incorporated into the contract by reference. Condition: Of fifty nonpayroll expenditures tested, aggregating $401,852 of a total population of $756,436 in nonpayroll expenditures subject to procurement, the following were noted: 1. For one (or 2%), the bid summary was not on file (document no. 1624129, dated 02/24/21, amounting to $35,990). Therefore, the CNMI was not able to substantiate the number of bids received and whether the procurement process for competitive sealed bids were properly followed, for which the amount is questioned. Finding No. 2021-013, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.539 CNMI Nutrition Assistance Federal Award No.: 7NM4004NM Area: Procurement and Suspension and Debarment Questioned Costs: $97,850 Condition, continued: 2. For one (or 2%), the Bid Opening Summary report was not provided (document no. 1562306, dated 10/09/2020, amounting to $33,060) and no other documentations on file to substantiate that the selection was based on the lowest bidder. 3. For two (or 4%), expenditures were procured through sole source procurement methods. The written justification states that the CNMI NAP obtained quotations from two vendors. However, no documentation was provided to demonstrate efforts were made to contact and solicit from other vendors. Cause: CNMI did not enforce compliance with established regulations over procurement. Effect: CNMI is in noncompliance with applicable procurement regulations and questioned costs of $97,850 result. Identification as a Repeat Finding: Finding No. 2020-026   Finding No. 2021-013, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.539 CNMI Nutrition Assistance Federal Award No.: 7NM4004NM Area: Procurement and Suspension and Debarment Questioned Costs: $97,850 Recommendation: Responsible personnel should monitor and enforce compliance with applicable procurement requirements, including the review of procurement files for completeness as to written rationale for deviations from applicable procurement requirements. Further, responsible personnel should establish a recordkeeping system whereby underlying support is filed accordingly to substantiate compliance. Views of responsible officials: Condition 1 – The CNMI-NAP disagrees with the finding. This transaction was supposed to be processed in FY 2020 but because of the delay and completion date was done in FY 2021, a Change Order Contract No. 01 was processed, and the funds was carried over to FY 2021. The bid summary was not necessary because a change order was processed changing the account from A0551E to A1551L per NAP email dated 1/11/21 (Pending Change Order Contract) - CNC 01/13/21 Change Order #1 to charge $35,989.60 (Contract #707410-OC) to A1551L.64560 to extend the delivery period from thirty (30) days to ninety (90) days. Condition 2 – CNMI NAP disagrees with the finding. The Nutrition Assistance Program did follow the proper procurement method by processing Invitation to Bid and obtained the lowest bidder and processed the contract with a notice to proceed. Condition 3 – CNMI NAP disagrees with this finding. The CNMI NAP tried to obtain quotations to purchase perforator machines on island and there was none. However, the selected vendor submitted their price quotation stating that they are able to obtain the perforator machines from off-island and CNMI NAP can purchase from them. Finding No. 2021-013, continued Federal Agency: U.S. Department of Agriculture AL Program: 10.539 CNMI Nutrition Assistance Federal Award No.: 7NM4004NM Area: Procurement and Suspension and Debarment Questioned Costs: $97,850 Auditor Response: Condition 1 – Although there was a change order from the original contract, all procurement records shall be retained for a period of five years after the completion of construction or full delivery of goods or services under a contract as per Section 70-30.3-285 of the Procurement Regulations. Condition 2 – Documentation substantiating that the selection was based on the lowest bidder was not provided. Condition 3 – Documentation demonstrating efforts were made to contact and solicit from other vendors was not provided.

Corrective Action Plan

Finding No.: 2021-013 AL Program: 10.539 - CNMI Nutrition Assistance Area: Procurement and Suspension and Debarment Questioned Costs: $97,850 Contact Person(s): Margaret Aldan, NAP Administrator Corrective Action Plan: Condition 1: The CNMI-NAP disagrees with the finding. This transaction was supposed to be process in FY 2020 but because of the delay and completion date was done in FY 2021, a Change Order Contract No. 01 was processed, and the funds was carried over to FY 2021 (see attached copies of original contract and the change order. The Account number A1551L is a carryover account number from FY 2020 to FY 2021. Copy of the bid is also attached. The bid summary was not necessary because a change order was processed changing the account from A0551E to A1551L per NAP email dated 1/11/21 (Pending Change Order Contract) - CNC 01/13/21 Change Order #1 to charge $35,989.60 (Contract #707410-OC) to A1551L.64560 to extend the delivery period from thirty (30) days to ninety (90) days. (Researched in JDE and found the remarks made by Ms. Cozy N. Camacho - Financial Management) Condition 2: The CNMI-NAP disagrees with the finding. The Nutrition Assistance Program did follow the proper procurement method by processing Invitation to Bid and obtained the lowest bidder and processed the contract with a notice to proceed, please see attached copy of the Contract and the Summary of the bidders to prove that it went through the proper procurement process. Condition 3: The CNMI-NAP disagrees with the finding. The Nutrition Assistance Program tried to obtain quotations to purchase perforator machines on island and there was none. However, ARMATECH company submitted their price quotation stating that they are able to from off-island and NAP can purchase from them. Proposed Completion Date: Ongoing

Categories

Questioned Costs Procurement, Suspension & Debarment

Other Findings in this Audit

  • 484842 2021-012
    Significant Deficiency
  • 484844 2021-014
    Material Weakness
  • 484845 2021-012
    Significant Deficiency
  • 484846 2021-013
    Significant Deficiency Repeat
  • 484847 2021-014
    -
  • 484848 2021-015
    Material Weakness
  • 484849 2021-016
    Material Weakness
  • 484850 2021-014
    Material Weakness
  • 484851 2021-016
    Material Weakness
  • 484852 2021-014
    Material Weakness
  • 484853 2021-017
    Material Weakness
  • 484854 2021-018
    Material Weakness Repeat
  • 484855 2021-019
    Significant Deficiency
  • 484856 2021-020
    Material Weakness Repeat
  • 484857 2021-021
    Significant Deficiency
  • 484858 2021-022
    Material Weakness Repeat
  • 484859 2021-023
    Material Weakness Repeat
  • 484860 2021-017
    Material Weakness
  • 484861 2021-018
    Material Weakness Repeat
  • 484862 2021-019
    Significant Deficiency
  • 484863 2021-020
    Material Weakness Repeat
  • 484864 2021-021
    Significant Deficiency
  • 484865 2021-022
    Material Weakness Repeat
  • 484866 2021-023
    Material Weakness Repeat
  • 484867 2021-017
    Material Weakness
  • 484868 2021-018
    Material Weakness Repeat
  • 484869 2021-019
    Significant Deficiency
  • 484870 2021-020
    Material Weakness Repeat
  • 484871 2021-021
    Significant Deficiency
  • 484872 2021-022
    Material Weakness Repeat
  • 484873 2021-023
    Material Weakness Repeat
  • 484874 2021-017
    Material Weakness
  • 484875 2021-018
    Material Weakness Repeat
  • 484876 2021-019
    Significant Deficiency
  • 484877 2021-020
    Material Weakness Repeat
  • 484878 2021-021
    Significant Deficiency
  • 484879 2021-022
    Material Weakness Repeat
  • 484880 2021-023
    Material Weakness Repeat
  • 484881 2021-017
    Material Weakness
  • 484882 2021-018
    Material Weakness Repeat
  • 484883 2021-019
    Significant Deficiency
  • 484884 2021-020
    Material Weakness Repeat
  • 484885 2021-021
    Significant Deficiency
  • 484886 2021-022
    Material Weakness Repeat
  • 484887 2021-023
    Material Weakness Repeat
  • 484888 2021-024
    Material Weakness Repeat
  • 484889 2021-025
    Significant Deficiency Repeat
  • 484890 2021-024
    Material Weakness Repeat
  • 484891 2021-025
    Significant Deficiency Repeat
  • 484892 2021-026
    Material Weakness Repeat
  • 484893 2021-027
    Significant Deficiency Repeat
  • 484894 2021-028
    Material Weakness
  • 484895 2021-029
    Significant Deficiency
  • 484896 2021-030
    Significant Deficiency
  • 484897 2021-031
    Material Weakness
  • 484898 2021-032
    Material Weakness
  • 484899 2021-033
    Material Weakness
  • 484900 2021-034
    Significant Deficiency Repeat
  • 484901 2021-035
    Material Weakness Repeat
  • 484902 2021-034
    Significant Deficiency Repeat
  • 484903 2021-035
    Material Weakness Repeat
  • 484904 2021-034
    Significant Deficiency Repeat
  • 484905 2021-035
    Material Weakness Repeat
  • 484906 2021-036
    Material Weakness Repeat
  • 484907 2021-037
    Material Weakness
  • 484908 2021-038
    Material Weakness
  • 484909 2021-039
    Significant Deficiency
  • 484910 2021-038
    Material Weakness
  • 484911 2021-039
    Significant Deficiency
  • 484912 2021-040
    Material Weakness
  • 484913 2021-041
    Material Weakness
  • 484914 2021-042
    Material Weakness
  • 1061284 2021-012
    Significant Deficiency
  • 1061285 2021-013
    Significant Deficiency Repeat
  • 1061286 2021-014
    Material Weakness
  • 1061287 2021-012
    Significant Deficiency
  • 1061288 2021-013
    Significant Deficiency Repeat
  • 1061289 2021-014
    -
  • 1061290 2021-015
    Material Weakness
  • 1061291 2021-016
    Material Weakness
  • 1061292 2021-014
    Material Weakness
  • 1061293 2021-016
    Material Weakness
  • 1061294 2021-014
    Material Weakness
  • 1061295 2021-017
    Material Weakness
  • 1061296 2021-018
    Material Weakness Repeat
  • 1061297 2021-019
    Significant Deficiency
  • 1061298 2021-020
    Material Weakness Repeat
  • 1061299 2021-021
    Significant Deficiency
  • 1061300 2021-022
    Material Weakness Repeat
  • 1061301 2021-023
    Material Weakness Repeat
  • 1061302 2021-017
    Material Weakness
  • 1061303 2021-018
    Material Weakness Repeat
  • 1061304 2021-019
    Significant Deficiency
  • 1061305 2021-020
    Material Weakness Repeat
  • 1061306 2021-021
    Significant Deficiency
  • 1061307 2021-022
    Material Weakness Repeat
  • 1061308 2021-023
    Material Weakness Repeat
  • 1061309 2021-017
    Material Weakness
  • 1061310 2021-018
    Material Weakness Repeat
  • 1061311 2021-019
    Significant Deficiency
  • 1061312 2021-020
    Material Weakness Repeat
  • 1061313 2021-021
    Significant Deficiency
  • 1061314 2021-022
    Material Weakness Repeat
  • 1061315 2021-023
    Material Weakness Repeat
  • 1061316 2021-017
    Material Weakness
  • 1061317 2021-018
    Material Weakness Repeat
  • 1061318 2021-019
    Significant Deficiency
  • 1061319 2021-020
    Material Weakness Repeat
  • 1061320 2021-021
    Significant Deficiency
  • 1061321 2021-022
    Material Weakness Repeat
  • 1061322 2021-023
    Material Weakness Repeat
  • 1061323 2021-017
    Material Weakness
  • 1061324 2021-018
    Material Weakness Repeat
  • 1061325 2021-019
    Significant Deficiency
  • 1061326 2021-020
    Material Weakness Repeat
  • 1061327 2021-021
    Significant Deficiency
  • 1061328 2021-022
    Material Weakness Repeat
  • 1061329 2021-023
    Material Weakness Repeat
  • 1061330 2021-024
    Material Weakness Repeat
  • 1061331 2021-025
    Significant Deficiency Repeat
  • 1061332 2021-024
    Material Weakness Repeat
  • 1061333 2021-025
    Significant Deficiency Repeat
  • 1061334 2021-026
    Material Weakness Repeat
  • 1061335 2021-027
    Significant Deficiency Repeat
  • 1061336 2021-028
    Material Weakness
  • 1061337 2021-029
    Significant Deficiency
  • 1061338 2021-030
    Significant Deficiency
  • 1061339 2021-031
    Material Weakness
  • 1061340 2021-032
    Material Weakness
  • 1061341 2021-033
    Material Weakness
  • 1061342 2021-034
    Significant Deficiency Repeat
  • 1061343 2021-035
    Material Weakness Repeat
  • 1061344 2021-034
    Significant Deficiency Repeat
  • 1061345 2021-035
    Material Weakness Repeat
  • 1061346 2021-034
    Significant Deficiency Repeat
  • 1061347 2021-035
    Material Weakness Repeat
  • 1061348 2021-036
    Material Weakness Repeat
  • 1061349 2021-037
    Material Weakness
  • 1061350 2021-038
    Material Weakness
  • 1061351 2021-039
    Significant Deficiency
  • 1061352 2021-038
    Material Weakness
  • 1061353 2021-039
    Significant Deficiency
  • 1061354 2021-040
    Material Weakness
  • 1061355 2021-041
    Material Weakness
  • 1061356 2021-042
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
17.225 Unemployment Insurance $128.26M
97.030 Community Disaster Loans $93.73M
21.027 Coronavirus State and Local Fiscal Recovery Funds $67.34M
93.778 Medical Assistance Program $65.25M
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $30.43M
21.019 Coronavirus Relief Fund $25.07M
10.539 Cnmi Nutrition Assistance $14.00M
93.767 Children's Health Insurance Program $10.91M
97.050 Presidential Declared Disaster Assistance to Individuals and Households - Other Needs $5.46M
10.542 Pandemic Ebt Food Benefits $5.14M
93.575 Child Care and Development Block Grant $4.48M
21.023 Emergency Rental Assistance Program $4.15M
15.875 Economic, Social, and Political Development of the Territories $3.86M
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program $3.31M
97.039 Hazard Mitigation Grant $2.64M
66.600 Environmental Protection Consolidated Grants for the Insular Areas - Program Support $2.39M
12.617 Economic Adjustment Assistance for State Governments $2.38M
20.205 Highway Planning and Construction $1.98M
93.434 Every Student Succeeds Act/preschool Development Grants $1.79M
97.U00 Usdhs Unknown $1.72M
64.203 State Cemetery Grants $1.67M
93.596 Child Care Mandatory and Matching Funds of the Child Care and Development Fund $1.51M
20.509 Formula Grants for Rural Areas and Tribal Transit Program $1.40M
11.419 Coastal Zone Management Administration Awards $1.35M
15.605 Sport Fish Restoration Program $1.33M
11.016 Statistical, Research, and Methodology Assistance $1.24M
17.277 Workforce Investment Act (wia) National Emergency Grants $1.11M
84.126 Rehabilitation Services_vocational Rehabilitation Grants to States $1.06M
15.611 Wildlife Restoration and Basic Hunter Education $927,077
97.012 Boating Safety Financial Assistance $792,755
90.404 2018 Hava Election Security Grants $768,969
20.500 Federal Transit_capital Investment Grants $710,984
20.600 State and Community Highway Safety $689,234
16.034 Coronavirus Emergency Supplemental Funding Program $682,825
16.588 Violence Against Women Formula Grants $588,272
97.067 Homeland Security Grant Program $557,543
20.526 Buses and Bus Facilities Formula, Competitive, and Low Or No Emissions Programs $472,931
93.045 Special Programs for the Aging_title Iii, Part C_nutrition Services $435,053
15.615 Cooperative Endangered Species Conservation Fund $428,349
93.568 Low-Income Home Energy Assistance $411,238
93.630 Developmental Disabilities Basic Support and Advocacy Grants $330,830
93.489 Child Care Disaster Relief (a) $323,887
81.041 State Energy Program $306,658
11.482 Coral Reef Conservation Program $297,572
66.801 Hazardous Waste Management State Program Support $271,746
20.218 National Motor Carrier Safety $271,490
17.235 Senior Community Service Employment Program $264,350
93.048 Special Programs for the Aging_title Iv_and Title Ii_discretionary Projects $257,565
17.504 Consultation Agreements $251,520
10.649 Pandemic Ebt Administrative Costs $239,859
81.042 Weatherization Assistance for Low-Income Persons $237,586
93.556 Promoting Safe and Stable Families $237,486
17.259 Wia Youth Activities $220,884
93.590 Community-Based Child Abuse Prevention Grants $186,057
12.002 Procurement Technical Assistance for Business Firms $184,985
93.569 Community Services Block Grant $174,616
17.258 Wia Adult Program $164,131
15.904 Historic Preservation Fund Grants-in-Aid $163,122
15.634 State Wildlife Grants $162,939
16.710 Public Safety Partnership and Community Policing Grants $158,140
10.664 Cooperative Forestry Assistance $143,503
16.738 Edward Byrne Memorial Justice Assistance Grant Program $142,873
16.750 Support for Adam Walsh Act Implementation Grant Program $138,057
45.310 Grants to States $120,692
93.052 National Family Caregiver Support, Title Iii, Part E $120,096
17.278 Wia Dislocated Worker Formula Grants $115,236
11.472 Unallied Science Program $111,511
93.464 Acl Assistive Technology $110,282
10.766 Community Facilities Loans and Grants $104,997
11.437 Pacific Fisheries Data Program $95,986
11.307 Economic Adjustment Assistance $94,707
15.663 Nfwf-Usfws Conservation Partnership $86,002
59.061 State Trade and Export Promotion Pilot Grant Program $79,669
10.170 Specialty Crop Block Grant Program - Farm Bill $78,903
10.551 Supplemental Nutrition Assistance Program $75,637
17.285 Apprenticeship USA Grants $71,713
11.549 State and Local Implementation Grant Program $65,103
66.040 State Clean Diesel Grant Program $64,655
11.467 Meteorologic and Hydrologic Modernization Development $64,198
84.177 Rehabilitation Services_independent Living Services for Older Individuals Who Are Blind $56,288
17.273 Temporary Labor Certification for Foreign Workers $49,847
93.643 Children's Justice Grants to States $48,685
93.667 Social Services Block Grant $45,906
93.127 Emergency Medical Services for Children $45,368
93.671 Family Violence Prevention and Services/domestic Violence Shelter and Supportive Services $43,594
16.017 Sexual Assault Services Formula Program $39,063
45.129 Promotion of the Humanities_federal/state Partnership $34,242
93.669 Child Abuse and Neglect State Grants $33,144
93.369 Acl Independent Living State Grants $33,059
15.916 Outdoor Recreation_acquisition, Development and Planning $32,030
11.U01 Joint Enforcement Agreement $29,826
93.053 Nutrition Services Incentive Program $29,791
11.454 Unallied Management Projects $25,037
10.680 Forest Health Protection $24,576
15.954 National Park Service Conservation, Protection, Outreach, and Education $24,461
45.025 Promotion of the Arts_partnership Agreements $24,399
93.043 Special Programs for the Aging_title Iii, Part D_disease Prevention and Health Promotion Services $21,482
93.747 Elder Abuse Prevention Interventions Program $19,666
93.042 Special Programs for the Aging_title Vii, Chapter 2_long Term Care Ombudsman Services for Older Individuals $17,609
11.407 Interjurisdictional Fisheries Act of 1986 $15,800
97.042 Emergency Management Performance Grants $12,049
93.044 Special Programs for the Aging_title Iii, Part B_grants for Supportive Services and Senior Centers $11,980
16.585 Drug Court Discretionary Grant Program $10,004
17.600 Mine Health and Safety Grants $8,153
93.612 Native American Programs $7,951
11.U02 Unknown $7,719
93.645 Stephanie Tubbs Jones Child Welfare Services Program $7,457
59.037 Small Business Development Centers $6,134
20.514 Public Transportation Research $5,956
93.041 Special Programs for the Aging_title Vii, Chapter 3_programs for Prevention of Elder Abuse, Neglect, and Exploitation $5,350
10.025 Plant and Animal Disease, Pest Control, and Animal Care $5,049
12.113 State Memorandum of Agreement Program for the Reimbursement of Technical Services $4,791
20.703 Interagency Hazardous Materials Public Sector Training and Planning Grants $2,041
97.047 Pre-Disaster Mitigation $1,699
10.179 Micro-Grants for Food Security Program $147
16.575 Crime Victim Assistance $-2,960