Hoosick Falls Central School District

Finding 2025-001: Federal Award Finding – Procurement (Significant Deficiency) Child Nutrition Cluster (ALN 10.553 / 10.555) Federal Agency: U.S. Department of Agriculture Pass-Through Entity: New York State Education Department Assistance Listing Numbers: 10.553, 10.555 Criteria Title 2 CFR §200.318(a) requires non-federal entities to use documented procurement procedures consistent with state, local, and federal law. The School District’s procurement policy requires competitive bidding for purchases exceeding $20,000. Condition During the fiscal year ended June 30, 2025, the School District made purchases charged to the Child Nutrition Program in excess of $20,000 without obtaining competitive bids as required by the School District’s procurement policy. Cause District personnel did not consistently apply the School District’s written procurement policy when making purchases funded by the Child Nutrition Program. Effect The School District did not comply with federal procurement requirements under 2 CFR §200.318(a). Failure to follow required procurement procedures increases the risk that goods and services are not obtained at the most competitive price and limits assurance that federal funds are expended in accordance with applicable requirements. Questioned Costs None. Based on audit procedures performed, the costs tested appeared reasonable and allowable. Auditor’s Recommendation We recommend the School District strengthen controls over procurement to ensure purchases charged to federal programs comply with the School District’s written procurement policy and federal procurement requirements. This includes training staff responsible for procurement and implementing monitoring procedures to ensure competitive bidding requirements are consistently followed.

Children from households with incomes at or below 130 percent of the Federal poverty level are eligible to receive meals or milk free under the School Nutrition Programs. Children from households with incomes above 130 percent but at or below 185 percent of the Federal poverty level are eligible to receive reduced price meals. Persons from households with incomes exceeding 185 percent of the poverty level pay the full price (7 CFR sections 245.2, 245.3, and 245.6; section 9(b)(1) of the NSLA (42 USC 1758 (b)(1)); sections 3(a)(6) and 4(e) of the CNA (42 USC 1772(a)(6) and 1773(e))). We sampled 25 students receiving benefits under the Child Nutrition Cluster programs. We noted that one student was receiving free lunch benefits, but should have received reduced lunch benefits. In this instance, income was incorrectly calculated when determining eligibility, causing an incorrect certification. Known and likely questioned costs were determined not to be material or exceed $25,000. The sampling methodology used was not statistically valid. In addition, we noted that there was a lack of evidence for review of applications. Applications must be reviewed, and the household number and income should be compared to the National Income Eligibility Guidelines to determine whether the student qualifies for free or reduced lunch. Adequate oversight of the eligibility determination process was not in place in order to identify mistakes in determining eligibility. We recommend that the School District institute additional procedures to ensure that eligibility determinations are made correctly. We also recommend that the School District ensures that applications are reviewed, as well as the household number and income be compared to the National Income Eligibility Guidelines to calculate whether the student qualifies for free or reduced lunch. As an additional level of control, the Treasurer will compare an annual eligibility report to the student applications, as well as ensure applications are being reviewed.