Finding Text
2025-004: FEDERAL PROCUREMENT PROCEDURES Program: Child Nutrition Cluster Federal Assistance Listing Number: 10.553, 10.555, 10.559 Federal Agency: U.S. Department of Agriculture Pass-Through Agency: Arizona Department of Education Grantor Number: ADE ED09-0001 Questioned Costs: $-0- Type of Finding: Noncompliance (Other Matter), significant deficiency in internal control Compliance Requirement: I. Procurement, Suspension, and Debarment Condition: During testing of procurement activities within the Child Nutrition Cluster, we selected three purchases for review. For all three purchases tested, the District did not perform and document the procurement procedures required under federal regulations to obtain written price quotations. Specifically, the District was unable to provide evidence demonstrating that applicable procurement requirements, including obtaining and documenting competition as required by federal procurement standards, were followed prior to making the purchases. Criteria or Specific Requirement: Title 2 CFR §200.318 through §200.327 requires non-federal entities expending federal awards to establish and follow documented procurement procedures that reflect applicable federal, state, and local laws and regulations. These procedures must ensure full and open competition and maintain sufficient records to detail the history of the procurement, including the rationale for the method of procurement, contractor selection, and the basis for contract pricing. Cause: District personnel responsible for procurement and federal program administration did not consistently apply and document procurement procedures for purchases charged to the Child Nutrition Cluster. The District did not maintain documentation to support that three written quotes were maintained to support the purchases or that other applicable methods of procurement were utilized (cooperative purchases, RFPs, etc.) Additionally, management's monitoring controls were not sufficient to ensure compliance with federal procurement requirements prior to the expenditure of federal funds. Effect: Failure to follow and document required procurement procedures increases the risk that purchases may not be made in accordance with federal requirements, potentially limiting competition and resulting in questioned costs, repayment of federal funds, or other sanctions from grantor agencies. Repeat Finding: No. Recommendation: We recommend the District strengthen internal controls over procurement compliance by implementing procedures to ensure all purchases made with federal funds are reviewed for compliance with applicable procurement requirements before purchases are finalized, maintaining documentation supporting the procurement method utilized, solicitation of bids or quotes when required, vendor selection, and price determination. Views of Responsible Officials: The District concurs with this recommendation. See the corrective action plan in a separately published document.