Audit 373782

Finding Type. Immaterial Noncompliance / Significant Deficiency in Internal Control over Compliance (Procurement, Suspension and Debarment). Federal Programs. Child Nutrition Cluster; U.S. Department of Agriculture; ALN 10.553 and 10.555; Passed through Michigan Department of Education; Award Numbers 241970, 251970, 241960, and 251960. Criteria. Recipients of federal awards are required to follow their own internal purchasing policies, as well as comply with purchasing standards set forth in the Uniform Guidance. A recipient of federal awards is required to determine that vendors being paid with federal funds are not suspended or debarred from doing business with the Federal Government. Such procedures are required whenever the amount disbursed to a single vendor in a given year is expected to be at least $25,000. Condition. The District was unable to provide documentation to support its consideration of suspension and debarment requirements for all vendors selected for testing. Cause. This condition was caused by management's oversight in knowing the federal compliance requirements of the grant, and maintaining appropriate supporting documentation to evidence compliance. Effect. As a result of this condition, the District was exposed to the risk that disbursements of federal awards would be made to vendors suspended or debarred by the federal government and subject to disallowance by the grantor. Questioned Costs. No costs have been questioned as a result of this finding. Recommendation. We recommend that the District verify that any of their vendors with $25,000 spent with federal funds were not suspended or debarred, and that documentation of these procedures be retained. View of Responsible Officials. We concur with the audit assessment regarding this matter.