Finding Text
Compliance Over Procurement and Suspension and Debarment U.S. Department of Agriculture (USDA) Child Nutrition Cluster ALN 10.555 Criteria: 2 CFR 200.318(a) requires that non-Federal entities use their own documented procurement procedures which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in 2 CFR 200.318 through 200.327. Accordingly, the entity is required to comply with the Louisiana Public Bid Law, LA R.S. 38:2211 et seq., which governs the procurement of goods and services using public funds. Under Louisiana Public Bid Law, purchases meeting applicable bid thresholds must be made by obtaining quotes or through a formal public bid process, as applicable, to ensure that public funds are expended through a transparent, competitive procurement process. Condition: During our testing of Procurement and Suspension and Debarment for the Child Nutrition Cluster, we selected a sample of 5 vendors from a population of 14 vendors utilized during the fiscal year. For one vendor selected, the School Board made purchases totaling $33,000 without obtaining the required competitive bids or quotes in accordance with Louisiana Public Bid Law. Cause: The School Board did not obtain competitive bids or quotes prior to making purchases from the vendor in question, as required under Louisiana Public Bid Law. This condition indicates a deficiency in the School Board’s procurement controls, including the lack of an adequate review process to ensure that purchases meeting applicable bid thresholds are supported by the required quotes or subjected to a formal competitive bid process before a vendor is selected and a commitment is made. Effect: By failing to obtain competitive bids or quotes as required, the School Board cannot demonstrate that the $33,000 in purchases from this vendor represent the best value to the program or that public funds were expended through a fair and open competitive process as required by Louisiana Public Bid Law and 2 CFR 200.318(a). The $33,000 represents known and questioned costs subject to a potential disallowance by the federal awarding agency. Regarding likely questioned costs: our testing covered 5 of 14 vendors (35.7% of the vendor population). The exception was identified within the tested population; however, because procurement noncompliance in this context was vendor-specific rather than transaction-rate-based, the likely questioned costs are limited to the $33,000 associated with the identified vendor. No extrapolation to the untested vendor population has been made, as the noncompliance relates to a discrete procurement decision rather than a systemic per-transaction error. Recommendation: We recommend that management implement a formal procurement review process to ensure that all purchases meeting or exceeding applicable bid thresholds under Louisiana Public Bid Law are supported by the required quotes or subjected to a competitive bid process prior to vendor selection and commitment of funds. Management should develop or strengthen written procurement policies and procedures that clearly identify bid thresholds, required procurement methods, and documentation retention requirements, consistent with 2 CFR 200.318-200.327. Management should also consult with legal counsel and the federal awarding agency regarding the appropriate disposition of the $33,000 in questioned costs identified. Repeat Finding: No. View of Responsible Officials: Prior to purchases being made, the Child Nutrition Program Supervisor will check for suspension and debarment of vendors. The accounts payable accountant will also review for suspension and debarment prior to the payment being made. Evidence of review will be maintained in an appropriately labeled file each year. See response to finding 2025-018 above.