INTERNATIONAL RESEARCH & EXCHANGES BOARD, INC.

Finding 2021-001: Non-Compliance over Procurement - Review of Debarment and Suspension ? U.S. Department of State ? Investing in People in the Middle East and North Africa Information on the Federal Program: U.S Department of State, CFDA 19.021, Contract No SIZ-100-15-GR-025; SIZ-100-17-CA028; SIZ10019GR0047; SIZ10019GR0046; SIZ10019GR0034, Year 2021 Criteria: The Uniform Guidance requires organizations to review for debarment and suspension of contractors to ensure they are eligible to participate rendering services to the Federal award. Condition: Review and documentation for debarment and suspension was not performed during the procurement process for 1 contractor. Cause: Due to lack of timely review and lack of awareness of the requirement. Effect: Non-compliance with adequate review for contractor debarment, suspension, or exclusion during procurement process. Questioned Costs: There were no material questioned costs identified. Context: For 2021, a System for Award Management (SAM) report was not reviewed for debarment, suspension or exclusion of 17% of the contractor population tested prior to providing Federal funds. Repeat Finding: No. Recommendation: We recommend management establish controls to ensure a timely review for contractor debarment, suspension, or exclusion is performed during the procurement process and that all procurement documentation is retained to evidence the debarment and suspension review through the SAM. Views of Responsible Officials and Planned Corrective Action: See management?s response at the Corrective Action Plan on pages 42-47.

Finding 2021-001: Non-Compliance over Procurement - Review of Debarment and Suspension ? U.S. Department of State ? Investing in People in the Middle East and North Africa Information on the Federal Program: U.S. Department of State, CFDA 19.021, Contract No S-IZ-100-15-GR-025; S- IZ-100-17-CA-028; SIZ10019GR0047; SIZ10019GR0046; SIZ10019GR0034, Year 2021 Finding: The Uniform Guidance requires organizations to review for debarment and suspension of contractors to ensure they are eligible to participate rendering services to the Federal award. Review and documentation for debarment and suspension was not performed during the procurement process for 1 contractor. Planned Corrective Action: IREX Grants and Contracts Office conducted an internal training on vetting requirements in March 2021 which included distribution of a ?quick guide to vetting? written instruction. All entities which sign an agreement with IREX (including subaward, contract, and consulting) are reviewed for debarment or suspension against the SAM.gov list. IREX has implemented a digital vendor management system to better monitor and enforce compliance with this requirement. Name and Person Responsible: Deputy Chief Financial Officer (Budget & Compliance), Richard Schrader Anticipated Completion Date: June 30, 2022

Finding 2021-002: Non-Compliance over Procurement - Review of Debarment and Suspension ? U.S. Agency for International Development ? Other Programs Information on the Federal Program: U.S. Agency for International Development, CFDA 98.UNK, Contract No 72027820C00004, Year 2021 Criteria: The Uniform Guidance requires organizations to review for debarment and suspension of contractors to ensure they are eligible to participate rendering services to the Federal award. Condition: Review and documentation for debarment and suspension was not performed during the procurement process for 1 contractor. Cause: Due to lack of timely review and lack of awareness of the requirement. Effect: Non-compliance with adequate review for contractor debarment, suspension, or exclusion during procurement process. Questioned Costs: There were no material questioned costs identified. Context: For 2021, a System for Award Management (SAM) report was not reviewed for debarment, suspension or exclusion of 13% of the contractor population tested prior to providing Federal funds. Repeat Finding: No. Recommendation: We recommend management establish controls to ensure a timely review for contractor debarment, suspension, or exclusion is performed during the procurement process and that all procurement documentation is retained to evidence the debarment and suspension review through the SAM. Views of Responsible Officials and Planned Corrective Action: See management?s response at the Corrective Action Plan on pages 42-47.

Finding 2021-002: Non-Compliance over Procurement - Review of Debarment and Suspension ? U.S. Agency for International Development ? Other Programs Information on the Federal Program: U.S. Agency for International Development, CFDA 98.UNK, Contract No 72027820C00004, Year 2021 Finding: The Uniform Guidance requires organizations to review for debarment and suspension of contractors to ensure they are eligible to participate rendering services to the Federal award. Review and documentation for debarment and suspension was not performed during the procurement process for 1 contractor. Planned Corrective Action: IREX Grants and Contracts Office conducted an internal training on vetting requirements in March 2021 which included distribution of a ?quick guide to vetting? written instruction. All entities which sign an agreement with IREX (including subaward, contract, and consulting) are reviewed for debarment or suspension against the SAM.gov list. IREX has implemented a digital vendor management system to better monitor and enforce compliance with this requirement. Name and Person Responsible: Deputy Chief Financial Officer (Budget & Compliance), Richard Schrader Anticipated Completion Date: June 30, 2022

Finding 2020-005: Non-Compliance over Procurement - Review of Debarment and Suspension - U.S. Agency for International Development ? Foreign Assistance for Program Overseas Information on the Federal Program: U.S. Agency for International Development, CFDA 98.001, Contract No AID-OAA-A-17-00034, Year 2020 Criteria: The Uniform Guidance requires organizations to review for debarment and suspension of contractors to ensure they are eligible to participate rendering services to the Federal award. Condition: Review and documentation for debarment and suspension was not performed during the procurement process for 1 contractors. Cause: Due to lack of timely review and lack of awareness of the requirements. Effect: Non-compliance with adequate review for contractor debarment, suspension, or exclusion during procurement process. Questioned Costs: There were no material questioned costs identified. Context: For 2020, a System for Award Management (SAM) report was not reviewed for debarment, suspension or exclusion of 4% of the contractor population tested prior to providing Federal funds. Repeat Finding: Yes. Recommendation: We recommend management establish controls to ensure a timely review for contractor debarment, suspension, or exclusion is performed during the procurement process and that all procurement documentation is retained to evidence the debarment and suspension review through the SAM.

Finding 2020-005: Non-Compliance over Procurement - Review of Debarment and Suspension - U.S. Agency for International Development ? Foreign Assistance for Program Overseas Information on the Federal Program: U.S. Agency for International Development, CFDA 98.001, Contract No AID-OAA-A-17-00034, Year 2020 Finding: The Uniform Guidance requires organizations to review for debarment and suspension of contractors to ensure they are eligible to participate rendering services to the Federal award. Review and documentation for debarment and suspension was not performed during the procurement process for 1 contractor. Planned Corrective Action: Additional training for program staff on the requirement to review for debarment and suspension of contractors was held on December 2, 2020. In addition to the current assurance review performed prior to vendor payment, implementation of digital vendor management and procurement systems in FY 2021 will enable Finance to review for compliance with this requirement prior to vendor creation or procurement initiation. Name and Person Responsible: Director of Grants & Contracts, Richard Schrader Anticipated Completion Date: June 30, 2021

2019-002

Finding 2020-006: Non-Compliance over Procurement - Review of Debarment and Suspension - Department of State ? Educational Exchange Programs - Teachers Information on the Federal Program: Department of State, CFDA 19.408, Contract Nos S-ECAGD-19-CA-0040 and S-ECAGD-19-CA-0036, Year 2020 Criteria: The Uniform Guidance requires organizations to review for debarment and suspension of contractors to ensure they are eligible to participate rendering services to the Federal award. Condition: Review and documentation for debarment and suspension was not performed during the procurement process for 1 contractor. Cause: Due to lack of timely review and lack of awareness of the requirements. Effect: Non-compliance with adequate review for contractor debarment, suspension, or exclusion during procurement process. Questioned Costs: There were no material questioned costs identified. Context: For 2020, a System for Award Management (SAM) report was not reviewed for debarment, suspension or exclusion of 17% of the contractor population tested prior to providing Federal funds. Repeat Finding: Yes. Recommendation: We recommend management establish controls to ensure a timely review for contractor debarment, suspension, or exclusion is performed during the procurement process and that all procurement documentation is retained to evidence the debarment and suspension review through the SAM.

Finding 2020-006: Non-Compliance over Procurement - Review of Debarment and Suspension - Department of State ? Educational Exchange Programs - Teachers Information on the Federal Program: Department of State, CFDA 19.408, Contract Nos S-ECAGD-19-CA-0040 and S-ECAGD-19-CA-0036, Year 2020 Finding: The Uniform Guidance requires organizations to review for debarment and suspension of contractors to ensure they are eligible to participate rendering services to the Federal award. Review and documentation for debarment and suspension was not performed during the procurement process for 1 contractor. Planned Corrective Action: Additional training for program staff on the requirement to review for debarment and suspension of contractors was held on December 2, 2020. In addition to the current assurance review performed prior to vendor payment, implementation of digital vendor management and procurement systems in FY 2021 will enable Finance to review for compliance with this requirement prior to vendor creation or procurement initiation. Name and Person Responsible: Director of Grants & Contracts, Richard Schrader Anticipated Completion Date: June 30, 2021

2019-002

Finding 2020-007: Non-Compliance over Procurement - Review of Debarment and Suspension - Department of State ? Department of State ? AEECA PD Information on the Federal Program: Department of State, CFDA 19.900, Contract No SRB10018CA0001, Year 2020 Criteria: The Uniform Guidance requires organizations to review for debarment and suspension of contractors to ensure they are eligible to participate rendering services to the Federal award. Condition: Review and documentation for debarment and suspension was not performed during the procurement process for 2 contractors. Cause: Due to lack of timely review and lack of awareness of the requirements. Effect: Non-compliance with adequate review for contractor debarment, suspension, or exclusion during procurement process. Questioned Costs: There were no material questioned costs identified. Context: For 2020, a System for Award Management (SAM) report was not reviewed for debarment, suspension or exclusion of 11% of the contractor population tested prior to providing Federal funds. Repeat Finding: Yes. Recommendation: We recommend management establish controls to ensure a timely review for contractor debarment, suspension, or exclusion is performed during the procurement process and that all procurement documentation is retained to evidence the debarment and suspension review through the SAM.

Finding 2020-007: Non-Compliance over Procurement - Review of Debarment and Suspension - Department of State ? Department of State ? AEECA PD Information on the Federal Program: Department of State, CFDA 19.900, Contract No SRB10018CA0001, Year 2020 Finding: The Uniform Guidance requires organizations to review for debarment and suspension of contractors to ensure they are eligible to participate rendering services to the Federal award. Review and documentation for debarment and suspension was not performed during the procurement process for 2 contractors. Planned Corrective Action: Additional training for program staff on the requirement to review for debarment and suspension of contractors was held on December 2, 2020. In addition to the current assurance review performed prior to vendor payment, implementation of digital vendor management and procurement systems in FY 2021 will enable Finance to review for compliance with this requirement prior to vendor creation or procurement initiation. Name and Person Responsible: Director of Grants & Contracts, Richard Schrader Anticipated Completion Date: June 30, 2021

2019-002

Information on the Federal Program: U.S. Agency for International Development, CFDA 98.001, Contract No 720-117-18-CA-00002, Year 2019 Criteria: The Uniform Guidance requires that the entity must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. No employee, officer, or agent may participate in the selection, award, or administration of a contract supported by a Federal award if he or she has a real or apparent conflict of interest. Condition: A conflict of interest existed during the procurement of services for one contractor during the year ended June 30, 2019. Cause: Due to lack of awareness of the requirements and inability to follow internal conflict of interest policy standards. Effect: Non-compliance with conflict of interest requirements under procurement standards from the Uniform Guidance. Questioned Costs: There were no material questioned costs identified. Context: Subsequent to the associated procurement process, IREX identified a conflict of interest for the Chief of Party, due to a relationship with a contractor, under a service agreement subject to the Uniform Guidance. IREX determined the Chief of Party for the Comunitiatea Mea program was inappropriately involved in the recommendation and approval process for the procurement of this contractor due to this conflict of interest. We reviewed the supporting documentation for all costs incurred related to this contractor, and determined the contract or other related supporting documentation to be complete, appropriately authorized and reviewed. Repeat Finding: No. Recommendation: We recommend Management review internal conflict of interest policies with all personnel involved in the procurement process. Further, we recommend Management establish further controls to ensure internal conflict of interest policies are understood and followed by all parties involved in the procurement process under all federal grant awards.

Information on the Federal Program: U.S. Agency for International Development, CFDA 98.001, Contract No 720-117-18-CA-00002, Year 2019 Planned Corrective Action: In this instance, the organization?s policies regarding conflict of interest were not followed to disclose the conflict of interest. To improve conflict-of-interest controls, management initiated prompt steps to review and strengthen the organization?s relevant policies and procedures. New revised conflict-of-interest disclosure requirements are in development and these will be implemented and promulgated to the organization, including their incorporation into procurement policies and processes. These modifications will include annual filings of potential conflicts by senior staff. Name and Person Responsible: The compliance officer, Anne Shackleton, along with management. Anticipated Completion Date: June 30, 2020.

Information on the Federal Program: U.S. Agency for International Development, CFDA 98.001, Contract No AID-OAA-LA-14-00004, Year 2019 Criteria: The Uniform Guidance requires that contemporaneous documentation be maintained for the basis for all contractor selections, including the basis for contractor selection, justification for lack of competitive bids when a competitive bid process is not completed and basis for price/cost. Additionally, it requires organizations to review for debarment and suspension of contractors to ensure they are eligible to participate rendering services to the federal award. Condition: There was no contemporaneous documentation for the evaluation and selection process for one contractor. Additionally, review and documentation for debarment and suspension was not performed during the procurement process for the same contractor. Cause: Due to lack of timely review and lack of awareness of the requirements. Effect: Non-compliance with contemporaneous documentation of evaluation and selection process for the contractor, and non-compliance with adequate review for contractor debarment, suspension, or exclusion during procurement process. Questioned Costs: There were no material questioned costs identified. Context: The contractor identified above, which had approximately $18,000 in expenditures during the year ended June 30, 2019, was previously employed by IREX in 2015, at which point a System for Award Management (SAM) report was reviewed for debarment, suspension, or exclusion. However, SAM report review procedures were not performed or retained in relation to the procurement process for contracted services in 2019. Additionally, management performed their evaluation for the basis for contractor selection subsequent to contractor procurement, which is required to be performed contemporaneously or before procurement under the Uniform Guidance. We reviewed the supporting documentation for all costs incurred related to this contractor, and determined the contract or other related supporting documentation to be complete, appropriately authorized and reviewed. Repeat Finding: No. Recommendation: We recommend Management establish formal written polices to perform and retain the required contemporaneous documentation for all contractor selections, including the evaluation and selection process, as well as review for debarment and suspension through the SAM report review process. Additionally, we recommend Management review these written policies with all personnel involved in the procurement process.

Information on the Federal Program: U.S. Agency for International Development, CFDA 98.001, Contract No AID-OAA-LA-14-00004, Year 2019 Planned Corrective Action: Management's plan to migrate the organization to a global digital procurement approach will reduce the likelihood of future non-conformity with procurement rules, ensuring completeness and greater accuracy and error prevention in procurement processes and record-keeping. Phase I entails globally implementing an online solution to capture e-invoicing and all spend. Phase II will implement an online solution automating and integrating electronic requests, approvals and workflows to purchase, receipt/approve, to accounts payable vouchering in the United States that must be processed at IREX Headquarters. Phase III will extend the digital procurement to Field Offices abroad, equipping them with similar capabilities to ensure procurement assurance. Until the digital procurement system is in place, quality assurance on completed procurement action memoranda will be manually instituted starting in January 2020. Name and Person Responsible: Michael Graham, Chief Financial Officer Anticipated Completion Date: Phase I completion will occur by July 1, 2020. Phase II activation will occur by December 31, 2020. Phase III will be implemented by June 30, 2021.