Finding Text
Federal Program:
ALN 93.600 Head Start
Category:
Compliance/internal controlCompliance requirement:
Allowable cost/Procurement
Criteria:
Head Start grants policies state that small purchase procurements involve simple procurement methods for securing
services, supplies, or other property less than the simplified acquisition threshold ($250,000) for which non-federal
entities must obtain price or rate quotes from sufficient qualified sources.
BGCPR established in its purchasing and procurement procedures that for all purchases between $10,001 and
$200,000, a minimum of three (3) quotations is required, or alternatively, two (2) quotations with written and
documented justification for efforts made to obtain the third quotation for not receiving it. This should demonstrate
fair competition and reasonable costs.
Condition:
The quotes observed for one of the items tested did not match the specifications of the final purchased equipment.
Cause:
During the testing phase of the equipment, BGCPR determined that the initially quoted electric generator did not
meet the power requirements. Consequently, BGCPR decided to change the order to a generator with higher power
capacity. However, during these procedures, they did not follow the proper procurement process to obtain new
quotations for the different type of equipment that was needed.
Effect or potential effect:
This condition will result in a lack of fair competition and potentially noncompliance with the allowable costs/cost
principles requirements.
Questioned costs:
$63,805.88
Context:
On the review of 32 procurement instances under the Head Start program, one error was identified related to the
procurement of equipment. Specifically, while the procurement process was generally adhered to, one instance
revealed a failure to follow properly the procurement procedures.
Recommendation:
To address this issue, BGCPR should implement a robust review process to ensure that any changes in equipment
specifications are accompanied by a new round of quotations. This process should include clear documentation of
the reasons for the change and efforts made to obtain competitive quotes. Additionally, training staff on procurement
policies and procedures can help prevent similar issues in the future. Ensuring compliance with these policies will
maintain fair competition, reasonable costs, and adherence to allowable costs/cost principles requirements.Views of responsible officials:
BGCPR recognizes that its current purchasing and procurement policies require comprehensive review and strategic
enhancement to ensure they are fully aligned with both internal operational procedures and applicable federal
regulations. This need for improvement reflects the BGCPR’s proactive commitment to strengthening internal
controls, fostering greater accountability, and ensuring that procurement activities are conducted with the highest
standards of transparency and integrity. By refining these policies, BGCPR aims to optimize the efficiency of its
procurement processes, reduce the risk of non-compliance, and promote the responsible stewardship of financial
and material resources. This initiative is also part of a broader effort to support sustainable operational practices and
reinforce public trust in BGCPR’s use of funds.
As a corrective measure, BGCPR will take the following actions and will anticipate completing on June 30, 2025:
a. Develop and adopt a procurement checklist to be completed and reviewed before any purchase is approved.
b. Use the checklist to verify compliance with technical, budgetary, and legal requirements
c. Establish rigorous mechanisms for the authorization, review, and documentation of all purchases.
d. Implement monitoring procedures to control at every stage of the procurement process—from solicitation to
award.