Internal Control Tip: Using Co-Ops

Whenever you need to buy something in 2019, all you have to do is ask Alexa and she will have that shipment on your doorstep by the very next day.  We live in the world of Prime, which means many of us have traded in extreme couponing for convenient one-click shopping from your couch.  Whenever it comes to making purchases from cooperatives (co-ops), they have already done much of the extreme couponing for you.  This is why many of us might think we can go straight to a cooperative to make a purchase whenever we need something.

Are you getting the best deal?  Maybe.

Should you still shop around for the best prices?  Yes.

Many Districts will still require quotes when making purchases over established thresholds, whether the purchase is through a cooperative or not.  Think of the purchase as if you were spending your own money…

Do you just log onto your Prime app and click “buy it now”?  Never mind – don’t answer that.

Do your due diligence – shop around.  Don’t expect that your first search is going to give you the best deal and definitely don’t expect the most convenient search will give you the best deal.

You must also remember that you don’t have free reign to buy goods whenever you want if you see that item listed on an approved co-op vendor.  Be sure to always follow your District’s procurement policies and get an approved purchase order in advance when required to do so.

What if you are making purchases from co-op vendors with federal funds?  Don’t forget about your best friend, EDGAR (i.e. the Uniform Guidance as adopted by the Education Department General Administrative Regulations).

All purchases with federal funds must follow EDGAR as well as state and local requirements (note TEA has determined the thresholds below to be in the aggregate over a one year period):

  • Purchases over $10,000 require quotes from an adequate number of qualified sources.
  • Purchases over $50,000 require a competitive purchasing method such as a bid or cooperative.
  • Purchases over $250,000 require an independent estimate and a cost or price analysis.

It is important that you verify the co-op’s compliance with EDGAR on its website.  Keep in mind that some cooperatives are not completing the independent estimate and cost or price analysis. They specifically state that the end user is responsible for those steps.

One more rule of thumb is that all co-ops must be approved by the Board in advance as required by Chapter 791 of the Texas Government Code.  It is also best practice for the Board to review a list of all cooperatives utilized on an annual basis.

So, while you don’t have to spend your Sundays clipping coupons from the newspaper anymore, there are many other ways you can make sure you get the best bang for the taxpayer’s buck.

 

Whitley Penn contributes to the TASBO Internal Control Tips at www.tasbo.org/IC-Tips

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