Finding Text
Improve Controls Over Procurement Procedures (Material Weakness, Compliance Finding) Federal Agency: Department of Agriculture Cluster/Program: Child Nutrition Cluster Assistance Listing Number(s): 10.553/10.555/10.559 Award Year: 2024 Compliance Requirement: Procurement Criteria Under 2 CFR 200.318–.326, recipients of federal funds must follow federal, state, and local procurement standards when acquiring goods and services under federal programs. This includes documented procedures, competitive bidding or quotes for procurements over established thresholds, and proper contract management. Condition During fiscal year 2024, the District did not perform proper procurement procedures for a food vendor selected for testing under the Child Nutrition Cluster. Specifically, there was no evidence of competitive bidding or solicitation of multiple quotes as required. Cause The District did not consistently adhere to established procurement policies or federal requirements for competitive procurement under the Child Nutrition Cluster. Effect Failure to follow federal procurement requirements increases the risk of noncompliance with program regulations, potentially resulting in questioned costs or loss of funding. Context This issue appears to be an isolated incident based on our procurement testing. Questioned Costs Although we identified deficiencies in the district’s procurement procedures, we have not identified questioned costs related to this finding. This is because, based on our review, all goods and services procured were received, were necessary for the grant program, and were properly supported by invoices and evidence of payment. While procurement procedures did not fully comply with federal requirements, there was no indication that the costs incurred were unreasonable, unallowable, or unrelated to the federal program. As such, no costs were questioned as a result of this finding. Recommendation We recommend the district ensure that all procurements under federal programs follow the required procedures, including documented solicitation of bids or quotes, vendor selection justification, and retention of procurement records. Staff responsible for procurement should be trained on federal requirements and procurement policies should be periodically reviewed for compliance. View of Responsible Officials and Planned Corrective Actions The District’s corrective action plan is included at the end of this report.