Finding Text
Federal Program: ALN 10.536 CACFP Training Grants Category: Compliance/internal control significant deficiency Compliance requirements: Allowable costs / cost principles/procurement Record retention Condition: The procurement process was not adequately documented to demonstrate compliance with BGCPR's procurement policy. Criteria: 2 CFR § 200.318(a) requires recipients and subrecipients to maintain and use documented procurement procedures for procurement transactions under a Federal award or subaward, including the acquisition of property or services. These procedures must be consistent with applicable State, local, and tribal laws and regulations and the Federal procurement standards. 2 CFR § 200.318 (e) established that when appropriate for the procurement or use of common or shared goods and services, recipients and subrecipients are encouraged to enter into State and local intergovernmental agreements or inter-entity agreements for procurement transactions. These or similar procurement arrangements using strategic sourcing may foster greater economy and efficiency. Documented procurement actions of this type (using strategic sourcing, shared services, and other similar procurement arrangements) will meet the competition requirements of this part. 2 CFR § 200.318 (i) established that the recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. According to VI. Purchasing and Procurement of the BGCPR’s Fiscal Policies and Procedures, all requisitions, purchase orders, and invoices must be approved prior to the purchase commitment. For purchases between up to $1,000, quotations are not required; however, the Purchasing Department must obtain price information from the supplier. Every transaction should have a formal purchase order from BGCPR’s system. Further, 2 CFR §200.403(g) requires costs charged to Federal awards to be adequately documented. Moreover, pursuant to 2 CFR §200.334, recipients and subrecipients must retain all Federal award records, including financial records, supporting documentation, and statistical records, for a minimum of three years from the date of submission of the final financial report. If litigation, claims, or audit findings are initiated before the expiration of the retention period, the records must be retained until all such matters are resolved and final action has been taken. Context: For 2 samples tested, purchases were made without a formal purchase order generated from the system. In addition, 1 sample included merchandise received and paid in excess of the amount authorized in the purchase order. The purchase order was not amended. Cause: Program procurement personnel relied on the pass-through entity's procurement process and did not consistently maintain documentation required under BGCPR's internal procurement policy. Questioned cost: Amount is below the threshold to be considered a questioned cost. Effect or potential effect: Failure to consistently follow the entity’s procurement policy may result in unsupported or unauthorized purchases, payments exceeding approved amounts, and questioned costs if the expenditures are not properly authorized, documented, or determined to be allowable. Recommendation: Management should strengthen oversight of procurement activities and ensure that all procurement transactions are supported by documentation demonstrating compliance with BGCPR's procurement policies, including the use of formal purchase orders and adherence to authorized purchasing limits. Views of officials responsible: In order to avoid this situation happening in the future, instruction will be provided to all personnel emphasizing that every purchase should be made through a purchase order. This will ensure that we follow the BGCPR formal procedure and ensure better internal control is being followed. In addition, we will emphasize that no shipment should be received if such purchase is not in accordance with the specification disclosed in the purchase order. Anticipated Completion Date: September 30, 2026