Audit 391128

SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Finding 2025-002 - Eligibility Federal Program: Child and Adult Care Food Program ALN: 10.558 Federal Agency: U.S. Department of Agriculture Pass-Through Entity: Pennsylvania Department of Education Criteria: Under 7 CFR 226.23(e), institutions must accurately determine and classify participant eligibility (Free, Reduced Price, or Paid) based on properly completed household income eligibility forms. Institutions must claim reimbursement based on the correct eligibility category. Condition: Our testing identified that NDS incorrectly submitted reimbursement information of certain program participants resulting in underclaiming of reimbursements. Although the incorrect reporting did not result in overpayments, the institution did not comply with the requirements under the federal program. Cause: Staff responsible for entering student eligibility information into the NDS database incorrectly coded participants as free, reduced price, or paid. Additionally, no review control exists to ensure that participant eligibility data is entered correctly. Effect: During our testing of participant eligibility, we noted that four out of 90 sampled participants were incorrectly submitted for reimbursement as “Reduced Price” when income documentation supported a “Free” eligibility classification. As a result, the institution claimed reimbursement at the reduced price rate rather than the higher free rate, resulting in lower reimbursement than what the institution was entitled to receive. There was no impact on participants’ access to or cost of meals, as participant eligibility was appropriately determined, and the misclassification did not result in the receipt of unallowable federal funds. Questioned Costs: Because the error resulted in lower reimbursements, there were no questioned costs, as defined under 2 CFR 200.1, identified as a result of this finding. Repeat Finding: No. Recommendation: We recommend that NDS reiterate the importance of eligibility classification and implement a periodic review of student eligibility information in the database to ensure accurate reimbursements. Views of Responsible Officials: Management has acknowledged the errors identified and has taken action to strengthen controls surrounding these processes.