FINDING 2024-001
Information on the federal program:
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Program: School Breakfast Program, National School Lunch Program
Assistance Listing Number: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): FY 22-23, FY 23-24
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Eligibility
Audit Finding: Material Weakness
Criteria: 2 CFR section 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over Federal award 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 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). . . ."
7 CFR 245.3(c) sates in part:
Each School Food Authority shall serve free and reduced price meals or free milk in the respective programs
to children eligible under its eligibility criteria.
Condition: An effective internal control system was not in place at the School Corporation in order to
ensure compliance with requirements related to the grant agreement and the eligibility compliance
requirement.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with eligibility requirements.
Effect: The failure to establish an effective internal control system placed the School Corporation at risk of
noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties
within an internal control system could have also allowed noncompliance with the compliance requirements
and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight,
reviews, and approvals over the activities of the programs.
Questioned Costs: There were no questioned costs identified.
Context: During the testing of internal controls over eligibility determinations for free and reduced meals,
we noted there was no formal review control in place. There is no documented, secondary review for the
applications entered in the food service software which determines eligibility. Additionally, there was no
documented review by School Corporation personnel of the Income Eligibility Guidelines used by the food
service software which are updated on annual basis.
Identification as a repeat finding, if applicable: No.
Recommendation: We recommend that the School Corporation's management establish an internal
control process to review the updates to the annual adjustments to the Income Eligibility Guidelines made
to the food service software to determine eligibility to ensure updated guidelines are accurate and complete.
This review should be documented on annual basis to confirm management’s oversight and monitoring of
eligibility determinations.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
FINDING 2024-001
Information on the federal program:
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Program: School Breakfast Program, National School Lunch Program
Assistance Listing Number: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): FY 22-23, FY 23-24
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Eligibility
Audit Finding: Material Weakness
Criteria: 2 CFR section 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over Federal award 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 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). . . ."
7 CFR 245.3(c) sates in part:
Each School Food Authority shall serve free and reduced price meals or free milk in the respective programs
to children eligible under its eligibility criteria.
Condition: An effective internal control system was not in place at the School Corporation in order to
ensure compliance with requirements related to the grant agreement and the eligibility compliance
requirement.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with eligibility requirements.
Effect: The failure to establish an effective internal control system placed the School Corporation at risk of
noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties
within an internal control system could have also allowed noncompliance with the compliance requirements
and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight,
reviews, and approvals over the activities of the programs.
Questioned Costs: There were no questioned costs identified.
Context: During the testing of internal controls over eligibility determinations for free and reduced meals,
we noted there was no formal review control in place. There is no documented, secondary review for the
applications entered in the food service software which determines eligibility. Additionally, there was no
documented review by School Corporation personnel of the Income Eligibility Guidelines used by the food
service software which are updated on annual basis.
Identification as a repeat finding, if applicable: No.
Recommendation: We recommend that the School Corporation's management establish an internal
control process to review the updates to the annual adjustments to the Income Eligibility Guidelines made
to the food service software to determine eligibility to ensure updated guidelines are accurate and complete.
This review should be documented on annual basis to confirm management’s oversight and monitoring of
eligibility determinations.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
FINDING 2024-001
Information on the federal program:
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Program: School Breakfast Program, National School Lunch Program
Assistance Listing Number: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): FY 22-23, FY 23-24
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Eligibility
Audit Finding: Material Weakness
Criteria: 2 CFR section 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over Federal award 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 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). . . ."
7 CFR 245.3(c) sates in part:
Each School Food Authority shall serve free and reduced price meals or free milk in the respective programs
to children eligible under its eligibility criteria.
Condition: An effective internal control system was not in place at the School Corporation in order to
ensure compliance with requirements related to the grant agreement and the eligibility compliance
requirement.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with eligibility requirements.
Effect: The failure to establish an effective internal control system placed the School Corporation at risk of
noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties
within an internal control system could have also allowed noncompliance with the compliance requirements
and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight,
reviews, and approvals over the activities of the programs.
Questioned Costs: There were no questioned costs identified.
Context: During the testing of internal controls over eligibility determinations for free and reduced meals,
we noted there was no formal review control in place. There is no documented, secondary review for the
applications entered in the food service software which determines eligibility. Additionally, there was no
documented review by School Corporation personnel of the Income Eligibility Guidelines used by the food
service software which are updated on annual basis.
Identification as a repeat finding, if applicable: No.
Recommendation: We recommend that the School Corporation's management establish an internal
control process to review the updates to the annual adjustments to the Income Eligibility Guidelines made
to the food service software to determine eligibility to ensure updated guidelines are accurate and complete.
This review should be documented on annual basis to confirm management’s oversight and monitoring of
eligibility determinations.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
FINDING 2024-002
Information on the federal program:
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Program: School Breakfast Program, National School Lunch Program
Assistance Listing Number: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): FY 22-23, FY 23-24
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Procurement and Suspension and Debarment
Audit Finding: Material Weakness
Criteria: 2 CFR 200.318 states:
“The Non-Federal entity must have and use documented procurement procedures, consistent with State,
local, and tribal laws and regulations and the standards of this section, for the acquisition of property or
services required under a Federal award or subaward. The non-Federal entity's documented procurement
procedures must conform to the procurement standards identified in 200.317 through 200.327.”
and 2 CFR 180.300 states:
"When you enter into a covered transaction with another person at the next lower tier, you must verify that
the person with whom you intend to do business is not excluded or disqualified.
You do this by:
(a) Checking the SAM Exclusions; or
(b) Collecting a certification from that person; or
(c) Adding a clause or condition to the covered transaction with that person."
Condition: An effective internal control system was not in place at the School Corporation to ensure
compliance with requirements related to the Child Nutrition Cluster and Procurement and Suspension and
Debarment compliance requirements.
Cause: The School Corporation’s management had not developed a system of internal controls that would
have ensured compliance with the Procurement and Suspension and Debarment compliance requirement
vendors utilized and not procured by the School Corporation’s purchasing cooperative.
Effect: The failure to establish an effective internal control system could place the School Corporation at
risk of noncompliance with the federal program and applicable federal/state procurement regulations. Not
adhering to the School Corporation’s procurement policy designed to follow federal and state regulations,
could result in the misuse and mismanagement of federal funds by conducting business with vendors not
properly procured and verified to not be suspended or debarred.
Questioned Costs: There we no questioned costs identified.
Context:
Procurement
The School Corporation participates in the Food2School Child Nutrition Cooperative which procures
vendors for food purchases and other supplies on behalf of its members. During the audit period, the School
Corporation purchased supplies and equipment from vendors not procured by the Cooperative. One vendor
with aggregate annual purchases of $118,390 and $68,859 for fiscal year 2023 and fiscal year 2024,
respectively, exceeded the small purchase threshold ($50,000 - $150,000) and was not subject to the
School Corporation’s procurement policy to solicit multiple quotes and to document the method and
rationale for procurement.
Suspension and Debarment
For three vendors tested which were not procured by the Cooperative and had aggregate annual
disbursements exceeding the federal suspension and debarment threshold of $25,000, the School
Corporation did not perform suspension and debarment checks to confirm the vendors were not suspended
or debarred before entering into the contract or disbursing federal funds.
Identification as a repeat finding, if applicable: Yes, see Finding 2022-002 and Finding 2022-003.
Recommendation: We recommend the School Corporation implement an internal control to monitor
purchases within the Food Service Department with vendors that exceed the small purchase dollar
threshold, either individually or in annual aggregation, to ensure the School Corporation’s procurement
policy is followed which includes soliciting competitive quotes for transactions within $50,000 - $150,000
and also ensure multiple purchases throughout the year are equitably spilt among all qualifying vendors.
We also recommend that the School Corporation implement an internal control process to monitor
aggregate vendor disbursements in Fund 800, School Lunch, on annual basis and perform suspension and
debarment checks for all vendors exceeding $25,000 in aggregate disbursements on an annual basis to
ensure compliance with federal suspension and debarment regulations.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
FINDING 2024-002
Information on the federal program:
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Program: School Breakfast Program, National School Lunch Program
Assistance Listing Number: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): FY 22-23, FY 23-24
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Procurement and Suspension and Debarment
Audit Finding: Material Weakness
Criteria: 2 CFR 200.318 states:
“The Non-Federal entity must have and use documented procurement procedures, consistent with State,
local, and tribal laws and regulations and the standards of this section, for the acquisition of property or
services required under a Federal award or subaward. The non-Federal entity's documented procurement
procedures must conform to the procurement standards identified in 200.317 through 200.327.”
and 2 CFR 180.300 states:
"When you enter into a covered transaction with another person at the next lower tier, you must verify that
the person with whom you intend to do business is not excluded or disqualified.
You do this by:
(a) Checking the SAM Exclusions; or
(b) Collecting a certification from that person; or
(c) Adding a clause or condition to the covered transaction with that person."
Condition: An effective internal control system was not in place at the School Corporation to ensure
compliance with requirements related to the Child Nutrition Cluster and Procurement and Suspension and
Debarment compliance requirements.
Cause: The School Corporation’s management had not developed a system of internal controls that would
have ensured compliance with the Procurement and Suspension and Debarment compliance requirement
vendors utilized and not procured by the School Corporation’s purchasing cooperative.
Effect: The failure to establish an effective internal control system could place the School Corporation at
risk of noncompliance with the federal program and applicable federal/state procurement regulations. Not
adhering to the School Corporation’s procurement policy designed to follow federal and state regulations,
could result in the misuse and mismanagement of federal funds by conducting business with vendors not
properly procured and verified to not be suspended or debarred.
Questioned Costs: There we no questioned costs identified.
Context:
Procurement
The School Corporation participates in the Food2School Child Nutrition Cooperative which procures
vendors for food purchases and other supplies on behalf of its members. During the audit period, the School
Corporation purchased supplies and equipment from vendors not procured by the Cooperative. One vendor
with aggregate annual purchases of $118,390 and $68,859 for fiscal year 2023 and fiscal year 2024,
respectively, exceeded the small purchase threshold ($50,000 - $150,000) and was not subject to the
School Corporation’s procurement policy to solicit multiple quotes and to document the method and
rationale for procurement.
Suspension and Debarment
For three vendors tested which were not procured by the Cooperative and had aggregate annual
disbursements exceeding the federal suspension and debarment threshold of $25,000, the School
Corporation did not perform suspension and debarment checks to confirm the vendors were not suspended
or debarred before entering into the contract or disbursing federal funds.
Identification as a repeat finding, if applicable: Yes, see Finding 2022-002 and Finding 2022-003.
Recommendation: We recommend the School Corporation implement an internal control to monitor
purchases within the Food Service Department with vendors that exceed the small purchase dollar
threshold, either individually or in annual aggregation, to ensure the School Corporation’s procurement
policy is followed which includes soliciting competitive quotes for transactions within $50,000 - $150,000
and also ensure multiple purchases throughout the year are equitably spilt among all qualifying vendors.
We also recommend that the School Corporation implement an internal control process to monitor
aggregate vendor disbursements in Fund 800, School Lunch, on annual basis and perform suspension and
debarment checks for all vendors exceeding $25,000 in aggregate disbursements on an annual basis to
ensure compliance with federal suspension and debarment regulations.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
FINDING 2024-002
Information on the federal program:
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Program: School Breakfast Program, National School Lunch Program
Assistance Listing Number: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): FY 22-23, FY 23-24
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Procurement and Suspension and Debarment
Audit Finding: Material Weakness
Criteria: 2 CFR 200.318 states:
“The Non-Federal entity must have and use documented procurement procedures, consistent with State,
local, and tribal laws and regulations and the standards of this section, for the acquisition of property or
services required under a Federal award or subaward. The non-Federal entity's documented procurement
procedures must conform to the procurement standards identified in 200.317 through 200.327.”
and 2 CFR 180.300 states:
"When you enter into a covered transaction with another person at the next lower tier, you must verify that
the person with whom you intend to do business is not excluded or disqualified.
You do this by:
(a) Checking the SAM Exclusions; or
(b) Collecting a certification from that person; or
(c) Adding a clause or condition to the covered transaction with that person."
Condition: An effective internal control system was not in place at the School Corporation to ensure
compliance with requirements related to the Child Nutrition Cluster and Procurement and Suspension and
Debarment compliance requirements.
Cause: The School Corporation’s management had not developed a system of internal controls that would
have ensured compliance with the Procurement and Suspension and Debarment compliance requirement
vendors utilized and not procured by the School Corporation’s purchasing cooperative.
Effect: The failure to establish an effective internal control system could place the School Corporation at
risk of noncompliance with the federal program and applicable federal/state procurement regulations. Not
adhering to the School Corporation’s procurement policy designed to follow federal and state regulations,
could result in the misuse and mismanagement of federal funds by conducting business with vendors not
properly procured and verified to not be suspended or debarred.
Questioned Costs: There we no questioned costs identified.
Context:
Procurement
The School Corporation participates in the Food2School Child Nutrition Cooperative which procures
vendors for food purchases and other supplies on behalf of its members. During the audit period, the School
Corporation purchased supplies and equipment from vendors not procured by the Cooperative. One vendor
with aggregate annual purchases of $118,390 and $68,859 for fiscal year 2023 and fiscal year 2024,
respectively, exceeded the small purchase threshold ($50,000 - $150,000) and was not subject to the
School Corporation’s procurement policy to solicit multiple quotes and to document the method and
rationale for procurement.
Suspension and Debarment
For three vendors tested which were not procured by the Cooperative and had aggregate annual
disbursements exceeding the federal suspension and debarment threshold of $25,000, the School
Corporation did not perform suspension and debarment checks to confirm the vendors were not suspended
or debarred before entering into the contract or disbursing federal funds.
Identification as a repeat finding, if applicable: Yes, see Finding 2022-002 and Finding 2022-003.
Recommendation: We recommend the School Corporation implement an internal control to monitor
purchases within the Food Service Department with vendors that exceed the small purchase dollar
threshold, either individually or in annual aggregation, to ensure the School Corporation’s procurement
policy is followed which includes soliciting competitive quotes for transactions within $50,000 - $150,000
and also ensure multiple purchases throughout the year are equitably spilt among all qualifying vendors.
We also recommend that the School Corporation implement an internal control process to monitor
aggregate vendor disbursements in Fund 800, School Lunch, on annual basis and perform suspension and
debarment checks for all vendors exceeding $25,000 in aggregate disbursements on an annual basis to
ensure compliance with federal suspension and debarment regulations.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
FINDING 2024-001
Information on the federal program:
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Program: School Breakfast Program, National School Lunch Program
Assistance Listing Number: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): FY 22-23, FY 23-24
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Eligibility
Audit Finding: Material Weakness
Criteria: 2 CFR section 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over Federal award 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 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). . . ."
7 CFR 245.3(c) sates in part:
Each School Food Authority shall serve free and reduced price meals or free milk in the respective programs
to children eligible under its eligibility criteria.
Condition: An effective internal control system was not in place at the School Corporation in order to
ensure compliance with requirements related to the grant agreement and the eligibility compliance
requirement.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with eligibility requirements.
Effect: The failure to establish an effective internal control system placed the School Corporation at risk of
noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties
within an internal control system could have also allowed noncompliance with the compliance requirements
and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight,
reviews, and approvals over the activities of the programs.
Questioned Costs: There were no questioned costs identified.
Context: During the testing of internal controls over eligibility determinations for free and reduced meals,
we noted there was no formal review control in place. There is no documented, secondary review for the
applications entered in the food service software which determines eligibility. Additionally, there was no
documented review by School Corporation personnel of the Income Eligibility Guidelines used by the food
service software which are updated on annual basis.
Identification as a repeat finding, if applicable: No.
Recommendation: We recommend that the School Corporation's management establish an internal
control process to review the updates to the annual adjustments to the Income Eligibility Guidelines made
to the food service software to determine eligibility to ensure updated guidelines are accurate and complete.
This review should be documented on annual basis to confirm management’s oversight and monitoring of
eligibility determinations.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
FINDING 2024-001
Information on the federal program:
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Program: School Breakfast Program, National School Lunch Program
Assistance Listing Number: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): FY 22-23, FY 23-24
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Eligibility
Audit Finding: Material Weakness
Criteria: 2 CFR section 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over Federal award 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 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). . . ."
7 CFR 245.3(c) sates in part:
Each School Food Authority shall serve free and reduced price meals or free milk in the respective programs
to children eligible under its eligibility criteria.
Condition: An effective internal control system was not in place at the School Corporation in order to
ensure compliance with requirements related to the grant agreement and the eligibility compliance
requirement.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with eligibility requirements.
Effect: The failure to establish an effective internal control system placed the School Corporation at risk of
noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties
within an internal control system could have also allowed noncompliance with the compliance requirements
and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight,
reviews, and approvals over the activities of the programs.
Questioned Costs: There were no questioned costs identified.
Context: During the testing of internal controls over eligibility determinations for free and reduced meals,
we noted there was no formal review control in place. There is no documented, secondary review for the
applications entered in the food service software which determines eligibility. Additionally, there was no
documented review by School Corporation personnel of the Income Eligibility Guidelines used by the food
service software which are updated on annual basis.
Identification as a repeat finding, if applicable: No.
Recommendation: We recommend that the School Corporation's management establish an internal
control process to review the updates to the annual adjustments to the Income Eligibility Guidelines made
to the food service software to determine eligibility to ensure updated guidelines are accurate and complete.
This review should be documented on annual basis to confirm management’s oversight and monitoring of
eligibility determinations.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
FINDING 2024-001
Information on the federal program:
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Program: School Breakfast Program, National School Lunch Program
Assistance Listing Number: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): FY 22-23, FY 23-24
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Eligibility
Audit Finding: Material Weakness
Criteria: 2 CFR section 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over Federal award 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 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). . . ."
7 CFR 245.3(c) sates in part:
Each School Food Authority shall serve free and reduced price meals or free milk in the respective programs
to children eligible under its eligibility criteria.
Condition: An effective internal control system was not in place at the School Corporation in order to
ensure compliance with requirements related to the grant agreement and the eligibility compliance
requirement.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with eligibility requirements.
Effect: The failure to establish an effective internal control system placed the School Corporation at risk of
noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties
within an internal control system could have also allowed noncompliance with the compliance requirements
and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight,
reviews, and approvals over the activities of the programs.
Questioned Costs: There were no questioned costs identified.
Context: During the testing of internal controls over eligibility determinations for free and reduced meals,
we noted there was no formal review control in place. There is no documented, secondary review for the
applications entered in the food service software which determines eligibility. Additionally, there was no
documented review by School Corporation personnel of the Income Eligibility Guidelines used by the food
service software which are updated on annual basis.
Identification as a repeat finding, if applicable: No.
Recommendation: We recommend that the School Corporation's management establish an internal
control process to review the updates to the annual adjustments to the Income Eligibility Guidelines made
to the food service software to determine eligibility to ensure updated guidelines are accurate and complete.
This review should be documented on annual basis to confirm management’s oversight and monitoring of
eligibility determinations.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
FINDING 2024-002
Information on the federal program:
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Program: School Breakfast Program, National School Lunch Program
Assistance Listing Number: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): FY 22-23, FY 23-24
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Procurement and Suspension and Debarment
Audit Finding: Material Weakness
Criteria: 2 CFR 200.318 states:
“The Non-Federal entity must have and use documented procurement procedures, consistent with State,
local, and tribal laws and regulations and the standards of this section, for the acquisition of property or
services required under a Federal award or subaward. The non-Federal entity's documented procurement
procedures must conform to the procurement standards identified in 200.317 through 200.327.”
and 2 CFR 180.300 states:
"When you enter into a covered transaction with another person at the next lower tier, you must verify that
the person with whom you intend to do business is not excluded or disqualified.
You do this by:
(a) Checking the SAM Exclusions; or
(b) Collecting a certification from that person; or
(c) Adding a clause or condition to the covered transaction with that person."
Condition: An effective internal control system was not in place at the School Corporation to ensure
compliance with requirements related to the Child Nutrition Cluster and Procurement and Suspension and
Debarment compliance requirements.
Cause: The School Corporation’s management had not developed a system of internal controls that would
have ensured compliance with the Procurement and Suspension and Debarment compliance requirement
vendors utilized and not procured by the School Corporation’s purchasing cooperative.
Effect: The failure to establish an effective internal control system could place the School Corporation at
risk of noncompliance with the federal program and applicable federal/state procurement regulations. Not
adhering to the School Corporation’s procurement policy designed to follow federal and state regulations,
could result in the misuse and mismanagement of federal funds by conducting business with vendors not
properly procured and verified to not be suspended or debarred.
Questioned Costs: There we no questioned costs identified.
Context:
Procurement
The School Corporation participates in the Food2School Child Nutrition Cooperative which procures
vendors for food purchases and other supplies on behalf of its members. During the audit period, the School
Corporation purchased supplies and equipment from vendors not procured by the Cooperative. One vendor
with aggregate annual purchases of $118,390 and $68,859 for fiscal year 2023 and fiscal year 2024,
respectively, exceeded the small purchase threshold ($50,000 - $150,000) and was not subject to the
School Corporation’s procurement policy to solicit multiple quotes and to document the method and
rationale for procurement.
Suspension and Debarment
For three vendors tested which were not procured by the Cooperative and had aggregate annual
disbursements exceeding the federal suspension and debarment threshold of $25,000, the School
Corporation did not perform suspension and debarment checks to confirm the vendors were not suspended
or debarred before entering into the contract or disbursing federal funds.
Identification as a repeat finding, if applicable: Yes, see Finding 2022-002 and Finding 2022-003.
Recommendation: We recommend the School Corporation implement an internal control to monitor
purchases within the Food Service Department with vendors that exceed the small purchase dollar
threshold, either individually or in annual aggregation, to ensure the School Corporation’s procurement
policy is followed which includes soliciting competitive quotes for transactions within $50,000 - $150,000
and also ensure multiple purchases throughout the year are equitably spilt among all qualifying vendors.
We also recommend that the School Corporation implement an internal control process to monitor
aggregate vendor disbursements in Fund 800, School Lunch, on annual basis and perform suspension and
debarment checks for all vendors exceeding $25,000 in aggregate disbursements on an annual basis to
ensure compliance with federal suspension and debarment regulations.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
FINDING 2024-002
Information on the federal program:
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Program: School Breakfast Program, National School Lunch Program
Assistance Listing Number: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): FY 22-23, FY 23-24
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Procurement and Suspension and Debarment
Audit Finding: Material Weakness
Criteria: 2 CFR 200.318 states:
“The Non-Federal entity must have and use documented procurement procedures, consistent with State,
local, and tribal laws and regulations and the standards of this section, for the acquisition of property or
services required under a Federal award or subaward. The non-Federal entity's documented procurement
procedures must conform to the procurement standards identified in 200.317 through 200.327.”
and 2 CFR 180.300 states:
"When you enter into a covered transaction with another person at the next lower tier, you must verify that
the person with whom you intend to do business is not excluded or disqualified.
You do this by:
(a) Checking the SAM Exclusions; or
(b) Collecting a certification from that person; or
(c) Adding a clause or condition to the covered transaction with that person."
Condition: An effective internal control system was not in place at the School Corporation to ensure
compliance with requirements related to the Child Nutrition Cluster and Procurement and Suspension and
Debarment compliance requirements.
Cause: The School Corporation’s management had not developed a system of internal controls that would
have ensured compliance with the Procurement and Suspension and Debarment compliance requirement
vendors utilized and not procured by the School Corporation’s purchasing cooperative.
Effect: The failure to establish an effective internal control system could place the School Corporation at
risk of noncompliance with the federal program and applicable federal/state procurement regulations. Not
adhering to the School Corporation’s procurement policy designed to follow federal and state regulations,
could result in the misuse and mismanagement of federal funds by conducting business with vendors not
properly procured and verified to not be suspended or debarred.
Questioned Costs: There we no questioned costs identified.
Context:
Procurement
The School Corporation participates in the Food2School Child Nutrition Cooperative which procures
vendors for food purchases and other supplies on behalf of its members. During the audit period, the School
Corporation purchased supplies and equipment from vendors not procured by the Cooperative. One vendor
with aggregate annual purchases of $118,390 and $68,859 for fiscal year 2023 and fiscal year 2024,
respectively, exceeded the small purchase threshold ($50,000 - $150,000) and was not subject to the
School Corporation’s procurement policy to solicit multiple quotes and to document the method and
rationale for procurement.
Suspension and Debarment
For three vendors tested which were not procured by the Cooperative and had aggregate annual
disbursements exceeding the federal suspension and debarment threshold of $25,000, the School
Corporation did not perform suspension and debarment checks to confirm the vendors were not suspended
or debarred before entering into the contract or disbursing federal funds.
Identification as a repeat finding, if applicable: Yes, see Finding 2022-002 and Finding 2022-003.
Recommendation: We recommend the School Corporation implement an internal control to monitor
purchases within the Food Service Department with vendors that exceed the small purchase dollar
threshold, either individually or in annual aggregation, to ensure the School Corporation’s procurement
policy is followed which includes soliciting competitive quotes for transactions within $50,000 - $150,000
and also ensure multiple purchases throughout the year are equitably spilt among all qualifying vendors.
We also recommend that the School Corporation implement an internal control process to monitor
aggregate vendor disbursements in Fund 800, School Lunch, on annual basis and perform suspension and
debarment checks for all vendors exceeding $25,000 in aggregate disbursements on an annual basis to
ensure compliance with federal suspension and debarment regulations.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
FINDING 2024-002
Information on the federal program:
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Program: School Breakfast Program, National School Lunch Program
Assistance Listing Number: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): FY 22-23, FY 23-24
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Procurement and Suspension and Debarment
Audit Finding: Material Weakness
Criteria: 2 CFR 200.318 states:
“The Non-Federal entity must have and use documented procurement procedures, consistent with State,
local, and tribal laws and regulations and the standards of this section, for the acquisition of property or
services required under a Federal award or subaward. The non-Federal entity's documented procurement
procedures must conform to the procurement standards identified in 200.317 through 200.327.”
and 2 CFR 180.300 states:
"When you enter into a covered transaction with another person at the next lower tier, you must verify that
the person with whom you intend to do business is not excluded or disqualified.
You do this by:
(a) Checking the SAM Exclusions; or
(b) Collecting a certification from that person; or
(c) Adding a clause or condition to the covered transaction with that person."
Condition: An effective internal control system was not in place at the School Corporation to ensure
compliance with requirements related to the Child Nutrition Cluster and Procurement and Suspension and
Debarment compliance requirements.
Cause: The School Corporation’s management had not developed a system of internal controls that would
have ensured compliance with the Procurement and Suspension and Debarment compliance requirement
vendors utilized and not procured by the School Corporation’s purchasing cooperative.
Effect: The failure to establish an effective internal control system could place the School Corporation at
risk of noncompliance with the federal program and applicable federal/state procurement regulations. Not
adhering to the School Corporation’s procurement policy designed to follow federal and state regulations,
could result in the misuse and mismanagement of federal funds by conducting business with vendors not
properly procured and verified to not be suspended or debarred.
Questioned Costs: There we no questioned costs identified.
Context:
Procurement
The School Corporation participates in the Food2School Child Nutrition Cooperative which procures
vendors for food purchases and other supplies on behalf of its members. During the audit period, the School
Corporation purchased supplies and equipment from vendors not procured by the Cooperative. One vendor
with aggregate annual purchases of $118,390 and $68,859 for fiscal year 2023 and fiscal year 2024,
respectively, exceeded the small purchase threshold ($50,000 - $150,000) and was not subject to the
School Corporation’s procurement policy to solicit multiple quotes and to document the method and
rationale for procurement.
Suspension and Debarment
For three vendors tested which were not procured by the Cooperative and had aggregate annual
disbursements exceeding the federal suspension and debarment threshold of $25,000, the School
Corporation did not perform suspension and debarment checks to confirm the vendors were not suspended
or debarred before entering into the contract or disbursing federal funds.
Identification as a repeat finding, if applicable: Yes, see Finding 2022-002 and Finding 2022-003.
Recommendation: We recommend the School Corporation implement an internal control to monitor
purchases within the Food Service Department with vendors that exceed the small purchase dollar
threshold, either individually or in annual aggregation, to ensure the School Corporation’s procurement
policy is followed which includes soliciting competitive quotes for transactions within $50,000 - $150,000
and also ensure multiple purchases throughout the year are equitably spilt among all qualifying vendors.
We also recommend that the School Corporation implement an internal control process to monitor
aggregate vendor disbursements in Fund 800, School Lunch, on annual basis and perform suspension and
debarment checks for all vendors exceeding $25,000 in aggregate disbursements on an annual basis to
ensure compliance with federal suspension and debarment regulations.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.