Missouri State Auditor's Office

Opportunities exist to improve school district purchasing and procurement practices

Missouri's 524 public school districts spend approximately $2 billion annually on goods and services that can be competitively bid. We focused audit objectives on (1) determining whether school districts have maximized competitive procurement opportunities, (2) barriers that impact bidding opportunities and results, and (3) identifying potential improvements to purchasing practices. To accomplish our objectives we visited a sample of 15 school districts based on their student enrollment and location in the state.

Districts did not always use an adequate competitive selection process

Ten of the 15 districts visited did not competitively select at least one professional service contract we reviewed. For other goods, inconsistent district procurement procedures existed. State law requires construction expenditures exceeding $15,000 to be competitively bid and, with the exception of insurance, architectural and banking services, is silent regarding all other purchases of goods and services at the school district level. (See page 5)

Procurement guidelines have not been established at the state level

The state has not established any type of procurement guidelines to help school districts regarding procurement policies. Other states, such as Texas, Florida and Arkansas, have implemented or are implementing legislation intended to increase the fiscal accountability of school districts. These states have established financial management "best practices," which include guidelines on procurement. (See page 6)

Access to electronic bid solicitation system could benefit schools

North Carolina and Louisiana have established Internet-based electronic bid solicitation systems for state agency use which allow government entity purchasers, including school districts, to access vendors across the state.

Missouri maintains a purchasing system that notifies vendors of potential state agency requests for bids. However, this system is not Internet-based and can only be accessed by state agencies. A Division of Purchasing official stated this system is in the process of being updated, but no plans had been made to make it available for use by other government entities. (See page 6)

Procurement procedure improvements could enhance accountability and reduce expenditures

We observed situations where the competitive selection process and other procedures have been inadequate or could be improved. Districts had not (1) developed formalized procurement policies, (2) maintained adequate documentation of the procurement process, (3) fully taken advantage of cooperative purchasing opportunities, (4) taken advantage of electronic ordering and approval systems, (5) coordinated school supply orders across the district to maximize purchasing power, and (6) always considered state purchasing resources. (See page 7)