Tennessee DOE outlines procurement review process for school nutrition programs

Tennessee Department of Education procurement staff led a webinar training explaining how the state conducts federally mandated procurement reviews of school food authorities' (SFAs) purchases made with federal school nutrition program funds. Procurement Specialist Elizabeth Hewson said the review focuses on compliance with federal, state and local procurement rules, documentation in the Tennessee Meals, Accounting and Claiming (TMAC) system and corrective‑action timelines.

The training explained why the reviews matter. "A procurement review is the federally mandated review of a school food authority's purchases for products and services paid for with federal school nutrition program funds," said Elizabeth Hewson, Procurement Specialist, Tennessee Department of Education. She said reviewers examine whether purchases are "allowable, allocable, necessary, and reasonable" and ensure "full and open competition and good stewardship of taxpayer funds."

State staff emphasized that the procurement review (PR) differs from an audit: "The PR is not an audit," Hewson said, adding the review is intended to check compliance and provide technical assistance rather than perform an accounting audit. The PR is scheduled on a five‑year cycle for each SFA and normally is a 100% off‑site desk review, with on‑site visits only for extenuating circumstances or at an SFA's request.

What reviewers ask for and when

Hewson walked attendees through the PR workflow in TMAC. SFAs receive an announcement letter, an entrance conference by Teams, and instructions for uploading initial documentation to TMAC. Reviewers use the prior school year’s complete 10‑month financial records for assessment; for example, records for 2024–25 would be reviewed during a 2025–26 PR. Key initial documents are the detailed general ledger and the vendor paid list for the nonprofit school food service account.

SFA staff must also provide written procurement procedures and a written code of conduct; if the SFA uses the state's templates and keeps them current, that can reduce findings. Hewson urged SFAs to involve finance and purchasing staff during entrance and exit conferences to speed document reconciliation.

The procurement table and vendor sampling

Hewson described the procurement table in TMAC as central to the review. SFAs enter one aggregated row per vendor (for example, "Amazon" with total annual purchases and number of invoices), and reviewers generate vendor samples from that table. "This is what your procurement review is based off of," she said.

Vendor selection follows USDA criteria: reviewers prioritize vendors by highest dollar value and generally request up to three invoices per selected vendor. The training noted typical exclusions from the procurement table — employee reimbursements, most utility companies (except certain waste services), cell phone accounts and employee benefit providers — though those may remain on the general ledger and vendor paid list submitted to reviewers.

Methods of procurement were explained, with guidance on how to classify vendors in the procurement table: micro‑purchases, small purchases (informal solicitations with two or more quotes), formal contracts (IFB/RFP) and food service management company (FSMC) contracts. Hewson clarified that the method recorded should reflect how the item was procured (for example, a district that awarded a formal contract for dairy should list that vendor under formal contracts even if annual spend was relatively small).

Group purchasing and third‑party entities

The training covered group purchasing organizations and co‑ops such as GPOs, NETCO/BULCO or similar entities. SFAs must indicate in the procurement table when purchases were made through a third‑party purchasing entity and attach interlocal or membership agreements and participation fee schedules when applicable.

Commodity processing and FSMC documentation

For SFAs using USDA Foods (commodities) and commodity processing, Hewson said reviewers will request the commodity processing form set and supporting documents required under USDA procurement rules (7 CFR related guidance referenced in the training). SFAs using FSMCs must retain and provide FSMC contract materials and monthly commodity reconciliation documents showing entitlement allocation, usage and inventory. Hewson specifically urged districts to keep processor‑level documentation rather than presenting a single lump‑sum payment.

Common findings and corrective action

If reviewers identify problems, they will tag findings and provide technical assistance. SFAs receive a findings report in TMAC and must submit corrective actions in the TMAC corrective action documents module. Corrective actions must be submitted within 30 operational days (weekends and holidays excluded), and a denied corrective action requires a second submission within 15 operational days. After satisfactory corrective responses, the state agency issues a letter of closure; SFAs then return to the five‑year PR cycle.

Practical tips and resources

Hewson encouraged SFAs to use the state's procurement templates on the School Nutrition procurement page, keep them updated, and save planning and forecasting documents so the procurement history can be demonstrated during reviews. She also recommended resources including the USDA Child Nutrition procurement pages and the Urban School Food Alliance RFP prototype work. The presenter said the slide deck and the recorded webinar would be shared after processing and a YouTube link would be provided.

Acknowledgements and next steps

Hewson and state staff offered to help districts who are unsure about procurement steps. "If you come to us saying, hey, I'm not doing this right, I'm not sure if I'm doing this right... we're going to help you," she said. The training closed with an invitation to contact regional consultants or the procurement specialist for follow‑up questions and with a reminder that the PR and AR schedules are coordinated to avoid overlap when possible.