Federal Agency: U.S. Department of Agriculture Pass-Through Entity: California Department of Education Program Name: Child Nutrition Cluster Federal Financial Assistance Listing: 10.553, 10.555, 10.559 Award Identification Number: 15323,15324,13526, 13004 Award Year: 2021-2022, 2022-2023 Compliance Requirement: L. Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria Per Title 7, U.S. Code of Federal Regulations, Subtitle B, Chapter II, Subchapter A, Parts 210.8 and 220.11, School Food Authorities (SFA) must establish internal controls which ensure the accuracy of meal counts prior to the submission of the monthly Claim for Reimbursement. Prior to submission of a monthly Claim for Reimbursement, each school food authority shall review the breakfast and lunch count data for each school under its jurisdiction to ensure the accuracy of the monthly Claim for Reimbursement. The objective of this review is to ensure that monthly claims include only the number of free, reduced-price, and paid breakfasts and lunches served on any day of operation to children currently eligible for such meals. SFA staff shall maintain on file each month's Claim for Reimbursement and all data used in the claims review process, by school. Condition The District did not have sufficient controls in place to ensure that monthly Claims for Reimbursement accurately reflected the numbers of meals served. We noted per review of the results of a forensic investigation, discrepancies between the daily meal counts and the monthly Claims for Reimbursement for various months from December 2021 through June 2023. The discrepancies in meal counts resulted in an approximate excess claim of $3,043,824. Cause The condition identified above resulted from lack of sufficient internal controls over compliance to prevent fraudulent activity related to meal claims. Effect The District has not complied with the requirements identified in Title 7, U.S. Code of Federal Regulations, Subtitle B, Chapter II, Subchapter A, Parts 210.8 and 220.11. Questioned Costs The condition identified resulted in questioned costs of $3,043,824. Context/Sampling: The condition was identified by the District through the results of a forensic investigation reviewing monthly meal claims and supporting documentation for the fiscal years of 2021-2022, 2022-2023, and 2023-2024. Repeat Finding No. Recommendation The District should review the requirements stated in Title 7, U.S. Code of Federal Regulations, Subtitle B, Chapter II, Subchapter A, Parts 210.8 and 220.11 and implement procedures to address the control deficiencies currently identified. The District should retain all supporting documentation used to complete the monthly Claims for Reimbursements and ensure the number of meals reported on the Claims for Reimbursements agree to the supporting system reports.
Federal Agency: U.S. Department of Agriculture Pass-Through Entity: California Department of Social Services Program Name: Child and Adult Care Food Program (CACFP) Federal Financial Assistance Listing: 10.558 Award Identification Number: 13529, 13534 Award Year: 2024-2025 Compliance Requirement: M. Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control over Compliance, Noncompliance Criteria Title 7, Code of Federal Regulations, Part 226.16(d)(4)(iii) requires sponsoring organizations to review each subrecipient facility a minimum of three times per year. Additionally, at least two of the three reviews must be unannounced. Condition At eight of 10 sites tested, the District has not met the minimum monitoring requirements. Five of 10 sites tested had no monitoring visits completed during the year, one of 10 sites tested had only one monitoring visit during the year, and two of 10 sites had only two monitoring visits during the year. Through further discussions with management, it was noted that the District does not perform monitoring visits on the secondary school sites, of which there are seven sites. This resulted in an additional three deviations for a total of 11 deviations noted. Cause The cause appears to be due to lack of internal controls over compliance for subrecipient monitoring. Effect The District is not in compliance with the provisions of Title 7, Code of Federal Regulations, Part 226.16(d)(4)(iii). Questioned Costs None reported. Context/Sampling: A nonstatistical sample of five out of 26 sites was initially tested. This resulted in four instances of noncompliance as follows: three sites had no monitoring visits completed, and one site had only one of the three required monitoring visits completed. In response to this noncompliance, five additional sites were tested for a total of 10 out of 26 sites. This resulted in four additional instances of noncompliance as follows: two sites had no monitoring visits completed, and two sites had only two of the three required monitoring visits completed. Repeat Finding No. Recommendation The District should implement internal controls over subrecipient monitoring to ensure that an adequate number of monitoring visits of each type are made during each year.