Dover City School District

2 C.F.R. ? 400.1 gives regulatory effect to the Department of Agriculture for 2 C.F.R. ? 200.318(a) which requires the School District to use its own documented procurement procedures which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this section. 2 C.F.R. ? 200.319 requires that all procurement transactions must be conducted in a manner providing full and open competition consistent with the standards of this section and 2 C.F.R.? 200.320. 2 C.F.R ? 200.320 requires procurement to be performed through micro-purchase procedures, small purchase procedures, sealed bids, competitive proposals or noncompetitive proposals when only one source was available. Furthermore, 2 C.F.R. ? 200.318(i) provides that the entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. The School District implemented policy # DECA ? Administration of Federal Grant Funds, last revised on September 14, 2020. However, the policy did not document procurement performed through micro-purchase procedures. Procurement by micro-purchase was the acquisition of supplies or services, the aggregate dollar amount of which does not exceed $3,500. To the extent practicable, the School District must distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive quotations if the School District considers the price to be reasonable. The National Defense Authorization Act of 2018 allowed entities to increase the micro-purchase threshold from $3,500 to $10,000. However, this increase was required to be formally adopted by policy. As this was not formally approved, the School District was subject to the $3,500 threshold. During 2022, the School District purchased items from eight vendors with federal nutrition monies exceeding the $3,500 threshold where they did not ensure open competition by seeking multiple quotes. As a result, the School District did not ensure open competition through procurement. The School District should review their policy and the requirements of 2 C.F.R. ?? 200.318 through 200.320, as well as the National Defense Authorization Act of 2018. The School District should update their policy to include procurement by micro-purchases with a limit of either $3,500 or $10,000, as desired. The School District should ensure open competition has occurred by seeking multiple quotes for expenditures aggregating to more than the threshold per vendor, utilizing the required number of quotes as documented in their policy. For expenditures within the approved micro-purchase threshold, the School District should, to the extent practicable, distribute micro-purchases among vendors. This will help to ensure that the School District?s policies meet federal requirements, and the School District ensures open competition through procurement.

7 C.F.R. ? 245.6a required the School District to verify select free and reduced food service applications. The verification process includes selecting a sample of applications and obtaining written documentation regarding income. 7 C.F.R. ? 245.6a, paragraph (a)(7) documents that sources of information for verification include written evidence, collateral contacts, and systems of records. Written evidence shall be used as the primary source of information for verification. Written evidence includes written confirmation of a household?s circumstances, such as wage stubs, award letters, and letters from employers. Whenever written evidence is insufficient to confirm income information on the application or current eligibility, the local educational agency may require collateral contacts. Collateral contacts are verbal confirmations of a household?s circumstances by a person outside of the household. Agency records to which the State agency or local educational agency may have access can also be utilized for verification. The School District selected six applications for verification. One family verbally communicated their household earnings to the School District and later submitted a wage stub within the verification time period. However, the School District utilized the verbal earnings amount in the verification process rather than using the family's wage stub, resulting in the family receiving free status rather than denied or full pay status. Furthermore, this would have led to receiving less program income from providing meals as well as being over reimbursed for claimed meals relating to this family's actual benefit usage. The School District should review the annual ?Ohio Department of Education Office for Child Nutrition - Verification Instruction Manual? as well as the Federal requirements outlined within 7 C.F.R. ? 245.6a. All verifications should be performed in accordance with the manual and be performed by someone other than the original verifying official on the initial application. Additionally, all income documentation should be reviewed to ensure that amounts entered into the food service management system are correct. These procedures will help to ensure that benefits are correctly calculated and provided as well as help to ensure that the School District is not over or under reimbursed for claimed free and reduced lunches.

Cash Management Finding Number: 2021-001 Assistance Listing Number and Title: AL # 10.553 and 10.555 Child Nutrition Cluster Federal Award Identification Number / Year:2021 Federal Agency: U.S. Department of Agriculture Compliance Requirement: Cash Management Pass-Through Entity: Ohio Department of Education Repeat Finding from Prior Audit? No Material Weakness The Ohio Department of Education (ODE) requires the School District to report meals served to students through the Claims Reimbursement and Reporting System (CRRS) in order for ODE to reimburse the School District for meals served with federal funding. As a part of the internal control process, the School District utilized the PaySchools point of sale system to track meals served. This system generated CN-6 and CN-7 reports which the School District utilized to report meals served in the CRRS. For September 2020, the School District under reported free breakfasts by 352 meals. This occurred as meals reported in the CRRS did not match the meals served as documented in the School District?s CN-6 and CN-7 reports. Errors in reporting indicated an internal control failure for 33% of the months tested. As a result, there was an increased risk in the School District being reimbursed improper amounts of federal funding. The School District should review CN-6 and CN-7 reports monthly and implement a system to ensure that data from these reports are properly reported in the CRRS. This will help to ensure that controls are in place and that claims reimbursements are received in the proper amounts. Officials? Response: See Corrective Action Plan

Procurement Finding Number: 2021-002 Assistance Listing Number and Title: AL # 10.553 and 10.555 Child Nutrition Cluster Federal Award Identification Number / Year: 2021 Federal Agency: U.S. Department of Agriculture Compliance Requirement: Procurement Pass-Through Entity: Ohio Department of Education Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 C.F.R. ? 400.1 gives regulatory effect to the Department of Agriculture for 2 C.F.R. ? 200.318(a) which requires the School District to use its own documented procurement procedures which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this section. 2 C.F.R. ? 200.319 requires that all procurement transactions must be conducted in a manner providing full and open competition consistent with the standards of this section and 2 C.F.R.? 200.320. 2 C.F.R ? 200.320 requires procurement to be performed through micro-purchase procedures, small purchase procedures, sealed bids, competitive proposals or noncompetitive proposals when only one source was available. Furthermore, 2 C.F.R. ? 200.18(i) provides that the entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. The School District implemented policy # DECA ? Administration of Federal Grant Funds, last revised on September 14, 2020. However, the policy did not document procurement performed through micro-purchase procedures. Procurement by micro-purchase was the acquisition of supplies or services, the aggregate dollar amount of which does not exceed $3,500. To the extent practicable, the School District must distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive quotations if the School District considers the price to be reasonable. The National Defense Authorization Act of 2018 allowed entities to increase the micro-purchase threshold from $3,500 to $10,000. However, this increase was required to be formally adopted by policy. As this was not formally approved, the School District was subject to the $3,500 threshold. During 2021, the School District purchased items from seven vendors with federal nutrition monies exceeding the $3,500 threshold where they did not ensure open competition by seeking multiple quotes. As a result, the School District did not ensure open competition through procurement. The School District should review their policy and the requirements of 2 C.F.R. ?? 200.318 through 200.320, as well as the National Defense Authorization Act of 2018. The School District should update their policy to include procurement by micro-purchases with a limit of either $3,500 or $10,000, as desired. The School District should ensure open competition has occurred by seeking multiple quotes for expenditures aggregating to more than the threshold per vendor, utilizing the required number of quotes as documented in their policy. For expenditures within the approved micro-purchase threshold, the School District should, to the extent practicable, distribute micro-purchases among vendors. This will help to ensure that the School District?s policies meet federal requirements, and the School District ensures open competition through procurement. Officials? Response: See Corrective Action Plan

Eligibility Finding Number: 2021-003 Assistance Listing Number and Title: AL # 10.553 and 10.555 Child Nutrition Cluster Federal Award Identification Number / Year: 2021 Federal Agency: U.S. Department of Agriculture Compliance Requirement: Eligibility Pass-Through Entity: Ohio Department of Education Repeat Finding from Prior Audit? No Noncompliance and Significant Deficiency 7 CFR Part 245.6(c)(4) requires that the local educational agency must use the income information provided by the household on the application to calculate the household's total current income for determination if the household was eligible for free or reduced price benefits. When a household submits an application containing complete documentation, as defined in 7 CFR Part 245.2, and the household's total current income is at or below the eligibility limits specified in the Income Eligibility Guidelines as defined in 7 CFR Part 245.2, the children in that household must be approved for free or reduced price benefits, as applicable. Due to deficiencies in internal controls, three percent of the eligibility determinations tested were made incorrectly. Errors are described as follows: ? One household submitted an application documenting annual income of $66,560, with a household size of seven. However, the student was listed under both the Student and Member sections of the application rather than only being listed under the Student section, resulting in the student being counted twice in the household size when determining the student?s eligibility. Therefore, the student?s eligibility was incorrectly determined to be reduced rather than full-priced based on the Income Eligibility Guidelines. ? One household submitted an application documenting monthly income of $3,800, with a household size of eight (which included three students of the School District). However, the students were listed under both the Student and Members sections of the application rather than only being listed under the Student section, resulting in the students being counted twice in the household size when determining the student?s eligibility. Therefore, the students' eligibility was incorrectly determined to be free rather than reduced based on the Income Eligibility Guidelines. Officials? Response: See Corrective Action Plan