Audit 390389

SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE AND REPORTABLE INSTANCE OF NONCOMPLIANCE – U.S. DEPARTMENT OF AGRICULTURE, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, CHILD NUTRITION CLUSTER – FEDERAL ALN 10.553, 10.555, AND 10.582 2025-002 Internal Control Over Compliance and Reportable Noncompliance With Federal Procurement Requirements Criteria – 2 CFR § 200.320 requires the District to establish and maintain effective internal control over compliance with procurement requirements applicable to expenditures within its child nutrition cluster federal programs. Condition – During our audit, we noted the District did not have sufficient controls in place within its child nutrition cluster to ensure compliance with federal procurement requirements related to methods of procurement, which resulted in a reportable instance of noncompliance. Questioned Costs – $28,450. Context – For one of twenty-five vendors tested, the District could not provide documentation that two or more quotations were solicited for a contract awarded within its child nutrition cluster federal programs in excess of its stated micro-purchase threshold of $10,000, as required by the Uniform Guidance. This was not a statistically valid sample. Repeat Finding – This is a current year finding. Cause – The District’s internal control procedures over procurement requirements applicable to its child nutrition cluster federal programs were not being consistently followed. Effect – Noncompliance with the procurement requirements could result in the District expending federal funds inappropriately or not obtaining competitively priced goods or services, which could be viewed as a violation of the award agreement. Recommendation – We recommend that the District review its internal control procedures for its child nutrition cluster federal programs to ensure that controls in place over compliance with federal procurement requirements are being consistently applied, including awarding contracts based on multiple quotations for the purchase of goods or services in excess of the District’s micro-purchase threshold of $10,000, as required by the Uniform Guidance. View of Responsible Official and Planned Corrective Actions – There is no disagreement with the audit finding. District management will review its procedures relating to procurement for its federal programs to ensure that multiple quotations are obtained when required and that adequate documentation is retained. The District solicited quotes and retained the necessary documentation for the noncompliant contract in fiscal year 2026. The District has separately issued a Corrective Action Plan related to this finding.