Do Your Due Diligence!

by Katherine Shell, CPA, Audit Manager

Posted on March 11, 2026

Has someone ever asked you: “Do your due diligence?” It is a common phrase in the business office and more specifically, purchasing department. Today, we will discuss the importance of this phrase and performing due diligence as it relates to school district procurement requirements and the utilization of purchasing cooperatives.

Due diligence is the process of obtaining and reviewing documentation to verify that the procuring entity procured contracts pursuant to the School District Procurement Rules and determining that the contract price and terms are favorable to the district to receive the best value for the good or service desired. To put another way, the school district needs to check the work of the procuring entity! While utilizing a cooperative often creates efficiencies and reduces administrative burden, it does not eliminate all responsibility–the school district must ensure all due diligence requirements are done in accordance with the School District Procurement Rules . The level of detail of due diligence needed largely depends on the procuring entity the District elects to work with. While it is not necessary for Districts to perform due diligence on every single cooperative contract, the level of detail in due diligence work depends on the complexity of the cooperative or lead district. Whether or not a cooperative or lead district has undergone a systematic review may also play a role in the level of detail in due diligence requirements.

A common concern when it comes to cooperative contracts procurement is whether each cooperative contract must have due diligence performed over it. A sample of purchases from cooperative contracts as well as a sample from each cooperative or lead district may be permissible, too. It is always best to review the School District Procurement Rules when implementing processes. Many school districts determine it more practical to perform due diligence over all cooperative contracts instead of creating a process to sample by cooperative and by contract within each cooperative. Another solution is the use of an outside entity (consultant) to assist in the performance of due diligence.

To actually complete the task of due diligence, school districts can use the USFR Compliance Questionnaire, a district-developed checklist, or another method that is permissible under the School District Procurement Rules. Reviewing actual contract documents over the procurement of the contract is the most in-depth way to complete due diligence.