Tiffin City School DistrictLocal Government

Noncompliance and Material Weakness 2 CFR ? 400.1 gives regulatory effect to the Department of Agriculture for 2 CFR ? 200.318(a) which requires that the non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part. Also, 2 CFR ? 200.320(b) requires that non-Federal entities receiving Federal awards (i.e., auditee management) must use the small purchase procedures. Per the District?s Procurement policy ?small purchase procedures provide for relatively simple and informal procurement methods for securing services, supplies, and other property, the dollar amount of which exceeds $10,000 and does not exceed $250,000; that is not subject to sealed bids. Small purchase procedures require that price or rate quotations shall be obtained from an adequate number of qualified sources including two or more known suppliers.? Due to deficiencies in the District?s internal controls over compliance requirements, six percent of the procurements did not contain the required price or rate quotations. The District routinely ordered food and supplies from Tiffin Paper Company Food Service during the audit period, totaling $40,024, despite not following their procurement policy and receiving price quotations for these products or services. The lack of not obtaining quotes from vendors with costs more than the simplified acquisition threshold not only violates federal grant requirements but also increases the risk of noncompliance with grant requirements going undetected in a timely manner. The District should review the federal regulations and ensure that all required policies are followed and obtain price quotations from two or more qualified sources.

Noncompliance and Significant Deficiency 7 CFR ? 245.6(a-c) provides that schools participating in the National School Lunch Program, School Breakfast Program, or Special Milk Program shall provide meal benefit forms to families in making application for free or reduced meals or free milk for their children, based on established eligibility criteria. A child?s eligibility for free or reduced price meals under the Child Nutrition Cluster program is established through direct certification or by submission of an annual application which furnishes such information as family income and family size. The District determines eligibility by comparing the data reported on the student application to published income eligibility guidelines from the Federal Register. 7 CFR ? 245.6a(e)(1) provides that prior to conducting any other verification activity, an individual, other than the individual who made the initial eligibility determination, shall review for accuracy each approved application selected for verification to ensure that the initial determination was correct. Due to deficiencies in the District's internal controls over compliance requirements, four percent of applications tested for compliance were determined to be incorrect. Failing to properly determine eligibility could result in the District not being properly reimbursed for free, reduced, and full priced meals. Furthermore, the District has the same individual determine both the initial eligibility and the verification eligibility procedures. The District should review the applications for accuracy and only approve those free and reduced applications which meet the eligibility guidelines set for the School Breakfast Program and National School Lunch Program. Furthermore, the same individual who determines the initial eligibility should not be the same person who performs the verification eligibility procedures.

Noncompliance and Material Weakness 2 CFR 200.320(b) provides procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. Due to deficiencies in the District?s internal controls over compliance requirements, thirty-six percent of the procurements tested for compliance did not contain the required price or rate quotations nor does the District?s procurement policy include a specific number of qualified sources to obtain quotes from. The District routinely ordered food and supplies from Tiffin Paper Company Food Service ($62,151), Alfred Nickels Bakery, Inc. ($13,161), and Toft's Dairy Inc. ($52,372) despite not receiving price quotations for these products or services. Furthermore, the District's procurement policy states "small purchase procedures require that price or rate quotations shall be obtained from an adequate number of qualified sources". The lack of required written policies and formal documentation of the above requirement not only violates federal grant requirements but also increases the risk of noncompliance with grant requirements going undetected in a timely manner. The District should review the federal regulations and ensure that all required policies are adequately addressed and followed and their procurement policy for small purchased should determine what an adequate number of qualified sources are.