Audit 378976

2025-003 Federal Agency: U.S. Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559, 10.582 Federal Award Notification Number and Year: N/A Award Period: July 1, 2024 – June 30, 2025 Compliance Requirement Affected: Suspension and Debarment Type of Finding Material weakness in internal control over compliance, other matters Criteria or Specific Requirement 2 CFR 200 states that nonfederal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a nonprocurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined by 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition During our testing of procurement transactions of the program, we noted the District did not complete vendor verification before entering into a contract with the vendor. Questioned Costs: None found. Context During our testing of procurement transactions of the program, we noted the District did not complete vendor verification before entering into a contract with the vendor for two of the three vendors that were selected for testing. The vendors were subsequently found to not be suspended or debarred based on District verification. Cause The District did not follow their Federal Funds Procurement Policy related to suspension and debarment. Effect The District could become noncompliant with requirements of Uniform Guidance, resulting in future findings and questioned costs. Repeat Finding No Recommendation We recommend the District review procedures to ensure proper verification is completed prior to entering into a vendor contract. Views of Responsible Officials There is no disagreement with this finding.