Finding 383597 (2023-001)

MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE AND REPORTABLE INSTANCES OF NONCOMPLIANCE – U.S. DEPARTMENT OF AGRICULTURE, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, CHILD NUTRITION CLUSTER – FEDERAL ALN 10.553, 10.555, 10.556, 10.559, AND 10.582 2023-001 Internal Control Over Compliance and Reportable Instances of Noncompliance With Federal Procurement Requirements Criteria – 2 CFR § 200.320(b) Management is responsible for establishing and maintaining effective internal control over compliance with requirements applicable to federal program expenditures, including procurement requirements applicable to the child nutrition cluster program. Condition – During our audit, we noted that the Independent School District No. 279 – Osseo Area Schools (the District) did not have sufficient controls in place within its child nutrition cluster federal program to ensure compliance with federal procurement requirements, which resulted in reportable noncompliance. For one of three vendors tested, the District had not awarded a contract based on bids, as required by Uniform Guidance. Questioned Costs – None noted. Context – One of three vendors tested were not in compliance. This was not a statistically valid sample. Repeat Finding – This is a current year finding. Cause – This was an oversight by district personnel. Effect – Noncompliance with the procurement requirements could result in the District expending federal funds with vendors prior to obtaining bids or quotes, if required, which could be viewed as a violation of the award agreement. Recommendation – We recommend that the District review its internal control procedures relating to procurement for all federal programs. The District should verify compliance with federal procurement procedures, including awarding contracts based on sealed bids or quotations for the purchase of goods or services exceeding applicable federal dollar thresholds. View of Responsible Official and Planned Corrective Actions – The District agrees with the finding. District staff will review policies and procedures related to procurement for all federal programs to ensure compliance with the Uniform Guidance in the future, and will ensure that bids and/or quotations are obtained when required. The District has separately issued a Corrective Action Plan related to this finding.