‘NOAA audit questions Wespac’s grant award for DLNR’

Delegate Gregorio Kilili C. Sablan (Ind-MP) said over the weekend that an audit by the Inspector General of the National Oceanic and Atmospheric Administration has found questionable expenditures of $1.23 million by the Western Pacific Regional Fishery Management Council, and includes the citation of a sole-source contract of $344,525 by the CNMI’s Department of Lands and Natural Resources for a fishing vessel and training services.

In addition to the $1,237,671 in questioned costs, the audit, which was released last week, found inadequate documentation that goods and services were delivered by vendors and reported competitive procurements were not followed, Sablan said in his e-kilili newsletter.

With respect to DLNR’s fishing vessel, Sablan said the audit found that the sole-source contract did not include documentation of any market or competitive pricing research to ensure the contract amount was reasonable. Also, he said the purchase was not approved by NOAA, as required.

In its comments to the audit, the council disagreed that it did not follow the competitive procurement requirements for the contracts where sole-source justification were provided.

The council also stated it provided a comparative analysis for vendor selection and vendor selection justification for the sole-source contract by DNLR.

The council further noted that it provided documentation for all contracts requested by the OIG and that questioned costs for which sole-source justifications were used should be removed.

The council’s response provided explanations and rebuttals for each audit’s finding and recommendation included in the draft report, as well as corrective actions planned or taken.

Saipan Tribune learned that the boat is the Kirida, which, according to Lt. Gov. Arnold I. Palacios in his testimony before the House of Representatives Judiciary and Governmental Operations Committee, he had inspected in Hawaii with the Attorney General before it was brought to the CNMI.

Kirida was used by Gov. Ralph DLG Torres and his brothers for their Northern Islands and other “fishing excursions,” as shown by boat logs that the JGO obtained through a subpoena of Boating Safety records, according to a JGO member.

Sablan said the Inspector General wrote to him and the three other members of Congress who requested the audit in 2019.

He said the Wespac has 30 days from Nov. 10 to respond to the final audit report, after which the NOAA Grants Management Division will make a determination on how much of the questioned $1.23 million should be paid back.

The audit recommends that the director of NOAA Grants Management Division make a determination on the $1.23 million in questioned costs recommended by Office of Inspector General for recovery.

The audit also recommends, among other things, to instruct the council to implement any additional measures necessary to ensure adherence to all applicable financial assistance award requirements.

According to the audit, between fiscal years 2010 and 2019, the council received nine Western Pacific Sustainable Fisheries Fund grants and two cooperative agreement awards totaling approximately $7.4 million. These funds supported regional and territory-specific projects such as research and assessment, statistical estimation models, training, education, public outreach, and infrastructure development.

On Aug. 29, 2019, the U.S. Congress, through Sablan, and Reps. Raul Grijalva and Jared Huffman, requested that the OIG, among other things, conduct a detailed audit of Wespac’s expenditures.

The audit found that CNMI’s DLNR claimed costs of $109,751 did not provide any supporting documentation. As a result, they questioned that amount of claimed costs as unsupported.

CNMI’s DLNR was awarded a $354,526 contract on a sole-source basis.

DLNR identified several potential vendors but its sole source justification did not demonstrate it met any of the four instances of allowable noncompetitive procurement. Furthermore, DLNR had not obtained prior approval from NOAA as required for sole-source contracts exceeding $100,000, the audit says.