Finding 1131563 (2024-001)

2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR part 200 of the Uniform Guidance. 2 CFR §§ 200.318 through 200.326 of the Uniform Guidance outline procurement requirements for all non-payroll direct expenditures. Entities expending federal monies are required to follow Uniform Guidance procurement standards. 2 CFR 200.318(i) states that the non-Federal entity 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. The School District considered the contracts with Educational Service Centers to be noncompetitive procurements; however, the School District was unable to provide documentation that they met the criteria established in 2 CFR 200.320(c) to be considered as such. Due to a lack of internal controls over federal procurement documentation, the District did not properly maintain required supporting documentation. Failure to follow federal procurement standards, may result in the misuse of public funds, loss of "low risk auditee" status, increased audit expenses, loss of future federal awards, findings for recovery or other audit adjustments. The School District should review and follow the established Procurement policy to ensure proper procurement procedures are followed and sufficiently documented.