Attachment A_Non-US Pre-Award Survey Regulations.pdf

ATTACHMENT A:

RELEVANT REGULATIONS FOR PRE-AWARD ASSESSMENTS

ADS 591.3.3.1 – Pre-Award Audits/Surveys (effective Date: 08/24/2017)

The Contracting Officer (CO), or Award Officer (AO), must request a pre-award audit or survey before negotiating any contract or modification resulting from a proposal in excess of $500,000, unless the CO considers the information available sufficient to determine the reasonableness of the proposal or the financial responsibility of the organization. At his/her discretion, the CO may request pre-award audits for contracts or modifications resulting from proposals less than $500,000.

For Grants, the CO must request a pre-award survey if the prospective recipient has not received a

Federal award in the last 5 years or the CO, AO or Agreement Officer’s Representative is uncertain about the recipient’s capacity to perform technically or financially. M/OAA/CAS must determine whether pre-award audits or surveys of US organizations are to be conducted.

Pre-award audits and surveys are conducted by the cognizant audit agency, non-Federal resources, or other Federal auditors. M/OAA/CAS direct-hire staff may conduct pre-award surveys and other financial reviews, but cannot perform pre-award audits conducted in accordance with standards approved by the Comptroller General of the U.S. Federal or non-Federal auditors contracted by the

RIGs or contracted by Bureaus and missions, in consultation with the RIGs, must conduct pre-award audits of foreign organizations’ pricing proposals.

ADS 303.3.9 – Pre-Award Responsibility Determination (Effective Date: 08/01/2019)

The recommendation or selection of an application for award by a Planner or a Selection Committee does not in any way guarantee the award. The Agreement Officer (AO) must evaluate the risks posed by applicants before making the award. The AO must evaluate risk in accordance with the principles established by USAID and the Office of Management and Budget (OMB) (see 2 CFR 200.205). The

AO must also check the Agency Secure Image Storage and Tracking System (ASIST) for completed performance reviews to inform the risk assessment of the applicant.

Depending on the result of this pre-award risk assessment, the AO may either:

• Make the award,

• Deny the recommendation of the Planner and not execute the award, or

• Award with "specific conditions" (2 CFR 200.207 and 303.3.9.2).

A positive risk assessment means that the applicant possesses or has the ability to obtain the necessary management competence to plan and carry out the assistance program to be funded, and that the applicant will practice mutually agreed upon methods of accountability for funds and other assets provided by USAID.

ADS 303.3.9.1 – Pre-Award Surveys Requirements (Effective Date: 08/01/2019)

If any of the following criteria apply, the AO must establish and convene a formal survey team to conduct an examination that will help inform the Pre-Award Risk Assessment (see 303.3.9):

(1) The AO or Planner is uncertain about the prospective recipient's capacity to perform financially or programmatically.

(2) The prospective recipient has never had a USAID grant, cooperative agreement, or contract.

This requirement does not apply to Fixed Amount Awards.

(3) The prospective recipient has not received an award from any Federal agency within the last five years. This requirement does not apply to Fixed Amount Awards.

(4) The AO has knowledge of deficiencies in the applicant's annual audit (Single Audit or equivalent).

(5) The AO determines it to be in the best interest of the U.S. Government.

ADS 303.9.1 b– Contents of the Pre-Award Survey

The survey team examines the applicant’s systems to determine whether the prospective recipient has the necessary organization, experience, accounting and operational controls, and technical skills – or the ability to obtain them – in order to achieve the objectives of the program.

(1) For a US Organization, apply the following standards:

22 CFR 226.20 – 226.28 – Financial and Program Management

22 CFR 226.30 – 226.37 -- Property Management

22 CFR 226.40 --226.49 -- Procurement Standards

22 CFR 226.50 --226.53 -- Reports and Records

The AO or his/her representative must conduct a detailed analysis that addresses whether the applicant’s:

• Accounting, recordkeeping, and overall financial management systems meet the standards in

2 CFR 200.300-309 and 2 CFR 200.333-337.

• System of internal controls is reasonable in accordance with applicable cost principles. This includes the segregation of duties, handling of cash, contracting procedures, and personnel and travel policies.

• Property management system, if applicable, meets the property standards in 2 CFR 200.310-

316, 22 CFR 226.

• Meets the requirements in 2 CFR 200.330-332 for the administration and monitoring of sub-awards.

• Procurement system, if procurement is significant to the award, meets the standards set forth in 2 CFR 200.317-326.

(2) For a non-US applicant, although 22 CFR 226 does not directly apply, the AO must use this regulation in determining whether a potential non-US recipient is responsible. The AO must ensure that the applicant can meet the requirements of ADS 303mab, Standard Provisions for Non

U.S. Nongovernmental Organizations as part of the risk assessment. For local non-U.S.

organizations, the pre-award survey team must either use ADS 303sam, Non-U.S. Organization

Pre-Award Survey Guidelines and Support or conduct a detailed analysis in accordance with locally-established or award-specific criteria that achieve the same objectives as the NUPAS.

(3) For Fixed Amount Awards, the AO must use the ADS 303mak, Fixed Amount Award Entity

Eligibility Checklist to ensure the intended recipient will be able to comply with ADS 303mat, Standard Provisions for Fixed Amount Awards to Nongovernmental Organizations.

ADS 303.3.9.1 c– Formal Pre-Award Survey Team Guidelines

When assembling a formal survey team, the AO must select one with appropriate expertise.

1). A typical team consists of:

• A Development Objective Team member,

• The AO, or the AO’s representative,

• A financial officer from the, Office of the Chief Financial Officer, or the Mission or

Regional Controller's office, and

• A representative from M/OAA/Contract Audit and Support Division, Contract Audit

Management Branch (for Washington-based awards), if possible

(2) Depending on the capacity of the Operating Unit to assemble the above team, the survey may be conducted in whole or in part by a local accounting firm approved by the cognizant Regional

Inspector General as long as the Scope of Work for such work includes conflict of interest restrictions prohibiting the firm from providing capacity development to entities it surveys.

(3) The survey team reviews the applicant’s systems against the standards discussed in paragraph b of this section and submits its findings to the AO for review, consideration, and informing the risk assessment.

The survey tool helps the NUPAS team assess the strengths and weaknesses of a potential partner. Depending on the nature of the award, the reviewing team will pre-determine the specific areas for review in the following categories:

First Criterion: Legal Structure

1.1 Local Organization Definition (if competition is limited to local entities)

1.2 Legal Requirements

1.3 Organizational Structure

1.4 Governance

1.5 Control Environment

Second Criterion:

1.1Financial Management and Internal Control Systems

2.1 Banking Relationship and Accounts

2.2 Accounting/Bookkeeping System

2.3 Chart of Accounts, General Ledger and Financial Statements

2.4 Variance Analysis (Budget to Actual Cost)

2.5 Allowable and Unallowable Cost

2.6 Direct and Indirect Cost

2.7 Payments – Segregation of Duties

2.8 Accounting Cycle – Segregation of Duties

2.9 Financial Records Management

2.10 Sources of Funding

2.11 Financial Reporting

2.12 Audit and Review of Financial Statements

2.13 Financial Management Personnel

Third Criterion: Procurement Systems

3.1 Procurement Policies, Procedures and Practices

3.2 Compliance with Policies and Procedures – Reasonableness of Price

3.3 Procurement and Sub-awards

Fourth Criterion: Human Resources Systems

4.1 Overall HR Policies and Procedures

4.2 Staff Time Management

4.3 Payroll System

4.4 Travel Policies and Procedures

Fifth Criterion: Project Performance Management

5.1 Technical Evaluation Criteria (TEC to determine)

5.2 Project Management Capacity

Sixth Criterion: Organizational Sustainability

6.1 Cash Flow Management

6.2 Absorptive Capacity

For additional guidance regarding local Non U.S. organizations pre-award surveys, risk assessments, and specific conditions (see ADS 303sam, NUPAS Guidelines and Support)

If USAID does not accept the report because of deficiencies in the work or noncompliance with the scope of work, the contractor shall perform any additional work necessary as agreed with

USAID/West Africa at no additional cost to USAID/West Africa.