Finding Text
.S. Department of Education passed through State of Utah Board of Education
2024-001 Procurement and Suspension and Debarment
Program Name of Federal Program (Assistance Listing Number)
Child Nutrition Cluster: School Breakfast Program (10.553)
National School Lunch Program (10.555)
Criteria - Recipients of federal awards must follow the procurement standards set out at 2 CFR section 200.317 through 200.326. They must use their own documented procurement procedures, which reflect applicable State laws and regulations, provided that the procedures conform to applicable Federal law and the procurement requirements identified in 2 CFR part 200.
Recipients “must maintain records sufficient to detail the history of procurement. These records will 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” 2 CFR section 200.318(i).
The School’s procurement procedures include the requirement to maintain sufficient documentation of the history of procurement. The School also has procedures to identify procurement transactions requiring competitive bids or proposals.
Context and Condition - We selected three contracts to test for compliance with procurement standards. Records for one contract lacked documentation sufficient to detail procurement history. Upon further investigation, the School determined that the vendor in question was a fraudulent vendor and transactions charged to this vendor for the program were all fraudulent charges.
Of the $738,725 charged to the child nutrition program on the Annual Program Report (APR) submitted to the Utah State Board of Education for the year ended June 30, 2024, $62,246 (8%) were fraudulent charges.
Cause - The School did not follow its documentation policy for obtaining contracts or bids.
Effect - The School paid this vendor $62,246 for goods that were not provided during the year ended June 30, 2024.
Questioned Costs - $62,246 – This amount represents the costs that were charged to the federal award but did not meet program requirements and are considered fraudulent transactions.
Repeat finding - No
Statistically valid - Yes
Recommendation - We recommend the School ensures it 1) maintains documentation of the history of procurement and 2) monitors compliance with documentation requirements.
Views of responsible officials - The School will review its procurement policies and internal controls and ensure timely action is taken when noncompliance is identified.