Audit 395117

Federal program – Child Nutrition Cluster – Assistance Listing Numbers 10.553 (School Breakfast Program), 10.555 (National School Lunch Program), and 10.559 (Summer Food Service Program for Children) – U.S. Department of Agriculture Program Year 2024–2025 Criteria or specific requirement – Suspension and debarment – 2 CFR §200.214 Condition – During our audit, documentation supporting verification of the suspension and debarment status was not able to be provided for a vendor with which a new covered transaction was entered. However, the vendor is not currently registered as being suspended or debarred. Cause – District procedures are designed to verify suspension and debarment status only upon initial vendor setup and do not require verification upon execution of each new covered transaction with an existing vendor. Effect or potential effect – This condition increases the risk that covered transactions could be entered into with vendors that may become suspended or debarred after initial vendor setup, which could result in noncompliance with federal requirements if not addressed. Questioned Costs – N/A Context – Out of a population of five vendors with which a covered transaction was entered into during the period, one was selected for testing. Documentation supporting the verification of the suspension and debarment status for this vendor was not able to be provided. Our sample was not, and was not intended to be, statistically valid. Identification as a repeat finding, if applicable – N/A Recommendation – We recommend the District update its policies and procedures to require suspension and debarment verification for all covered transactions, including those involving existing vendors, either prior to contract execution or award or on an annual basis. The District should also ensure such reviews are documented and retained in accordance with federal record retention requirements. Views of responsible officials and planned corrective action – Management agrees with this finding.

Federal program – Child Nutrition Cluster – Assistance Listing Numbers 10.553 (School Breakfast Program), 10.555 (National School Lunch Program), and 10.559 (Summer Food Service Program for Children) – U.S. Department of Agriculture Program Year 2024-2025 Criteria or specific requirement – Procurement – 7 CFR §210.21 and 2 CFR §200.319(c) Condition – During our audit, we identified that the District included a geographic (local) preference in a Request for Proposal (RFP) and related vendor evaluation that was funded, in whole or in part, with federal program resources. Federal regulations generally prohibit the use of geographic preferences in the evaluation of bids or proposals for federally funded procurements unless expressly authorized by federal statute. Cause – District procurement procedures allow for the inclusion of local preference considerations in solicitations and evaluations. While the District is aware of the requirement that such preference is not included in federally funded RFPs, this was not adequately considered when determining the specific expenditures to be applied to the federal program. Effect or potential effect – This condition presents a risk that expenditures associated with procurements including local preference considerations may be allocated to federal programs in a manner that does not fully align with federal procurement requirements. Questioned Costs – N/A Context – Out of a population of five transactions requiring RFPs that were entered into during the period, one was selected for testing. The RFP for this purchase included consideration of local preference within the evaluation process. Upon identification of the condition to the transaction selected for testing the other four transactions requiring RFP entered into by the District were tested to ensure they were not awarded based on a local geographic presence which we confirmed were not. Our sample was not, and was not intended to be, statistically valid. Identification as a repeat finding, if applicable – N/A Recommendation – We recommend the District update its policies and procedures to clearly prohibit the use of a local preference when completing RFPs funded with or expected to be funded with federal programs. The District should also ensure that procurement staff receive appropriate training on federal procurement requirements and that compliance is documented and retained in accordance with federal record retention requirements. In addition, we recommend that the District consider whether or not federal procurement requirements were adhered to when reclassifying expenditures between federal and non-federal sources. Views of responsible officials and planned corrective action – Management agrees with this finding and believes that other eligible expenses paid by the District can be applied to the grant funds.