For procurements completed beginning July 1, 2020 and a part of fiscal year 2021 audits, school districts have a new USFR procurement reporting question as follows “school districts demonstrating that they have taken steps to ensure that employees have not violated the gifting prohibitions”. But what are the gifting prohibitions?
For school district employees A.R.S. §15-213(N) states that “A person who supervises or participates in contracts, purchases, payments, claims or other financial transactions, or a person who supervises or participates in the planning, recommending, selecting or contracting for materials, services, goods, construction or construction services of a school district or school purchasing cooperative is guilty of a class 6 felony if the person solicits, accepts or agrees to accept any personal gift or benefit with a value of $300 or more from a person or vendor that has secured or has taken steps to secure a contract, purchase, payment, claim or financial transaction with the school district or school purchasing cooperative. Soliciting, accepting, or agreeing to accept any personal gift or benefit with a value of less than $300 is a class 1 misdemeanor. A gift or benefit does not include an item of nominal value such as a greeting card, t-shirt, mug or pen”.
In short, district officials should train employees about the gifting prohibitions and should require any employees involved in the procurement process to attest that they have not violated the gifting prohibitions. This can be through having any involved employees sign an acknowledgement that they have attended trainings and certify that that they have not engaged in any gifting activities with the vendors bidding. These acknowledgements should be kept within the procurement documents held by the district and made available to Auditors during procurement test work. This question follows the Auditors Generals continued efforts to ensure school district officials and employees are not favoring specific vendors.
Please contact your Henry+Horne advisor to assist with any issue you may have with the new reporting question.