FINDING 2023-003
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Programs: School Breakfast Program, National School Lunch Program
Assistance Listings Numbers: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): SY22, SY23
Pass-Through Entity: Indiana Department of Education
Compliance Requirements: Eligibility, Special Tests and Provisions - Verification of Free
and Reduced Price Applications (NSLP), Special Tests and
Provisions - Non-Profit School Food Service Accounts
Audit Finding: Material Weakness
Condition and Context
The School Corporation had not established effective internal controls that would likely be effective
in preventing, or detecting and correcting, noncompliance.
Eligibility
The School Corporation's policy is to have the Treasurer review and initial paper applications
processed by the individual school treasurers to ensure that the eligibility determination was
correct. However, six of the ten applications tested lacked documentation of this review. In
addition, there was no internal control in place over applications submitted online.
INDIANA STATE BOARD OF ACCOUNTS
18
BORDEN-HENRYVILLE SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Special Tests and Provisions - Verification of Free and Reduced Price Applications (NSLP)
The Treasurer performed the verification of free and reduced price applications without a documented
review or oversight process in place to ensure that applications selected for verification
were in compliance with requirements related to the program.
Special Tests and Provisions - Non-Profit School Food Service Accounts
The School Corporation did not have an internal control in place to ensure that reimbursements
for meals served were properly credited to the School Lunch fund.
The lack of internal controls for Eligibility and Special Tests and Provisions - Verification of Free
and Reduced Price Applications (NSLP) was isolated to the second year of the audit period. The lack of
internal controls over Special Tests and Provisions - School Food Accounts was systemic throughout the
audit period.
Criteria
2 CFR 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over the Federal award that provides
reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal
award. These internal controls should be in compliance with guidance in 'Standards for
Internal Control in the Federal Government' issued by the Comptroller General of the
United States or the 'Internal Control Integrated Framework', issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). . . ."
Cause
A proper system of internal controls was not designed by management of the School Corporation,
which would include segregation of key functions. Embedded within a properly designed and implemented
internal control system should be internal controls consisting of policies and procedures. Policies reflect
the School Corporation's management statements of what should be done to effect internal controls, and
procedures should consist of actions that would implement these policies.
Effect
Without the proper design or implementation of the components of a system of internal controls,
including policies and procedures that provide segregation of duties and additional oversight as needed,
the internal control system cannot be capable of effectively preventing, or detecting and correcting, material
noncompliance.
Questioned Costs
There were no questioned costs identified.
INDIANA STATE BOARD OF ACCOUNTS
19
BORDEN-HENRYVILLE SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Recommendation
We recommended that management of the School Corporation design and implement a proper
system of internal controls, including policies and procedures that would provide segregation of duties to
ensure appropriate reviews, approvals, and oversight are taking place.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
INDIANA STATE BOARD OF ACCOUNTS
20
FINDING 2023-003
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Programs: School Breakfast Program, National School Lunch Program
Assistance Listings Numbers: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): SY22, SY23
Pass-Through Entity: Indiana Department of Education
Compliance Requirements: Eligibility, Special Tests and Provisions - Verification of Free
and Reduced Price Applications (NSLP), Special Tests and
Provisions - Non-Profit School Food Service Accounts
Audit Finding: Material Weakness
Condition and Context
The School Corporation had not established effective internal controls that would likely be effective
in preventing, or detecting and correcting, noncompliance.
Eligibility
The School Corporation's policy is to have the Treasurer review and initial paper applications
processed by the individual school treasurers to ensure that the eligibility determination was
correct. However, six of the ten applications tested lacked documentation of this review. In
addition, there was no internal control in place over applications submitted online.
INDIANA STATE BOARD OF ACCOUNTS
18
BORDEN-HENRYVILLE SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Special Tests and Provisions - Verification of Free and Reduced Price Applications (NSLP)
The Treasurer performed the verification of free and reduced price applications without a documented
review or oversight process in place to ensure that applications selected for verification
were in compliance with requirements related to the program.
Special Tests and Provisions - Non-Profit School Food Service Accounts
The School Corporation did not have an internal control in place to ensure that reimbursements
for meals served were properly credited to the School Lunch fund.
The lack of internal controls for Eligibility and Special Tests and Provisions - Verification of Free
and Reduced Price Applications (NSLP) was isolated to the second year of the audit period. The lack of
internal controls over Special Tests and Provisions - School Food Accounts was systemic throughout the
audit period.
Criteria
2 CFR 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over the Federal award that provides
reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal
award. These internal controls should be in compliance with guidance in 'Standards for
Internal Control in the Federal Government' issued by the Comptroller General of the
United States or the 'Internal Control Integrated Framework', issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). . . ."
Cause
A proper system of internal controls was not designed by management of the School Corporation,
which would include segregation of key functions. Embedded within a properly designed and implemented
internal control system should be internal controls consisting of policies and procedures. Policies reflect
the School Corporation's management statements of what should be done to effect internal controls, and
procedures should consist of actions that would implement these policies.
Effect
Without the proper design or implementation of the components of a system of internal controls,
including policies and procedures that provide segregation of duties and additional oversight as needed,
the internal control system cannot be capable of effectively preventing, or detecting and correcting, material
noncompliance.
Questioned Costs
There were no questioned costs identified.
INDIANA STATE BOARD OF ACCOUNTS
19
BORDEN-HENRYVILLE SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Recommendation
We recommended that management of the School Corporation design and implement a proper
system of internal controls, including policies and procedures that would provide segregation of duties to
ensure appropriate reviews, approvals, and oversight are taking place.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
INDIANA STATE BOARD OF ACCOUNTS
20
FINDING 2023-003
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Programs: School Breakfast Program, National School Lunch Program
Assistance Listings Numbers: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): SY22, SY23
Pass-Through Entity: Indiana Department of Education
Compliance Requirements: Eligibility, Special Tests and Provisions - Verification of Free
and Reduced Price Applications (NSLP), Special Tests and
Provisions - Non-Profit School Food Service Accounts
Audit Finding: Material Weakness
Condition and Context
The School Corporation had not established effective internal controls that would likely be effective
in preventing, or detecting and correcting, noncompliance.
Eligibility
The School Corporation's policy is to have the Treasurer review and initial paper applications
processed by the individual school treasurers to ensure that the eligibility determination was
correct. However, six of the ten applications tested lacked documentation of this review. In
addition, there was no internal control in place over applications submitted online.
INDIANA STATE BOARD OF ACCOUNTS
18
BORDEN-HENRYVILLE SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Special Tests and Provisions - Verification of Free and Reduced Price Applications (NSLP)
The Treasurer performed the verification of free and reduced price applications without a documented
review or oversight process in place to ensure that applications selected for verification
were in compliance with requirements related to the program.
Special Tests and Provisions - Non-Profit School Food Service Accounts
The School Corporation did not have an internal control in place to ensure that reimbursements
for meals served were properly credited to the School Lunch fund.
The lack of internal controls for Eligibility and Special Tests and Provisions - Verification of Free
and Reduced Price Applications (NSLP) was isolated to the second year of the audit period. The lack of
internal controls over Special Tests and Provisions - School Food Accounts was systemic throughout the
audit period.
Criteria
2 CFR 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over the Federal award that provides
reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal
award. These internal controls should be in compliance with guidance in 'Standards for
Internal Control in the Federal Government' issued by the Comptroller General of the
United States or the 'Internal Control Integrated Framework', issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). . . ."
Cause
A proper system of internal controls was not designed by management of the School Corporation,
which would include segregation of key functions. Embedded within a properly designed and implemented
internal control system should be internal controls consisting of policies and procedures. Policies reflect
the School Corporation's management statements of what should be done to effect internal controls, and
procedures should consist of actions that would implement these policies.
Effect
Without the proper design or implementation of the components of a system of internal controls,
including policies and procedures that provide segregation of duties and additional oversight as needed,
the internal control system cannot be capable of effectively preventing, or detecting and correcting, material
noncompliance.
Questioned Costs
There were no questioned costs identified.
INDIANA STATE BOARD OF ACCOUNTS
19
BORDEN-HENRYVILLE SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Recommendation
We recommended that management of the School Corporation design and implement a proper
system of internal controls, including policies and procedures that would provide segregation of duties to
ensure appropriate reviews, approvals, and oversight are taking place.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
INDIANA STATE BOARD OF ACCOUNTS
20
FINDING 2023-003
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Programs: School Breakfast Program, National School Lunch Program
Assistance Listings Numbers: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): SY22, SY23
Pass-Through Entity: Indiana Department of Education
Compliance Requirements: Eligibility, Special Tests and Provisions - Verification of Free
and Reduced Price Applications (NSLP), Special Tests and
Provisions - Non-Profit School Food Service Accounts
Audit Finding: Material Weakness
Condition and Context
The School Corporation had not established effective internal controls that would likely be effective
in preventing, or detecting and correcting, noncompliance.
Eligibility
The School Corporation's policy is to have the Treasurer review and initial paper applications
processed by the individual school treasurers to ensure that the eligibility determination was
correct. However, six of the ten applications tested lacked documentation of this review. In
addition, there was no internal control in place over applications submitted online.
INDIANA STATE BOARD OF ACCOUNTS
18
BORDEN-HENRYVILLE SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Special Tests and Provisions - Verification of Free and Reduced Price Applications (NSLP)
The Treasurer performed the verification of free and reduced price applications without a documented
review or oversight process in place to ensure that applications selected for verification
were in compliance with requirements related to the program.
Special Tests and Provisions - Non-Profit School Food Service Accounts
The School Corporation did not have an internal control in place to ensure that reimbursements
for meals served were properly credited to the School Lunch fund.
The lack of internal controls for Eligibility and Special Tests and Provisions - Verification of Free
and Reduced Price Applications (NSLP) was isolated to the second year of the audit period. The lack of
internal controls over Special Tests and Provisions - School Food Accounts was systemic throughout the
audit period.
Criteria
2 CFR 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over the Federal award that provides
reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal
award. These internal controls should be in compliance with guidance in 'Standards for
Internal Control in the Federal Government' issued by the Comptroller General of the
United States or the 'Internal Control Integrated Framework', issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). . . ."
Cause
A proper system of internal controls was not designed by management of the School Corporation,
which would include segregation of key functions. Embedded within a properly designed and implemented
internal control system should be internal controls consisting of policies and procedures. Policies reflect
the School Corporation's management statements of what should be done to effect internal controls, and
procedures should consist of actions that would implement these policies.
Effect
Without the proper design or implementation of the components of a system of internal controls,
including policies and procedures that provide segregation of duties and additional oversight as needed,
the internal control system cannot be capable of effectively preventing, or detecting and correcting, material
noncompliance.
Questioned Costs
There were no questioned costs identified.
INDIANA STATE BOARD OF ACCOUNTS
19
BORDEN-HENRYVILLE SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Recommendation
We recommended that management of the School Corporation design and implement a proper
system of internal controls, including policies and procedures that would provide segregation of duties to
ensure appropriate reviews, approvals, and oversight are taking place.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
INDIANA STATE BOARD OF ACCOUNTS
20
FINDING 2023-003
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Programs: School Breakfast Program, National School Lunch Program
Assistance Listings Numbers: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): SY22, SY23
Pass-Through Entity: Indiana Department of Education
Compliance Requirements: Eligibility, Special Tests and Provisions - Verification of Free
and Reduced Price Applications (NSLP), Special Tests and
Provisions - Non-Profit School Food Service Accounts
Audit Finding: Material Weakness
Condition and Context
The School Corporation had not established effective internal controls that would likely be effective
in preventing, or detecting and correcting, noncompliance.
Eligibility
The School Corporation's policy is to have the Treasurer review and initial paper applications
processed by the individual school treasurers to ensure that the eligibility determination was
correct. However, six of the ten applications tested lacked documentation of this review. In
addition, there was no internal control in place over applications submitted online.
INDIANA STATE BOARD OF ACCOUNTS
18
BORDEN-HENRYVILLE SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Special Tests and Provisions - Verification of Free and Reduced Price Applications (NSLP)
The Treasurer performed the verification of free and reduced price applications without a documented
review or oversight process in place to ensure that applications selected for verification
were in compliance with requirements related to the program.
Special Tests and Provisions - Non-Profit School Food Service Accounts
The School Corporation did not have an internal control in place to ensure that reimbursements
for meals served were properly credited to the School Lunch fund.
The lack of internal controls for Eligibility and Special Tests and Provisions - Verification of Free
and Reduced Price Applications (NSLP) was isolated to the second year of the audit period. The lack of
internal controls over Special Tests and Provisions - School Food Accounts was systemic throughout the
audit period.
Criteria
2 CFR 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over the Federal award that provides
reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal
award. These internal controls should be in compliance with guidance in 'Standards for
Internal Control in the Federal Government' issued by the Comptroller General of the
United States or the 'Internal Control Integrated Framework', issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). . . ."
Cause
A proper system of internal controls was not designed by management of the School Corporation,
which would include segregation of key functions. Embedded within a properly designed and implemented
internal control system should be internal controls consisting of policies and procedures. Policies reflect
the School Corporation's management statements of what should be done to effect internal controls, and
procedures should consist of actions that would implement these policies.
Effect
Without the proper design or implementation of the components of a system of internal controls,
including policies and procedures that provide segregation of duties and additional oversight as needed,
the internal control system cannot be capable of effectively preventing, or detecting and correcting, material
noncompliance.
Questioned Costs
There were no questioned costs identified.
INDIANA STATE BOARD OF ACCOUNTS
19
BORDEN-HENRYVILLE SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Recommendation
We recommended that management of the School Corporation design and implement a proper
system of internal controls, including policies and procedures that would provide segregation of duties to
ensure appropriate reviews, approvals, and oversight are taking place.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
INDIANA STATE BOARD OF ACCOUNTS
20
FINDING 2023-003
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Programs: School Breakfast Program, National School Lunch Program
Assistance Listings Numbers: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): SY22, SY23
Pass-Through Entity: Indiana Department of Education
Compliance Requirements: Eligibility, Special Tests and Provisions - Verification of Free
and Reduced Price Applications (NSLP), Special Tests and
Provisions - Non-Profit School Food Service Accounts
Audit Finding: Material Weakness
Condition and Context
The School Corporation had not established effective internal controls that would likely be effective
in preventing, or detecting and correcting, noncompliance.
Eligibility
The School Corporation's policy is to have the Treasurer review and initial paper applications
processed by the individual school treasurers to ensure that the eligibility determination was
correct. However, six of the ten applications tested lacked documentation of this review. In
addition, there was no internal control in place over applications submitted online.
INDIANA STATE BOARD OF ACCOUNTS
18
BORDEN-HENRYVILLE SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Special Tests and Provisions - Verification of Free and Reduced Price Applications (NSLP)
The Treasurer performed the verification of free and reduced price applications without a documented
review or oversight process in place to ensure that applications selected for verification
were in compliance with requirements related to the program.
Special Tests and Provisions - Non-Profit School Food Service Accounts
The School Corporation did not have an internal control in place to ensure that reimbursements
for meals served were properly credited to the School Lunch fund.
The lack of internal controls for Eligibility and Special Tests and Provisions - Verification of Free
and Reduced Price Applications (NSLP) was isolated to the second year of the audit period. The lack of
internal controls over Special Tests and Provisions - School Food Accounts was systemic throughout the
audit period.
Criteria
2 CFR 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over the Federal award that provides
reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal
award. These internal controls should be in compliance with guidance in 'Standards for
Internal Control in the Federal Government' issued by the Comptroller General of the
United States or the 'Internal Control Integrated Framework', issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). . . ."
Cause
A proper system of internal controls was not designed by management of the School Corporation,
which would include segregation of key functions. Embedded within a properly designed and implemented
internal control system should be internal controls consisting of policies and procedures. Policies reflect
the School Corporation's management statements of what should be done to effect internal controls, and
procedures should consist of actions that would implement these policies.
Effect
Without the proper design or implementation of the components of a system of internal controls,
including policies and procedures that provide segregation of duties and additional oversight as needed,
the internal control system cannot be capable of effectively preventing, or detecting and correcting, material
noncompliance.
Questioned Costs
There were no questioned costs identified.
INDIANA STATE BOARD OF ACCOUNTS
19
BORDEN-HENRYVILLE SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Recommendation
We recommended that management of the School Corporation design and implement a proper
system of internal controls, including policies and procedures that would provide segregation of duties to
ensure appropriate reviews, approvals, and oversight are taking place.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
INDIANA STATE BOARD OF ACCOUNTS
20
FINDING 2023-003
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Programs: School Breakfast Program, National School Lunch Program
Assistance Listings Numbers: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): SY22, SY23
Pass-Through Entity: Indiana Department of Education
Compliance Requirements: Eligibility, Special Tests and Provisions - Verification of Free
and Reduced Price Applications (NSLP), Special Tests and
Provisions - Non-Profit School Food Service Accounts
Audit Finding: Material Weakness
Condition and Context
The School Corporation had not established effective internal controls that would likely be effective
in preventing, or detecting and correcting, noncompliance.
Eligibility
The School Corporation's policy is to have the Treasurer review and initial paper applications
processed by the individual school treasurers to ensure that the eligibility determination was
correct. However, six of the ten applications tested lacked documentation of this review. In
addition, there was no internal control in place over applications submitted online.
INDIANA STATE BOARD OF ACCOUNTS
18
BORDEN-HENRYVILLE SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Special Tests and Provisions - Verification of Free and Reduced Price Applications (NSLP)
The Treasurer performed the verification of free and reduced price applications without a documented
review or oversight process in place to ensure that applications selected for verification
were in compliance with requirements related to the program.
Special Tests and Provisions - Non-Profit School Food Service Accounts
The School Corporation did not have an internal control in place to ensure that reimbursements
for meals served were properly credited to the School Lunch fund.
The lack of internal controls for Eligibility and Special Tests and Provisions - Verification of Free
and Reduced Price Applications (NSLP) was isolated to the second year of the audit period. The lack of
internal controls over Special Tests and Provisions - School Food Accounts was systemic throughout the
audit period.
Criteria
2 CFR 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over the Federal award that provides
reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal
award. These internal controls should be in compliance with guidance in 'Standards for
Internal Control in the Federal Government' issued by the Comptroller General of the
United States or the 'Internal Control Integrated Framework', issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). . . ."
Cause
A proper system of internal controls was not designed by management of the School Corporation,
which would include segregation of key functions. Embedded within a properly designed and implemented
internal control system should be internal controls consisting of policies and procedures. Policies reflect
the School Corporation's management statements of what should be done to effect internal controls, and
procedures should consist of actions that would implement these policies.
Effect
Without the proper design or implementation of the components of a system of internal controls,
including policies and procedures that provide segregation of duties and additional oversight as needed,
the internal control system cannot be capable of effectively preventing, or detecting and correcting, material
noncompliance.
Questioned Costs
There were no questioned costs identified.
INDIANA STATE BOARD OF ACCOUNTS
19
BORDEN-HENRYVILLE SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Recommendation
We recommended that management of the School Corporation design and implement a proper
system of internal controls, including policies and procedures that would provide segregation of duties to
ensure appropriate reviews, approvals, and oversight are taking place.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
INDIANA STATE BOARD OF ACCOUNTS
20
FINDING 2023-003
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Programs: School Breakfast Program, National School Lunch Program
Assistance Listings Numbers: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): SY22, SY23
Pass-Through Entity: Indiana Department of Education
Compliance Requirements: Eligibility, Special Tests and Provisions - Verification of Free
and Reduced Price Applications (NSLP), Special Tests and
Provisions - Non-Profit School Food Service Accounts
Audit Finding: Material Weakness
Condition and Context
The School Corporation had not established effective internal controls that would likely be effective
in preventing, or detecting and correcting, noncompliance.
Eligibility
The School Corporation's policy is to have the Treasurer review and initial paper applications
processed by the individual school treasurers to ensure that the eligibility determination was
correct. However, six of the ten applications tested lacked documentation of this review. In
addition, there was no internal control in place over applications submitted online.
INDIANA STATE BOARD OF ACCOUNTS
18
BORDEN-HENRYVILLE SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Special Tests and Provisions - Verification of Free and Reduced Price Applications (NSLP)
The Treasurer performed the verification of free and reduced price applications without a documented
review or oversight process in place to ensure that applications selected for verification
were in compliance with requirements related to the program.
Special Tests and Provisions - Non-Profit School Food Service Accounts
The School Corporation did not have an internal control in place to ensure that reimbursements
for meals served were properly credited to the School Lunch fund.
The lack of internal controls for Eligibility and Special Tests and Provisions - Verification of Free
and Reduced Price Applications (NSLP) was isolated to the second year of the audit period. The lack of
internal controls over Special Tests and Provisions - School Food Accounts was systemic throughout the
audit period.
Criteria
2 CFR 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over the Federal award that provides
reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal
award. These internal controls should be in compliance with guidance in 'Standards for
Internal Control in the Federal Government' issued by the Comptroller General of the
United States or the 'Internal Control Integrated Framework', issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). . . ."
Cause
A proper system of internal controls was not designed by management of the School Corporation,
which would include segregation of key functions. Embedded within a properly designed and implemented
internal control system should be internal controls consisting of policies and procedures. Policies reflect
the School Corporation's management statements of what should be done to effect internal controls, and
procedures should consist of actions that would implement these policies.
Effect
Without the proper design or implementation of the components of a system of internal controls,
including policies and procedures that provide segregation of duties and additional oversight as needed,
the internal control system cannot be capable of effectively preventing, or detecting and correcting, material
noncompliance.
Questioned Costs
There were no questioned costs identified.
INDIANA STATE BOARD OF ACCOUNTS
19
BORDEN-HENRYVILLE SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Recommendation
We recommended that management of the School Corporation design and implement a proper
system of internal controls, including policies and procedures that would provide segregation of duties to
ensure appropriate reviews, approvals, and oversight are taking place.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
INDIANA STATE BOARD OF ACCOUNTS
20
FINDING 2023-003
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Programs: School Breakfast Program, National School Lunch Program
Assistance Listings Numbers: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): SY22, SY23
Pass-Through Entity: Indiana Department of Education
Compliance Requirements: Eligibility, Special Tests and Provisions - Verification of Free
and Reduced Price Applications (NSLP), Special Tests and
Provisions - Non-Profit School Food Service Accounts
Audit Finding: Material Weakness
Condition and Context
The School Corporation had not established effective internal controls that would likely be effective
in preventing, or detecting and correcting, noncompliance.
Eligibility
The School Corporation's policy is to have the Treasurer review and initial paper applications
processed by the individual school treasurers to ensure that the eligibility determination was
correct. However, six of the ten applications tested lacked documentation of this review. In
addition, there was no internal control in place over applications submitted online.
INDIANA STATE BOARD OF ACCOUNTS
18
BORDEN-HENRYVILLE SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Special Tests and Provisions - Verification of Free and Reduced Price Applications (NSLP)
The Treasurer performed the verification of free and reduced price applications without a documented
review or oversight process in place to ensure that applications selected for verification
were in compliance with requirements related to the program.
Special Tests and Provisions - Non-Profit School Food Service Accounts
The School Corporation did not have an internal control in place to ensure that reimbursements
for meals served were properly credited to the School Lunch fund.
The lack of internal controls for Eligibility and Special Tests and Provisions - Verification of Free
and Reduced Price Applications (NSLP) was isolated to the second year of the audit period. The lack of
internal controls over Special Tests and Provisions - School Food Accounts was systemic throughout the
audit period.
Criteria
2 CFR 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over the Federal award that provides
reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal
award. These internal controls should be in compliance with guidance in 'Standards for
Internal Control in the Federal Government' issued by the Comptroller General of the
United States or the 'Internal Control Integrated Framework', issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). . . ."
Cause
A proper system of internal controls was not designed by management of the School Corporation,
which would include segregation of key functions. Embedded within a properly designed and implemented
internal control system should be internal controls consisting of policies and procedures. Policies reflect
the School Corporation's management statements of what should be done to effect internal controls, and
procedures should consist of actions that would implement these policies.
Effect
Without the proper design or implementation of the components of a system of internal controls,
including policies and procedures that provide segregation of duties and additional oversight as needed,
the internal control system cannot be capable of effectively preventing, or detecting and correcting, material
noncompliance.
Questioned Costs
There were no questioned costs identified.
INDIANA STATE BOARD OF ACCOUNTS
19
BORDEN-HENRYVILLE SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Recommendation
We recommended that management of the School Corporation design and implement a proper
system of internal controls, including policies and procedures that would provide segregation of duties to
ensure appropriate reviews, approvals, and oversight are taking place.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
INDIANA STATE BOARD OF ACCOUNTS
20
FINDING 2023-003
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Programs: School Breakfast Program, National School Lunch Program
Assistance Listings Numbers: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): SY22, SY23
Pass-Through Entity: Indiana Department of Education
Compliance Requirements: Eligibility, Special Tests and Provisions - Verification of Free
and Reduced Price Applications (NSLP), Special Tests and
Provisions - Non-Profit School Food Service Accounts
Audit Finding: Material Weakness
Condition and Context
The School Corporation had not established effective internal controls that would likely be effective
in preventing, or detecting and correcting, noncompliance.
Eligibility
The School Corporation's policy is to have the Treasurer review and initial paper applications
processed by the individual school treasurers to ensure that the eligibility determination was
correct. However, six of the ten applications tested lacked documentation of this review. In
addition, there was no internal control in place over applications submitted online.
INDIANA STATE BOARD OF ACCOUNTS
18
BORDEN-HENRYVILLE SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Special Tests and Provisions - Verification of Free and Reduced Price Applications (NSLP)
The Treasurer performed the verification of free and reduced price applications without a documented
review or oversight process in place to ensure that applications selected for verification
were in compliance with requirements related to the program.
Special Tests and Provisions - Non-Profit School Food Service Accounts
The School Corporation did not have an internal control in place to ensure that reimbursements
for meals served were properly credited to the School Lunch fund.
The lack of internal controls for Eligibility and Special Tests and Provisions - Verification of Free
and Reduced Price Applications (NSLP) was isolated to the second year of the audit period. The lack of
internal controls over Special Tests and Provisions - School Food Accounts was systemic throughout the
audit period.
Criteria
2 CFR 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over the Federal award that provides
reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal
award. These internal controls should be in compliance with guidance in 'Standards for
Internal Control in the Federal Government' issued by the Comptroller General of the
United States or the 'Internal Control Integrated Framework', issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). . . ."
Cause
A proper system of internal controls was not designed by management of the School Corporation,
which would include segregation of key functions. Embedded within a properly designed and implemented
internal control system should be internal controls consisting of policies and procedures. Policies reflect
the School Corporation's management statements of what should be done to effect internal controls, and
procedures should consist of actions that would implement these policies.
Effect
Without the proper design or implementation of the components of a system of internal controls,
including policies and procedures that provide segregation of duties and additional oversight as needed,
the internal control system cannot be capable of effectively preventing, or detecting and correcting, material
noncompliance.
Questioned Costs
There were no questioned costs identified.
INDIANA STATE BOARD OF ACCOUNTS
19
BORDEN-HENRYVILLE SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Recommendation
We recommended that management of the School Corporation design and implement a proper
system of internal controls, including policies and procedures that would provide segregation of duties to
ensure appropriate reviews, approvals, and oversight are taking place.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
INDIANA STATE BOARD OF ACCOUNTS
20