Finding Text
U.S. Department of Agriculture
Passed through the Alabama State Department of Education
Program: Summer Food Service Program
CFDA: 10.559
Grant Number: AF6-0000
Noncompliance/Significant Deficiency
Procurement
Criteria
Per 2 CFR 200.318-200.326, non-federal entities must follow federal procurement standards when acquiring goods and services, including adherence to competition requirements and proper documentation.
Condition
During our audit of procurement activities, we identified purchases made from two food vendors that exceeded the micro-purchase threshold of $10,000. There was no evidence that the entity obtained price comparisons or quotations from other sources prior to selecting these vendors. Each vendor was used repeatedly throughout the year, and the cumulative totals were $38,998.
Cause
Staff believed that long-standing relationships with vendors or prior approvals were sufficient and did not realize that federal procurement rules still apply annually.
Effect
Failure to follow small purchase procedures increases the risk of overpaying for goods and may affect allowability of expenditures charged to the program.
Recommendation
We recommend the entity train staff on federal procurement guidelines. Purchases from vendors should be forecasted at the beginning of each grant period. Procurement guidelines should be followed for all vendors from which it is reasonably foreseeable that total purchases will exceed $10,000. Documentation should be maintained for all price quotations and comparisons reviewed prior to purchases for items exceeding the micro-purchase threshold.
Management's Response
Management acknowledges the importance of adhering to federal procurement standards, including the requirement for competitive pricing and documentation for purchases exceeding the micro-purchase threshold