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Board Report: 2014-FMIC-B-009 June 30, 2014

The Board Should Enhance Its Policies and Procedures Related to Conference Activities

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Finding 1: Procurement Section Should Ensure That Requirements Are Met for Conference-Related Purchases of $25,000 to $49,999

We found that the Boardís Procurement staff did not complete a written solicitation of bids for one of the two conferences in our sample with a single purchase within the $25,000 to $49,999 range. The Boardís Acquisition Policy requires a written solicitation of bids for single purchases within that cost range. According to Procurement staff, a change in the eventís location prevented Procurement from obtaining written bids. Failure to obtain written solicitation of bids hinders the Boardís ability to demonstrate that it appropriately selected vendors by taking into consideration price and other relevant factors.

Procurement Could Not Provide a Written Solicitation of Bids for a Conference-Related Service Within the $25,000 to $49,999 Range

We requested from Procurement the written solicitation of bids for two conferences that had single purchases within the $25,000 to $49,999 range, and we found that Procurement staff did not obtain a written solicitation of bids for a single purchase of $36,676. For single purchases of $25,000 to $49,999, the Acquisition Policy and Procurement Procedure require that the contracting officer solicit bids from at least three vendors and review written quotes and maintain records to establish the propriety of any award for services. According to Procurement staff, during the course of planning the conference, the anticipated location where it was to be held changed, which resulted in a limited time frame to plan the conference. Due to the compressed time frame, Procurement staff contacted three hotel vendors, but did not obtain a written solicitation of bids. Thus, Procurement did not comply with the written solicitation of bids requirement in the Acquisition Policy for single purchases of $25,000 to $49,999.

Recommendation

We recommend that the Director of the Division of Financial Management

  1. Ensure that a written solicitation of bids is obtained for conference-related single purchases of $25,000 to $49,999.

Managementís Response

The Director of the Division of Financial Management generally concurs with this recommendation. In his response, the Director noted that conferences and related expenses present a unique challenge to the standard process of obtaining three written quotes due to the dynamic nature of conference scheduling. 

The Director of the Division of Financial Management stated that procurement staff are currently reviewing the Acquisition Policy and related procedures and will work with the Office of the Secretary and other stakeholders to develop additional guidelines specific to conference planning. The Director of the Division of Financial Management emphasized that while this review is likely to result in a simplified approach that may adjust the current requirement for obtaining a written solicitation of bids, it will not eliminate the Division of Financial Managementís commitment to maintaining accountability and control of procurement actions and decisions. 

OIG Comment

We believe that the actions described by the Division of Financial Management are responsive to our recommendation. The OIG intends to follow up on the Division of Financial Managementís actions to ensure that this recommendation is fully addressed.