Lessons from a Monitoring Visit – Part 2

Last month I shared a few lessons learned from a monitoring visit.  In that blog, I discussed procedures and documentation that could prevent a monitoring finding on indicator H-1.  This month, I  want to continue that discussion since there has been a change in the procurement thresholds.  During this past legislative session, the Mississippi Senate passed bill MS SB2371 (https://legiscan.com/MS/text/SB2371/2022).  The governor signed the bill, which became law on July 1, 2022.  The significant impact of this bill is that it changes the threshold for small purchases.  The new commodity threshold is $5,000 to $75,000.  The threshold for services did not change; it is still $10,000 to $250,000.  The commodity threshold change will require districts to change any district policy and the Federal Programs Procedure Manual if the procurement amounts have been delineated.  Remember that the most restrictive policy applies.  The most restrictive policy means that if the state purchasing law has changed, but the district has not changed its written policies and procedures, the district must follow the most restrictive policy/procedure.  So be sure to update your district board policies and procedure manual.  In addition, the other procurement change addressed by the law is that school districts no longer have to use reverse auction “only when purchasing copyrighted educational supplemental materials and software as a service product.”  The district may use a Request for Qualifications which promotes open competition for these purchases.

Another monitoring requirement to pay close attention to is H-4.  This indicator states, “The LEA/Subgrantee has board policy and/or procedures to review and/or audit the content of its procurement files to ensure completeness of its procurement records and outlines the frequency that it is performed.”   The key to this indicator is the “frequency” of the review.  Your procedures should have a time frame for checking if procurement files are complete.  The procurement file should include the paperwork from requisition through check payment.  The indicator does not say how frequently the federal programs office should check the files but that the files should be checked.  I suggest you create a checksheet with all required documents, including the quotes/bid selection, evidence of SAM.gov documentation, and receipt of items listed.  This checksheet should indicate the purchase order number, be signed and dated, and attached to the procurement file and a copy of the checksheet kept for monitoring documentation.  

One additional indicator to discuss at this time is H-11, “The LEA/Subgrantee has policy and/or procedures for ensuring that it does not contract with parties who have been suspended or debarred.”  The key to this indicator is ensuring your policy and/or procedure state your process for determining suspension or debarment.  Does your procedure state that all vendors are checked or that vendors who purchase at a specific dollar level are checked?  EDGAR 3485.220(c) states that the verification procedure must occur if the amount of the contract or transaction is expected to equal or exceed $25,000.  You may wish to consider using the dollar threshold for the requirement; however, I highly recommend that you make it a habit to check all vendors.  That way, if a vendor exceeds the dollar amount after several purchases, you are covered, and on the other hand, if you do not verify it for a smaller purchase, a finding should not result.

More on this topic later.  In the meantime, I hope your summer is going well and that you find time for some rest and relaxation.