Finding 538107 (2024-001)

Material Weakness
Requirement
ABEILN
Questioned Costs
-
Year
2024
Accepted
2025-03-27

AI Summary

  • Core Issue: The District's procurement policies do not meet federal standards under 2 CFR 200.318, lacking procedures for full competition and inclusion of small and minority businesses.
  • Impacted Requirements: Noncompliance with federal procurement standards risks questioned costs and limits opportunities for small and disadvantaged businesses.
  • Recommended Follow-Up: Revise procurement policies, train staff on updates, conduct regular compliance reviews, and document efforts to engage diverse business enterprises.

Finding Text

Criteria: Under 2 CFR 200.318, non-federal entities are required to maintain documented procurement procedures that align with applicable federal, state, and local laws. Additionally, entities must ensure that all procurements provide full and open competition and take steps to utilize small and minority businesses, women's business enterprises, and labor surplus area firms when possible. Condition: The District's procurement policies do not comply with the federal procurement standards outlined in 2 CFR 200.318 through 200.327. Specifically, the policies lack adequate procedures to ensure full and open competition, and they do not include provisions addressing the use of small, minority-owned, and women-owned business enterprises as required by federal regulations. Cause: The District has not updated its procurement policies to reflect current federal requirements, which were revised under the Uniform Guidance. The lack of training and resources contributed to the oversight. Effect: Noncompliance with federal procurement standards could lead to questioned costs for expenditures under the Child Nutrition Cluster. It also incresaes the risk of noncompetitive practices and missed opportunities to engage small and disadvantaged businesses. Questioned Costs: Unknown. Recommendation: In order to correct the procurement process for Child Nutrition the client should revise the District's procurement policies to fully comply with 2 CFR 200.318 through 200.327, provide training for staff involved in procurement to ensure they understand and implement the updtaed policies, conduct periodic reviews of procurement activities to verify compliance with the revised policies, document efforts to engage small, minority-owned, and women-owned business enterprises in procurement activiites. Prior Year Finding: None. Auditee Response: See attached response.

Corrective Action Plan

Management Response: The Mifflinburg Area School District agrees with the finding. The SFA has updated Policy #626 Procurement - Federal Programs. The SFA has removed the RFP reference from the informal procurement method. The SFA reviewed the bidding requirements and will adhere to the policy. This policy was approved by the School Board in May 2024. The SFA has updated future produce solicitations to include the following: Pricing will be a cost-plus fixed fee structure. All prices bid for all products will be net, Free on Board (F.O.B.). SFA will consider individual product price changes both as part of a renewal to the awarded contract and during the contract year. Product price changes may not exceed the U.S. Department of Labor-Bureau of Labor statistics Northeast region not seasonally adjusted consumer price index percentage change annual average for the previous 12 months. Vendors must submit both the supplier charge and the fixed fee, which much be listed separately. Additionally, the SFA implemented a formal requisition process in the Food Service department, in which pricing would be entered into the requisition and verified against the bid or other respective documents, then submitted for approval. The SFA employees responsible were trained in this procedure. Individual Responsible: Superintendent, Business Manager, Food Service Director Anticipated Completion Date: May 31, 2024

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

  • 1114549 2024-001
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
84.010 Title I Grants to Local Educational Agencies $508,458
10.555 National School Lunch Program $158,672
10.553 School Breakfast Program $140,608
84.367 Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) $74,251
84.424 Student Support and Academic Enrichment Program $40,134
93.778 Medical Assistance Program $20,265
84.027 Special Education Grants to States $19,777
84.425 Education Stabilization Fund $12,440
84.365 English Language Acquisition State Grants $4,656
93.566 Refugee and Entrant Assistance State/replacement Designee Administered Programs $3,639
10.649 Pandemic Ebt Administrative Costs $3,256
84.173 Special Education Preschool Grants $2,970