Finding 1131230 (2024-002)

Reference Number: 2024-002 Compliance Requirement: Procurement and Suspension/Debarment Type of Finding: Compliance Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance AL Number(s) and Title(s): 10.553 and 10.555 – Child Nutrition Cluster Federal Awarding Agency: U.S. Department of Agriculture Federal Award Number: 255AL322N1199 Pass-through Entity: Alabama Department of Education Pass-through Award Number: None Questioned Costs: $62,778.22 Child Nutrition Cluster funds were used to pay $62,778.22 for services and supplies without obtaining required quotes. The U. S. Code of Federal Regulations Title 2, Part 200.320(a), of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states that the recipient or subrecipient is responsible for determining and documenting an appropriate micro-purchase threshold based on internal controls, an evaluation of risk, and its documented procurement procedures. The Board’s documented procurement procedures state that the procurement transactions for federal programs and child nutrition programs that are not subject to the state procurement laws but exceed the aggregate amount of the federal micro-purchase threshold of $10,000 will be obtained by utilizing price or rate quotes from two or more qualified sources. Septic tank services, equipment maintenance/repair services, and kitchen supplies in the amount of $62,778.22 were paid from Child Nutrition Cluster funds. The Board failed to obtain price or rate quotes from an adequate number of qualified sources during the audit period. As a result, the Board failed to comply with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 CFR 320(a). Recommendation: The Board should comply with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 2 CFR 200.320 by following its documented procurement procedures. Views of Responsible Officials of the Auditee Management agrees with this finding and will take corrective actions.