Audit 392819

Compliance Requirement: Eligibility Criteria Children from households with incomes at or below 130 percent of the Federal poverty level are eligible to receive meals or milk free under the School Nutrition Programs. Children from households with incomes above 130 percent but at or below 185 percent of the Federal poverty level are eligible to receive reduced price meals. Persons from households with incomes exceeding 185 percent of the poverty level pay the full price (7 CFR sections 245.2, 245.3, and 245.6; section 9(b)(1) of the NSLA (42 USC 1758 (b)(1)); sections 3(a)(6) and 4(e) of the CNA (42 USC 1772(a)(6) and 1773(e))). Condition We haphazardly sampled 40 students receiving benefits under the Child Nutrition Cluster program. We noted one student who received free lunch benefits who should not have received free or reduced lunch benefits. In this instance, income was incorrectly calculated when determining eligibility, causing an incorrect certification. Known and likely questioned costs were determined not to be material or exceed $25,000. The sampling methodology used was not statistically valid. Cause Adequate oversight of the eligibility determination process was not in place in order to identify mistakes in determining eligibility. Effect Without demonstrable, documented controls supporting compliance with Child Nutrition compliance standards, compliance with the requirements may not be assured. Recommendation We recommend that the School District institute additional procedures to ensure that eligibility determinations are made correctly. We also recommend that the School District ensures that the household number and income be compared to the National Income Eligibility Guidelines to calculate whether the student qualifies for free or reduced lunch. View of Responsible Officials The School District will institute additional procedures to ensure that eligibility determinations are reviewed and accurate.

Compliance Requirement: Reporting Criteria School Food Authorities (SFAs) and sponsors must submit monthly claims for reimbursement for meals and snacks served to eligible students within 60 days following the last day of the month covered by the claim (7 CFR sections 210.8, 220.11, 215.10, and 225.15(c)). The State agency has an additional 30 days to submit a consolidated report to FNS via the FNS10 for NSLP/SBP and the FNS-418 for SFSP (7 CFR 210.5(d), 220.13(b)(2), 215.11(c)(2), and 225.8). Condition We sampled 4 months of reimbursement claims under the Child Nutrition Cluster of programs. We noted that two months had variances between the free and paid meals reported and the supporting documentation related to meals served. Known and likely questioned costs were determined not to be material or exceed $25,000. The sampling methodology used was statistically valid. Cause Adequate oversight of the reporting process was not in place in order to identify mistakes in reporting. Effect Without demonstrable, documented controls supporting compliance with Child Nutrition compliance standards, compliance with the requirements may not be assured. Recommendation We recommend that the School District institute additional procedures to ensure that reporting is completed correctly and claims for reimbursement are accurate. We also recommend that claims are reviewed prior to submission. View of Responsible Officials The School District will institute additional procedures to ensure that claim reimbursements are reviewed and accurate.