Finding Text
Finding 2025-012 – Child Nutrition Cluster - Inadequate Procurement Policies and Procedures Federal Agency: U.S. Department of Agriculture Federal Program: Child Nutrition Cluster Assistance Listing Numbers: 10.553, 10.555, 10.559 Compliance Requirement: Procurement, Suspension, and Debarment Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria Pursuant to 2 CFR §§ 200.318 through 200.326, non-Federal entities are required to establish and maintain documented procurement procedures that comply with Federal procurement standards applicable to Federal awards. Additionally, 2 CFR § 200.303 requires non-Federal entities to establish and maintain effective internal controls over Federal awards that provide reasonable assurance that the entity is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of Federal awards. Written procurement policies should incorporate applicable Federal procurement methods, competition requirements, documentation standards, and suspension and debarment requirements to facilitate compliance with Uniform Guidance. Condition During testing of procurement and suspension and debarment requirements for the Child Nutrition Cluster, UHY noted that the County's procurement policy did not fully incorporate all requirements prescribed by Uniform Guidance, including certain Federal procurement standards and documentation requirements outlined in 2 CFR §§ 200.318 through 200.326. Although procurements tested during the audit were generally conducted in accordance with applicable requirements, the written procurement policy had not been updated to fully reflect all Federal procurement requirements applicable to federally funded procurements. Context During testing of procurement and suspension and debarment requirements for the Child Nutrition Cluster, UHY noted that the County's procurement policy did not fully incorporate all requirements prescribed by Uniform Guidance, including certain Federal procurement standards and documentation requirements outlined in 2 CFR §§ 200.318 through 200.326. Although procurements tested during the audit were generally conducted in accordance with applicable requirements, the written procurement policy had not been updated to fully reflect all Federal procurement requirements applicable to federally funded procurements. Cause Management had not updated the County's procurement policy to incorporate all applicable Federal procurement requirements prescribed by Uniform Guidance. Existing procedures relied upon management's knowledge and application of procurement requirements rather than a procurement policy that fully documented Federal requirements. Effect Because the County's procurement policy does not fully align with Uniform Guidance requirements, there is an increased risk that procurements charged to Federal awards may not be conducted or documented in accordance with applicable Federal requirements. The absence of a procurement policy that fully incorporates Federal procurement standards increases the likelihood that instances of noncompliance could occur and not be prevented or detected on a timely basis. Accordingly, this matter represents a significant deficiency in internal control over compliance. Identification as a Repeat Finding, if Applicable No. Questioned Costs None identified. Recommendation Management should revise and update the County's procurement policy to incorporate all applicable requirements prescribed by 2 CFR §§ 200.318 through 200.326, including Federal procurement methods, competition requirements, documentation standards, and suspension and debarment requirements. Management should also implement procedures to periodically review changes in Federal grant requirements and update policies and procedures accordingly. Responsible Official Superintendent of Schools and Finance Director Views of Responsible Official The County concurs with the recommendation and will review and revise its procurement policy to incorporate all applicable Federal procurement requirements under Uniform Guidance. Management will also implement procedures to periodically monitor changes to Federal grant requirements and update procurement policies and procedures as necessary to ensure continued compliance with Federal requirements.