Audit 396237

2025-004 Improve Procurement Process for Child Nutrition Cluster Federal Agency: U.S. Department of Education Cluster/Program: Child Nutrition Cluster AL Number(s): 10.553/10.555/10.559/10.582 Award Year: 2025 Compliance Requirement: Procurement Type of Finding Compliance Internal Control over Compliance – Material Weakness Criteria or Specific Requirement Uniform Guidance (2 CFR § 200.318–200.320) requires recipients of federal funds to follow their own documented procurement procedures, which must conform to applicable federal and state laws and promote full and open competition. For small purchases, Uniform Guidance and School policy require obtaining price or rate quotations from an adequate number of qualified sources, which per School policies is at least three. Additionally, proper contract documentation must be maintained for vendor relationships. Condition and Context Of the three vendors tested for procurement transactions under the Child Nutrition Cluster program, sufficient support could not be provided for one small purchase selection. School policy requires at least three quotes for small purchases; however, only two quotes were consistently obtained from vendors throughout the year. Each month, only two vendors provided quotes and the lowest-priced vendor was selected to supply produce. Further, no contracts were in place with the vendor supplying the produce. Effect or Potential Effect Noncompliance with policies and procedures regarding required number of quotes and maintaining formal contracts with vendors increases the risk of noncompliance with federal procurement requirements, lack of competition, and unallowable costs. Questioned Costs Due to the condition noted above, we were unable to determine if costs of $241,737 charged to the grant were allowable. Cause The School Department did not implement adequate controls to ensure compliance with its procurement policy for obtaining sufficient quotes and did not formalize vendor relationships with contracts as required. Recommendation The School Department should strengthen its procurement controls by ensuring that the required number of quotes are obtained and documented for all small purchases, in compliance with School policy and Uniform Guidance. The School should also implement procedures to ensure that contracts are in place with all vendors providing goods and services to the program. Views of Responsible Official and Planned Corrective Action Management’s views and Corrective Action Plan are included at the end of this report after the summary Schedule of Prior Year Findings.

2025-003 Improve Controls and Documentation Over Procurement Federal Agency: U.S. Department of Education Cluster/Program: Special Education Cluster AL Number(s): 84.027/84.173 Award Year: 2025 Compliance Requirement: Procurement Type of Finding Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement Uniform Guidance (2 CFR § 200.320) permits noncompetitive (sole source) procurements only when specific conditions are met, such as when the item is available from a single source, and requires documentation justifying the sole source determination. All procurement transactions must be conducted in a manner providing full and open competition, to the maximum extent practicable. Condition and Context Of the two vendors tested for procurement transactions under the Special Education Cluster, support could not be provided for one vendor to justify that they were the only vendor capable of providing the product and that the purchase therefore met the requirements for a sole source procurement. Effect or Potential Effect Lack of documentation to support justification for sole source procurement increases the risk of noncompliance with Uniform Guidance, limits transparency, and could allow for inappropriate procurement practices. Questioned Costs Not determinable. Cause The School Department did not have controls to ensure that sole source procurement transactions are properly documented in accordance with federal requirements. Recommendation The School Department should enhance its procurement controls to ensure all sole source purchases are fully documented with justification in accordance with Uniform Guidance, and maintain supporting records for all federal procurement transactions. Views of Responsible Official and Planned Corrective Action Management’s views and Corrective Action Plan are included at the end of this report after the summary Schedule of Prior Year Findings.