Audit 380234

Finding 2025-001: Procurement (50000) Repeat Finding? No Program Identification: Federal Agency: U.S. Department of Education Pass-through Entity: California Department of Education Program Name: Individuals with Disabilities Education Act (IDEA) (AL No. 84.027, 84.173) Criteria: Code of Federal Regulations, CFR 200.320(b), mandates formal bidding methods are required for purchases over the simplified acquisition threshold, currently $250,000, requiring public solicitation, detailed specifications, written awards to the lowest responsible bidder and transparent evaluation. Condition: During our testing of procurement, we sampled one contract that would require “formal procurement methods” when awarding a contract. The district could not provide documentation that would demonstrate that formal procurement methods were followed when awarding the contract. Context: Deficiency was isolated to the one contract tested. Questioned Costs: $553,091 in awarded contracts. Cause: Lack of oversight resulted in a contract being awarded without following the required formal procurement method. Effect: This resulted in roughly $553,091 awarded in contracts, without following proper procedures. Recommendation: We recommend that the District train employees and implement the required federal procurement procedures to ensure compliance. In addition, we recommend that the District adopt a board policy that addresses procedures related to federal procurement. Views of Responsible Officials: During the 2025-26 fiscal year, the District implemented changes to reclassify certain contracts from federal funding sources to state funding. The District utilized the SELPA Master Contract for applicable vendors to ensure proper contracting and compliance. Federal funds will continue to be used to support Instructional Aides (IAs). These actions were taken to improve alignment with funding requirements and strengthen fiscal compliance.