Douglas County School District Re. 1

Federal Agency: Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Identification Number and Year: 24UT311N1099 - 2024 Pass-Through Agency: Colorado Department of Education Pass-Through Numbers: 4553, 4555, 4559, 6555 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters

Criteria or specific requirement: Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. This procurement process must be documented with proper supporting documentation.

Condition: We noted that the District does have policies and procedures in place for compliance with procurement requirements. However, we noted one out of eight vendors did not have an updated sole source justification form on file covering the current fiscal year.

Questioned costs: None

Context: One vendor, out of a sample of eight, did not have an updated sole source justification form covering the current fiscal year.

Cause: The District’s approval of sole source justification forms is typically valid for the life of the business with the vendor, but this one instance had an expiration date on the approval of the vendor as a sole source that ended prior to the current fiscal year. An updated sole source justification from was not completed after the expiration of the previous approval.

Effect: Failure to document the procurement process exposes the District to the risk that the District’s procurement policy was not followed before the contracts were awarded.

Repeat Finding: NoRecommendation: We recommend the District review their controls and procedures surrounding procurement to ensure their purchasing policy is followed.

Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Identification Number and Year: 24UT311N1099 - 2024 Pass-Through Agency: Colorado Department of Education Pass-Through Numbers: 4553, 4555, 4559, 6555 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters

Criteria or specific requirement: Per 2 CFR 200.303, requires that non-federal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures in place to ensure the required certifications for covered contracts and subawards are received, documented, and contracts are not made with a debarred or suspended party.

Condition: We noted that the District does have policies and procedures in place for compliance with suspension and debarment requirements; however, we noted one out of eight vendors selected for testing had not been checked to verify they were not suspended or debarred. We did verify this vendor was not currently suspended or debarred through verification per SAM.gov and therefore, the District is in compliance with the grant requirements.

Questioned costs: None

Context: One vendor, out of a sample of eight, was found to have no evidence of verification that the vendor was not suspended or debarred. We did later verify that the vendor was not suspended or debarred.

Cause: The District switched to working with the vendor directly mid-year and did not perform the suspension and debarment check at that time. The District’s Master Service Agreements contain a clause regarding suspension and debarment but a Master Service Agreement was not entered into with the vendor at that time.

Effect: The District could not be compliance with suspension and debarment requirements for its federal programs.

Repeat Finding: No

Recommendation: We recommend that the District implement policies for verifying suspension and debarment compliance for all transactions with vendors who do not have an existing Master Services Agreement. For vendors with long term agreements, we also recommend reviewing the vendor’s status in SAM.gov at the start of each fiscal year.

Views of responsible officials: There is no disagreement with the audit finding.