Audit 308251

MID-STATE CHILD CARE & NUTRITION SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION 3 – FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS SEPTEMBER 30, 2023 REFERENCE: 2023-101 REPEAT FINDING REFERENCE: 2022-001 CFDA NUMBER: 10.558 – CHILD AND ADULT CARE FOOD PROGRAM U.S. DEPARTMENT OF AGRICULTURE - FOOD AND NUTRITION - 2023 PASSED THROUGH ARIZONA STATE DEPARTMENT OF EDUCATION GRANT NUMBER 6AZ300003 QUESTIONED COSTS N/A CONDITION The following errors were noted during testing of FDCH Site Claims, the Sponsor’s Meal Served Report and 11 Day Care Home provider files for the months of March 2023 and September 2023: 1. For 4 of 11 provider files tested, menus were clerically inaccurate and did not support the meals claimed. This error occurred in March 2023 and September 2023. 2. For 1 of 11 provider files tested, more than 2 meals and 1 snack were claimed. This error occurred in March 2023. 3. For 2 of 11 provider files tested, meals were claimed when the child was not indicated as being present for the meal. This error occurred in March 2023. 4. For 1 of 11 provider files tested, meals were claimed when credible menu components were missing. This error occurred in September 2023. These errors resulted in the following revised meal counts: These variances resulted in an under payment (known questioned costs) of $5. However, after projecting the various types of errors over six meal categories for the entire year, likely questioned costs totaled $573. CRITERIA In accordance with the Arizona Department of Education, Day Care Home Compliance Manual, Revised June 2019, Chapter 10, Meal Requirements, Section 10.7 Other Meal Requirements, in order to claim a meal, the provider must abide by the following criteria: • The provider must serve a fully reimbursable meal that meets the meal pattern requirements and are supported by complete and up to date attendance, meal count, and menu records; • The child must be present and participate in the meal service; • All meal components must be served together; • The meal must be fully consumed on the premises in a congregate setting. Meals sent home with a child due to the parent picking up the child during meal service cannot be claimed; • Meal must be served during approved meal service time; • The provider can be reimbursed for a maximum of two meals and one snack or two snacks and one meal per child, per day; • Only children who are enrolled can be claimed and the number of children cannot exceed the allowable ratio; • Payment may be made for meals served to provider’s own child(ren) or foster children only when:  Their child(ren) are enrolled and participating in the child care program during the time of the meal service;  At least one enrolled, non-resident child is present and participating in the child care program;  The provider meets the family size income standards for free or reduced price meals; • Seconds may be served but are not reimbursable; and • If a school age child receives a breakfast, lunch or afterschool snack at school, a provider may not claim the same meal. In accordance with the Uniform Guidance, Compliance Supplement, Part 6 – Internal Control, the 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. EFFECT Program requirements were not complied with. Additionally, meal reimbursements were clerically inaccurate and the providers and sponsor were incorrectly reimbursed. CAUSE Although the internal controls were adequately designed, there were deficiencies in the execution of the controls. All errors occurred on paper menus, which have a higher risk of errors. RECOMMENDATION AND BENEFIT Menus should be reviewed to ensure all meals with the required components are claimed, and provider meal count sheets should be reviewed for clerical accuracy and completion, prior to the preparation of the reimbursement claim. These reviews should be documented. This will help ensure that program requirements are complied with and only eligible meals served to eligible participants are claimed for reimbursement. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.

MID-STATE CHILD CARE & NUTRITION SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION 3 – FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS SEPTEMBER 30, 2023 REFERENCE: 2023-101 REPEAT FINDING REFERENCE: 2022-001 CFDA NUMBER: 10.558 – CHILD AND ADULT CARE FOOD PROGRAM U.S. DEPARTMENT OF AGRICULTURE - FOOD AND NUTRITION - 2023 PASSED THROUGH ARIZONA STATE DEPARTMENT OF EDUCATION GRANT NUMBER 6AZ300003 QUESTIONED COSTS N/A CONDITION The following errors were noted during testing of FDCH Site Claims, the Sponsor’s Meal Served Report and 11 Day Care Home provider files for the months of March 2023 and September 2023: 1. For 4 of 11 provider files tested, menus were clerically inaccurate and did not support the meals claimed. This error occurred in March 2023 and September 2023. 2. For 1 of 11 provider files tested, more than 2 meals and 1 snack were claimed. This error occurred in March 2023. 3. For 2 of 11 provider files tested, meals were claimed when the child was not indicated as being present for the meal. This error occurred in March 2023. 4. For 1 of 11 provider files tested, meals were claimed when credible menu components were missing. This error occurred in September 2023. These errors resulted in the following revised meal counts: These variances resulted in an under payment (known questioned costs) of $5. However, after projecting the various types of errors over six meal categories for the entire year, likely questioned costs totaled $573. CRITERIA In accordance with the Arizona Department of Education, Day Care Home Compliance Manual, Revised June 2019, Chapter 10, Meal Requirements, Section 10.7 Other Meal Requirements, in order to claim a meal, the provider must abide by the following criteria: • The provider must serve a fully reimbursable meal that meets the meal pattern requirements and are supported by complete and up to date attendance, meal count, and menu records; • The child must be present and participate in the meal service; • All meal components must be served together; • The meal must be fully consumed on the premises in a congregate setting. Meals sent home with a child due to the parent picking up the child during meal service cannot be claimed; • Meal must be served during approved meal service time; • The provider can be reimbursed for a maximum of two meals and one snack or two snacks and one meal per child, per day; • Only children who are enrolled can be claimed and the number of children cannot exceed the allowable ratio; • Payment may be made for meals served to provider’s own child(ren) or foster children only when:  Their child(ren) are enrolled and participating in the child care program during the time of the meal service;  At least one enrolled, non-resident child is present and participating in the child care program;  The provider meets the family size income standards for free or reduced price meals; • Seconds may be served but are not reimbursable; and • If a school age child receives a breakfast, lunch or afterschool snack at school, a provider may not claim the same meal. In accordance with the Uniform Guidance, Compliance Supplement, Part 6 – Internal Control, the 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. EFFECT Program requirements were not complied with. Additionally, meal reimbursements were clerically inaccurate and the providers and sponsor were incorrectly reimbursed. CAUSE Although the internal controls were adequately designed, there were deficiencies in the execution of the controls. All errors occurred on paper menus, which have a higher risk of errors. RECOMMENDATION AND BENEFIT Menus should be reviewed to ensure all meals with the required components are claimed, and provider meal count sheets should be reviewed for clerical accuracy and completion, prior to the preparation of the reimbursement claim. These reviews should be documented. This will help ensure that program requirements are complied with and only eligible meals served to eligible participants are claimed for reimbursement. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.