Finding Text
Controls 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. The entity is also required to maintain procurement records sufficient to document the history of each procurement transaction, including the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Condition: During our testing of procurement and suspension and debarment for the Child Nutrition Cluster, we selected a sample of 5 vendors/contracts from a population of 14 vendors utilized during the fiscal year. For one vendor selected, the School Board was unable to provide a complete contract file containing evidence that the contract terms were properly reviewed and/or approved prior to execution. The file also did not contain sufficient documentation to demonstrate that the procurement file was complete and reviewed for compliance with applicable procurement and suspension and debarment requirements. Cause: The School Board had policies and procedures in place to ensure contract files included required documentation, including evidence of review and approval of contract terms. However, the policies and procedures were not consistently followed. As a result, the contract file did not contain sufficient documentation to demonstrate that the required review and approval procedures were performed. Effect: Without a complete contract file, the School Board cannot demonstrate that the contract terms were properly reviewed and approved, that the procurement was complete in accordance with applicable requirements, or that suspension and debarment procedures were adequately documented. This increases the risk that federally funded contracts may be awarded to vendors that are suspended, debarred, or otherwise excluded from participation in federal programs. Recommendation: We recommend that management strengthen the application of its existing procurement and contract review procedures to ensure they are consistently followed for all federally funded purchases. Contract files should be reviewed for completeness prior to contract execution and payment to ensure they include evidence of contract term review and approval, procurement support, and suspension and debarment verification. We also recommend that management periodically monitor contract files for compliance with established policies and procedures. 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 payment being made. Evidence of review will be maintained in an appropriately labeled file each year.