Audit 395609

2 CFR § 3474.1 gives regulatory effect to the Office of Management and Budget guidance in 2 CFR § 200 for the Department of Education. 2 CFR § 200 Subpart E states, in part, costs must be adequately documented in order to be considered allowable. 2 CFR § 200.430(g)(1)(i) states, in part, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The Ohio Department of Education and Workforce’s Grants Manual states, in part, semi-annual certifications are allowed when an employee’s compensation is funded by only one federal grant and works solely on a single cost objective. An employee funded by a federal grant and the general fund would fall under this category. The Ohio Department of Education and Workforce’s Grants Management Guidance 2014-002 states, in part, employees who meet [the criteria to use semi-annual certifications] are not required to maintain time and-effort records if their job description clearly shows the employee is assigned 100% to the program or single cost objective. Each employee must certify in writing, at least semi-annually, that he/she worked solely on the program or single cost objective for the period covered by the certification. The certification is signed by the employee or by the supervisor having first-hand knowledge. Charges to the grant must be supported by these semi-annual certifications. The semi-annual certification is executed after the work has been completed, and not before. Due to insufficient controls over records management, the School District did not maintain semi-annual certifications, or other time and effort documentation, for an employee paid from the Child Nutrition Cluster. As a result, $49,579 of payroll and benefits charged to the Nutrition Cluster were not supported by records that accurately reflect the work performed and are questioned costs under 2 CFR § 200.516. Lack of controls over records management could lead to the School District not being able to support charges against federal programs and potentially losing funding. The School District should ensure semi-annual certifications are accurately and timely completed and subsequently retained to support payroll and benefits charged to the program. This documentation should be used to determine the allocation of salary among the various programs, grants, activities, etc. The School District’s management should review the requirements of the Uniform Guidance to determine the documentation needed and other requirements related to the allowability of costs charged to Federal awards to prevent such noncompliance in the future

7 CFR § 210.8(a) states in part, "The school food authority shall establish internal controls which ensure the accuracy of meal counts prior to the submission of the monthly Claim for Reimbursement. At a minimum, these internal controls shall include: an on-site review of the meal counting and claiming system employed by each school within the jurisdiction of the school food authority; comparisons of daily free, reduced price and paid meal counts against data which will assist in the identification of meal counts in excess of the number of free, reduced price and paid meals served each day to children eligible for such meals; and a system for following up on those meal counts which suggest the likelihood of meal counting problems." 7 CFR § 210.8(c) states in part, “the Claim for Reimbursement must include data in sufficient detail to justify the reimbursement claimed and to enable the State agency to provide the Report of School Program Operations required under § 210.5(d).” In Ohio, the Ohio Department of Education and Workforce (DEW) requires school districts to use the Claims Reporting and Reimbursement System (CRRS) to report meal data for reimbursement. The School District uses a point-of-sale system that generates a CN-6 Report (Breakfast) and CN-7 Report (Lunch), which is used to manually complete a monthly CN-6 and CN-7 summary worksheet that shows meals served to students each day based on the point-of-sale system data. This worksheet is used to compile the monthly reimbursement request submitted to Ohio Department of Education and Workforce. Due to insufficient controls over CN-7 reporting related to lunch meal counts and snack counts, four out of eight (50%) site claim forms submitted by the School District to the Ohio Department of Education and Workforce were inaccurate, since the School District claimed less meals and snacks served than what was actually distributed as shown below: Month Type Recalculated Meal Count Reported Meal Count Variance(s) January Lunch 2,941 2,931 10 January Snack 1,029 1,019 10 February Snack 1,110 1,101 9 October Snack 1,872 1,766 106 These errors occurred due to a weakness in internal controls, which failed to ensure site claim forms for reimbursable meals served at each building and submitted by the School District to the Ohio Department of Education and Workforce were entered correctly. Additional errors were found on two out of eight (25%) site claim forms submitted by the School District to the Ohio Department of Education and Workforce. The School District inaccurately reported supporting information for number of enrolled children. This had no impact on the number of meals served or reimbursement received by School District. However, this increases the risk of misstatement as Ohio Department of Education and Workforce uses this information for reimbursement eligibility requirements. Failure to properly report the number of eligible meals resulted in the School District being under reimbursed. The School District should develop control policies and procedures to help ensure the number of meals served and reported to DEW agree to the respective summary meal count forms and the meals served / tabulated on the point-of-sale system CN-6 and CN-7 Reports. The procedures should include an independent review of the meal counts manually entered into the point-of-sale system, based upon the daily meal count forms, and the meal counts manually entered into CRRS, based upon the point-of-sale system CN-6 and CN-7 reports, by an employee not associated with the computer entry. These review procedures should be acknowledged by initials / signatures on the point-of-sale system reports and the CRRS Site Claim Reports. If there are errors or discrepancies between the point-of-sale reports and the amounts reported to DEW, the School District should maintain supporting documentation to demonstrate the meals reported to DEW were accurate and complete.