Finding Text
Criteria: 2 C.F.R. § 200.318(a) requires non-Federal entities to use their own documented procurement procedures which reflect applicable state and local laws and regulations, provided such procedures conform to federal procurement standards. Additionally, school district policy and state law require service contracts to be approved by the Board and entered upon the official minutes prior to execution and payment. Condition: During our testing of procurement transactions within the Child Nutrition Program for the fiscal year ended June 30, 2025, we noted the District procured services without obtaining a contract approved by the Board of Education and recorded in the official minutes prior to services being rendered and payments being made. Cause: The District did not ensure that procurement procedures requiring Board approval of service contracts were followed for services charged to the Child Nutrition Program. Effect: Failure to obtain Board approval of service contracts constitutes noncompliance with local policy, state law, and federal procurement requirements. This control deficiency increases the risk of unauthorized procurements and may subject questioned costs to federal review. Questioned Costs: None noted Context: Of the procurement transactions tested within the Child Nutrition Program, four exceptions were identified out of forty tested, representing approximately $41,025 in expenditures. The exceptions involved one contract. Based on the results of our testing, this matter appears to be an isolated instance. Although no questioned costs were identified, the lack of timely Board approval increased the risk of noncompliance and unauthorized purchasing. Recommendation: The District should strengthen internal controls over procurement to ensure all service contracts, including those charged to federal programs, are approved by the Board of Education and entered upon the official minutes prior to execution and payment. Management should also provide training to personnel responsible for federal program expenditures regarding procurement compliance requirements under Uniform Guidance.