School district procurement due diligence and written determinations

Within the procurement section of the USFR, multiple questions are centered around if a school district has maintained documentation showing due diligence and written determinations were completed regarding cooperative agreements used by the district. The Arizona Auditor General defines these as:

1. Due Diligence: The process of obtaining and reviewing documentation to verify that the procuring entity procured contracts pursuant to the School District Procurement Rules and determining that the contract price and terms are favorable to the district to receive the best value for the good or service desired.
2. Written Determinations are now an additional step in the due diligence process. Districts now must provide a rationale when selecting vendors on a cooperative agreement.

When a district is completing its due diligence, a district created checklist will suffice as documentation of where procurement personnel can go through. The checklist will also document that the district reviewed the cooperatives procurement compliance questionnaire. If the compliance questionnaire is unavailable, the district should review a sample of cooperative contract documents from the vendors such as:

• Bidder’s list
• Solicitation
• Offers received
• Vendor pricing
• Bid and offer evaluations
• Basis for cooperative contract award
• Cost analysis
• Review of cooperative contract terms and conditions

As mentioned before, the written determination can be the final step in the due diligence process. This is where district personnel can write a short two to three sentence rationale supporting why the cooperative/vendor is most advantageous to the district’s needs.

This documentation is important to have on file, and complete before the cooperative agreement is used for purchasing. The district official who completes these items should sign and date when completed to further back up the district’s documentation and for use in the upcoming audit.

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