2025-007 CHILD NUTRITION PROGRAM: INADEQUATE CONTROLS OVER STUDENT COUNTS AND FOOD INVENTORY MANAGEMENT Federal Agency: U.S. Department of Agriculture Federal Program Title & ALN: Child Nutrition Cluster - 10.553, 10.555, 10.582 Award Period: 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Compliance Area: Other - Reporting and Inadequate Controls Questioned Costs: Unknown Condition During our walkthrough of the Child Nutrition Program, we identified inadequate internal controls over both student meal counts and food inventory management. The District does not perform the federally required edit checks that compare daily meal counts to attendance or enrollment records, and meal counts are submitted without an independent review to identify discrepancies or anomalies. This lack of oversight increases the risk of inaccurate reimbursement claims. We also observed that the District does not maintain a formal inventory system for food service operations. Approximately 200 lunch trays are served daily, and ingredients are received every two weeks, with milk delivered weekly. However, canned goods, dry goods, and items stored in freezers are not tracked through any formal inventory procedures, and no regular physical inventory counts are performed. As a result, the District cannot demonstrate that USDA‑funded commodities and purchased food supplies are properly safeguarded, accounted for, or monitored. Criteria 7 CFR 210.8(a)(3) requires School Food Authorities to perform daily edit checks, comparing meal counts to attendance records to prevent claiming more meals than eligible. 2 CFR 200.303 requires entities to establish effective internal controls over federal programs, including accurate reporting and safeguarding of assets. USDA guidance and best practices require schools to maintain ongoing inventory records, conduct regular physical inventory counts, and maintain documentation supporting the use and safeguarding of food commodities. Effect The lack of edit checks increases the risk of inaccurate meal claims, potential overclaims, and questioned costs. The absence of inventory controls increases the risk of waste, loss, theft, spoilage, or misuse of USDA‑funded commodities, and prevents the District from demonstrating compliance with federal requirements. Cause The District has not implemented formal written procedures for meal count edit checks or for maintaining inventory records for food service operations. Staff rely on informal practices and have not been trained or directed to conduct federally required reconciliations or inventory counts.