Redpath Insights

Your Procurement Practices Could Cost You

by Melissa Johnson, CPA

April 5, 2017 โ€” Recently, a few cases have made the news regarding entities failing to meet procurement requirements. In some cases, entities have had to pay back millions of dollars because they did not meet these requirements. This serves as reminder of the importance of following the procurement standards when selecting vendors and contractors to work on projects that use federal or state funds.

Some key points to keep in mind during the general procurement process:

  1. Have a clearly documented procurement policy and supporting procedures which follow federal and state requirements.
    • Minnesota governmental entities should ensure its policies and procedures comply with the Uniform Municipal Contracting Law under Minnesota State Statute Section 471.345.
    • All entities making purchases under federal grant programs should ensure they are in compliance with Uniform Guidance under 2 CFR 200.318.
  2. Train procurement staff, finance staff, and board members on the procurement policies and procedures to help them understand the importance of following procurement regulations.
  3. Perform internal reviews to ensure procurement staff are following the outlined procurement policies and procedures.

When reviewing procurement policies and procedures:

  1. Ensure procedures are developed for procurements of different dollar ranges.
    • For Minnesota governmental entities:
      • Purchases from $25,000 to $100,000 - obtain 2 or more written quotations
      • Purchases over $100,000 โ€“ follow a sealed bid or competitive bidding process
    • For all entities making purchases under federal grant programs:
      1. Purchases between $3,500 and $150,000 โ€“ obtain 2 or more written quotations
      2. Purchases over $150,000 โ€“ follow a sealed bid or competitive bidding process
    • Document justification and obtain appropriate authorization for cases where the lowest quote or bid is not selected, or when a sole source procurement method is used.
    • Ensure procedures include full and open competition, and include affirmative steps to be sure that minority businesses, womenโ€™s enterprises, labor surplus area firms, and other disadvantaged business enterprises are solicited and used when possible.
    • Follow the Davis-Bacon Act for construction contracts in excess of $2,000 which are awarded under federal grant programs.
    • Document verification that vendors or contractors are not suspended or debarred by using the Excluded Parties List, which you can find at
    • Document the procurement method used, all quotes or bids received, cost or price analysis performed, selection of contract type, and qualified vendor or contractor selection.
Melissa Johnson, CPA

Melissa Johnson, CPA

Melissa Johnson, CPA, MBA, is a manager at Redpath and Company, where she specializes in the government/not-for-profit audit and accounting services area. Melissa has over 15 years of experience working with federal awards for governmental, not-for-profit, and commercial organizations. Prior to joining the Redpath and Company team, Melissa worked with the U.S. Defense Contract Audit Agency providing contract audit services to various governmental agencies. Melissa has served as a committee member for the National Seminar for Government Contracts and has provided training on federal compliance requirements, application of cost accounting standards, and internal control requirements necessary to administer federal contracts. Melissa is a holder of The Advanced Single Audit Certificate issued by the AICPA. The Advanced Single Audit Certificate requires the ability to evaluate and analyze the core concepts related to client acceptance, engagement planning, engagement analysis, concluding an engagement, and guiding principles for single audits at an advanced level as outlined in the AICPA Competency Framework: Governmental Auditing. Additionally, she has also provided single audit training at the MNCPA Audits of Local Governments Conference.