Finding Text
2024-001 – Procurement, Suspension and Debarment
Finding Type. Material Noncompliance; Material Weakness in Internal Controls over Compliance.
Federal program(s)
U.S. Department of Education - Child Nutrition Cluster (10.553, 10.555, and 10.559); Passed through the Michigan Department of Education (MDE); All project numbers.
Criteria. Recipients of federal awards are required to ensure that federal procurement standards are followed for any purchases over the federal micropurchase threshold. 2 CFR 200.320 requires that these purchases must adhere to one of the allowable procurement methods (sealed bids, competitive proposals, noncompetitive procurement) and maintain documentation of this procurement decision.
Condition. Of the six vendors tested for compliance with procurement requirements, the District was unable to provide documentation for compliance with procurement standards for one vendor tested. The vendor had total expenditures of $81,757 during the current fiscal year. Included in these expenditures was the purchase of equipment in the amount of $30,321 which is in excess of the MDE competitive bid threshold. The District was unable to provide documentation to support that competitive bidding was performed in accordance with the District's policies and procedures and MDE guidelines. Additionally, multiple quotes were not obtained for the remaining purchases not in excess of the MDE competitive bid threshold.
Cause. The District does not have the proper internal controls in place to ensure that all procurement contracts awarded to vendors have complied with federal and MDE requirements for allowable procurement methods.
Effect. The District could not properly document compliance with federal requirements as required under Uniform Guidance.
Questioned Costs. While there are no questioned costs as all costs were allowable expenditures for the program, we were unable to verify appropriate selection processes as the procurement requirements and policies were not followed.
Recommendation. We recommend that the District reviews its policies and procedures to ensure that applicable procurement requirements are followed and documented when the District enters into new contracts or procurement arrangements with vendors for goods and/or services on federal programs.
View of Responsible Officials. District officials will review the District's internal procedures to ensure future compliance with and appropriate documentation of procurement requirements vendor relationships.
Responsible Official. LEA Business Manager
Estimated Completion Date. June 30, 2025