Audit 395736

2 CFR § 400.1 gives regulatory effect for the U.S. Department of Agriculture to the Office of Management and Budget guidance in subparts A through F of 2 CFR part 200, as supplemented by this part, as USDA policies and procedures for uniform administrative requirements, cost principles, and audit requirement for Federal awards. 2 CFR § 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain effective internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR § 200.320(a)(2) indicates, in part, when the aggregate dollar amount of the procurement transaction is higher than the micro-purchase threshold, but does not exceed the simplified acquisition threshold, simplified acquisition procedures can be used. If simplified acquisition procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined by the recipient or subrecipient. 2 CFR § 200.318(i) indicates the non-Federal entity must maintain records sufficient to detail the history of procurement transactions. These records must include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Anthony Wayne Local School District Board Policy – Procurement - Federal Grant/Funds indicates all purchases for property and services made using federal funds must be conducted in accordance with all applicable Federal, State and local laws and regulations, the Uniform Guidance, and the District’s written policies and procedures. Purchasing records are sufficiently maintained to detail the history of all procurements and must include at least the rationale for the method of procurement, selection of contract type, and contractor selection or rejection; the basis for the contract price; and verification that the contractor is not suspended or debarred. Furthermore, the policy states small purchases include the acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold, ($10,000) but does not exceed the simplified acquisition threshold of $250,000. Small purchase procedures require that price or rate quotations shall be obtained from at least two qualified sources. Due to a lack of controls over the procurement process, for one out of four (25%) vendors examined during the testing of the Child Nutrition Cluster, the District did not obtain quotes from other vendors. The District’s procurement policy states “price or rate quotations shall be obtained from at least two qualified sources” based on the procurement totals. Failure to obtain quotations from a variety of vendors may result in the District not utilizing the most cost effective vendor as well as further noncompliance with Federal requirements. The District should adopt procedures to help ensure records are maintained to document the history of the procurement, including the rationale for the purchase method, selection of vendors, cost/price analysis (if applicable) and the reason for limiting competition (if applicable). The District should also amend its procurement policy to indicate the form of quotations required when using small purchase procedures.