Audit 389994

Finding 2025-001: Allowable cost and activities - Significant deficiency in internal controls over compliance. Child Nutrition Cluster ALN 10.555/10.553 Criteria: Section 200 of the Code of Federal Regulations requires recipients to implement robust internal controls to reduce the risk of noncompliance with cost principles for all activities allocated to the grant. Condition: During allowable cost and activities other cost testing for the program, 9 out of 40 samples did not include approval of the invoice prior to being allocated to the grant activities. Cause: Prior to March 2025, the School did not have a standard procedure in place to ensure proper controls over allowable costs and activities allocated to federal grants. Effect: Internal controls over the program were not properly designed to reduce the risk of noncompliance with Federal Regulation Questioned costs: None. Recommendation: In order to comply with the Code of Federal Regulations, we recommend the school implement a prior approval process of all grant expenditures. In addition, support of approval should be documented kept on file. Management’s response: See corrective action plan, which was implemented in March 2025.

Finding 2025-002: Allowable cost and activities - Significant deficiency in internal controls over compliance. Child Nutrition Cluster ALN 10.555/10.553 Criteria: Section 200 of the Code of Federal Regulations requires recipients to implement robust internal controls to reduce the risk of noncompliance with cost principles for all activities allocated to the grant and to retain supporting documentation of control completion for three years from the date of submission of the expenditure request. Condition: During allowable cost and activities payroll testing for the program, the auditor noted that documentation of key control was not retained on file. Management ultimately obtained documentation of the control through a third-party service provider. Cause: Documentation and retention of key controls were not considered when designing the payroll process. Effect: Key internal control documentation was not properly retained and readily available to support the testing of key controls over the payroll process. Questioned costs: None Recommendation: In order to comply with the Code of Federal Regulations, we recommend the school’s policies be updated to require document retention for at least three years for all key control documentation. Management’s response: See corrective action plan.