Report Contents
What OIG Audited
The Bureau of European and Eurasian Affairs (EUR) was responsible for administering and overseeing $8.4 million in high-risk contract task orders from October 2014 through August 2016 and $35.05 million in grants and cooperative agreements from FY 2014 through FY 2016. These contract task orders and grants support EUR’s mission of promoting U.S. interests in Europe and Eurasia on issues such as international security, the North Atlantic Treaty Organization, coordination with the European Union, and other regional efforts.
The Office of Inspector General (OIG) conducted this audit to determine whether EUR’s administration and oversight of selected contracts and grants were in accordance with Federal laws and Department of State (Department) policy.
What OIG Recommends
OIG made 17 recommendations to improve EUR’s administration and oversight of contracts and grants. On the basis of the responses received from EUR and the Bureau of Administration’s Office of Logistics Management, Office of Acquisitions Management (AQM), and the Office of the Procurement Executive (A/OPE) to a draft of this report, OIG considers 16 recommendations resolved pending further action and 1 recommendation unresolved.
A synopsis of EUR’s, AQM’s, and A/OPE’s responses and OIG’s reply follow each recommendation in the Results section of this report. EUR’s, AQM’s, and A/OPE’s responses to a draft of this report are reprinted in Appendices C, D, and E, respectively.
What OIG Found
EUR did not consistently administer and oversee the contract task orders selected for this audit in accordance with Federal laws and Department policies. Specifically, Contracting Officer’s Representatives’ (COR) files were not properly maintained to include all required documents such as a quality assurance surveillance plan or documentary evidence that all invoice charges were reviewed and deliverables were accepted. In addition, OIG found instances in which EUR employees who served as the COR or Government Technical Monitor (GTM) were not formally designated. The failure to comply with required contract administration and oversight policies occurred, in part, because EUR did not have sufficient internal procedures to ensure adherence to Federal and Department contract administration policy. In addition, EUR management and Contracting Officers did not sufficiently oversee COR and GTM performance, and they did not always include required performance work commitments in the COR and GTM performance standards. Without comprehensive oversight of EUR contract task orders, EUR will not have reasonable assurance that the task orders are supporting EUR’s mission as intended.
Similar to the concerns identified with respect to contract administration and oversight, OIG also found that EUR Grants Officers (GO) and Grants Officer Representatives (GOR) did not administer and oversee the grants selected for this audit in accordance with Federal law and Department policy. Specifically, grant agreements did not contain sufficient performance indicators to assess whether program objectives were being achieved. Furthermore, GOR files did not include all required documents, such as monitoring plans, evidence of reviews of performance and financial reports, or evidence of site visits. These deficiencies occurred, in part, because EUR did not have sufficient internal procedures to ensure required grant policies were followed. In addition, EUR management and the GOs did not sufficiently oversee GOR performance. Until these deficiencies are corrected, EUR will not have reasonable assurance that EUR is spending funds in accordance with grant terms, nor will it be able to affirm that grant awards are achieving expected program goals and objectives.
Report Terms
Report Recommendations
OIG recommends that the Bureau of European and Eurasian Affairs develop and implement procedures to monitor and verify the completeness, accessibility, retention, and review of Contracting Officer’s Representatives files in accordance with the Federal Acquisition Regulation 1.604(c), the Foreign Affairs Handbook 14 FAH-2 H-142(b), and 14 FAH-2 H-517(a-b).
OIG recommends that the Bureau of Administration, Office of Logistics Management, Office of Acquisitions Management, develop and implement procedures to verify that Contracting Officers are monitoring Contracting Officer’s Representatives files in accordance with Procurement Information Bulletin No. 2014-10.
OIG recommends that the Bureau of European and Eurasian Affairs, in coordination with the Bureau of Administration, Office of Logistics Management, Office of Acquisitions Management, develop and implement a communications strategy to ensure that Contracting Officer’s Representatives are aware that a quality assurance surveillance plan is required for contracts and task orders.
OIG recommends that the Bureau of Administration, Office of Logistics Management, Office of Acquisitions Management, develop and implement procedures to verify that Contracting Officers are developing quality assurance surveillance plans for all service contracts and monitoring Contracting Officers Representatives adherence to the quality assurance surveillance plans.
OIG recommends that the Bureau of European and Eurasian Affairs, develop and implement procedures detailing the required use of COR eFiling.
OIG recommends that the Bureau of European and Eurasian Affairs, in coordination with Bureau of Administration, Office of the Procurement Executive, develop and implement procedures for Contracting Officer’s Representatives and Government Technical Monitors for (a) reviewing various types of invoices, (b) obtaining sufficient supporting documentation, (c) confirming that labor hours billed are supported by contractor timesheets and charged to the corresponding task order, and (d) verifying that expense reports are included and are supported by attached receipts.
OIG recommends that the Bureau of European and Eurasian Affairs develop and implement procedures to ensure that it complies with the Bureau of Administration, Office of the Procurement Executive’s guidance to nominate eligible Federal Acquisition Certification for Contracting Officer’s Representative candidates to the Contracting Officer (CO) for official designation as a Contracting Officer’s Representative (COR), Alternate Contracting Officer’s Representative (A/COR), and Government Technical Monitor (GTM) and ensure that other COR, A/COR, or GTM candidates do not fulfill this role without the CO’s concurrence and written designation.
OIG recommends that the Bureau of Administration, Office of Logistics Management, Office of Acquisitions Management, develop and implement procedures to verify the formal designation and authorization of Contracting Officer’s Representatives (COR) and Alternate CORs or Government Technical Monitors as necessary for each task order in writing and that the designation memoranda are tailored, as necessary, to identify specific duties, responsibilities, and limitations for each contract or task order administered.
OIG recommends that the Bureau of Administration, Office of Logistics Management, Office of Acquisitions Management, require Contracting Officers to use the Contracting Officer's Representative Certification and Appointment Criteria Matrix in Volume 14 of the Foreign Affairs Handbook (FAH)-2 Exhibit H-143 to document their analyses of the training and experience of Contracting Officer’s Representative nominees and their decision of the appropriateness of the Federal Acquisition Certification for Contracting Officer’s Representative level needed for oversight of the Bureau of European and Eurasian Affairs task orders, as required by 14 FAH-2 H-143(b).
OIG recommends that the Bureau of European and Eurasian Affairs, in coordination with the Bureau of Administration, Office of Logistics Management, Office of Acquisitions Management, develop and implement guidelines requiring supervisors of Contracting Officer’s Representatives (COR) and Government Technical Monitors (GTM) to obtain formal feedback from Contracting Officers regarding employee performance and incorporate this feedback into COR and GTM performance evaluations.
OIG recommends that the Bureau of European and Eurasian Affairs develop and implement standard operating procedures to require and verify that grant awards include appropriate and clearly defined performance indicators with all required components to measure the progress of a grant award in accordance with the Department of State’s Federal Assistance Directive.
OIG recommends that the Bureau of European and Eurasian Affairs develop and implement a process to verify that Grants Officer Representatives develop and use monitoring plans that include all required elements to conduct surveillance activities in accordance with the Department of State’s Federal Assistance Directive.
OIG recommends that the Bureau of European and Eurasian Affairs develop and implement a process to verify Grants Officer Representatives compliance with requirements to perform and document reviews of performance and financial reports within 30 days of receipt of reports, which is consistent with the Department of State’s Federal Assistance Directive.
OIG recommends that the Bureau of European and Eurasian Affairs develop and implement a process to require and verify that Grants Officer Representatives perform and document site visits for each grant recipient commensurate with the complexity and value of the grant and as outlined in the monitoring plan for the grant.
OIG recommends that the Bureau of European and Eurasian Affairs, in coordination with the Bureau of Administration, Office of Logistics Management, Office of Acquisitions Management, develop and implement guidelines requiring supervisors of Grants Officer Representatives (GOR) to obtain formal feedback from Grants Officers regarding GOR performance and incorporate this feedback into GOR performance evaluations.
OIG recommends that the Bureau of Administration, Office of the Procurement Executive, conduct a management review of grants administered by the Bureau of Europe and Eurasian Affairs to examine and reinforce adherence to the Department of State’s Federal Assistance Directive.
OIG recommends that the Bureau of Administration, Office of Logistics Management, Office of Acquisitions Management, develop and implement procedures to verify that Grants Officers are monitoring Grants Officer Representatives oversight activities and reviewing grant files to verify completeness, retention, and accessibility of required documentation within the grant file in accordance with the Department of State’s Federal Assistance Directive.