Finding Number: 2023-005
Assistance Listing, Federal Agency, and Program Name 10.558, U.S. Department of Agriculture, Child Care and Adult Food Program
Federal Award Identification Number and Year 15-016-271P-00
Pass through Entity Illinois State Board of Education
Finding Type Material we...
Finding Number: 2023-005
Assistance Listing, Federal Agency, and Program Name 10.558, U.S. Department of Agriculture, Child Care and Adult Food Program
Federal Award Identification Number and Year 15-016-271P-00
Pass through Entity Illinois State Board of Education
Finding Type Material weakness
Repeat Finding No
Criteria Per 2 CFR 200.303(a), the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government," issued by the Comptroller General of the United States, or the "Internal Control Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Other requirements include:
a) Per 7 CFR 226.10(c)(1), prior to submitting its consolidated monthly claim to the State agency, each sponsoring organization must perform edit checks on each facility's meal claim; per 7 CFR sections 226.16(g) and (h), a sponsoring organization must disburse advance and meal reimbursement payments to centers and day care homes under its sponsorship within five working days of receiving them from its state agency.
b) Per 7 CFR 226.15(f), each sponsoring organization of day care homes shall determine which of the day care homes under its sponsorship are eligible as tier I day care homes
c) Communication from the passthrough entity to return to pre COVID 19 monitoring, as required under 7 CFR 226.16(d)(4)(iii), effective October 1, 2022, where sponsoring organizations are required to perform onsite monitoring of each of its facilities three times every year, which includes requirements to ensure the amount of time between reviews does not exceed six months (unless review average is used).
Condition A lack of documented controls as evidence of supervisory review and segregation of duties to ensure compliance with Federal program requirements, specifically over:
a) monthly expenditure reports submitted to the passthrough entity
b) tier (day care home eligibility) determinations
c) subrecipient monitoring
Questioned Costs None
Identification of How Questioned Costs Were Computed N/A no instances of material noncompliance noted that would result in questioned costs
Context
a) During testing a sample of 5 monthly expenditure submissions, we noted no formally documented supervisory review in place. Additionally, during testing of 40 disbursements to providers, we noted no formally documented supervisory review to ensure disbursements to providers are made within 5 working days of receipt from the State passthrough entity.
b) While gaining an understanding of controls over tier (day care home eligibility) determinations, we noted no controls established to ensure supervisory review of these determinations.
c) While testing a sample 40 provider monitoring visits, we noted 3 visits without evidence of supervisory review and 6 visits where the visit was completed and validated in the software by the same individual. Additionally, we noted 16 day care homes and 2 day care centers with less than the required 3 annual on site monitoring visits for the year, and 15 day care homes and 2 day care centers where onsite monitoring performed were more than the required 6 months apart.
Cause and Effect A lack of effectively designed, implemented, and operating controls in any of these areas could result in a material noncompliance with program requirements or Uniform Guidance.
Recommendation We recommend management formalize documentation of a supervisory review of:
a) monthly expenditure submissions before submitting to the passthrough entity, including documented supervisory controls to ensure disbursement timeliness is met within 5 working days as part of this review;
b) of data used in making tier/eligibility determinations for accuracy and completeness; and
c) of subrecipient monitoring.
Additionally, we recommend management work with its passthrough entities to confirm compliance requirements, especially when compliance requirements change as the result of ending or expiring waivers and flexibilities.
Planned Corrective Action Plan –Organization will document process that is used for second review of the monthly expenditure submissions by 04/30/2024. There are no instances of the Organization not providing funds to provider within the mandated 5 days, however, the Organization will document the process for provider payments within 5 days by 04/30/2024. The software required to be used by the funder for management of the program does have limitations on how the data input for making tier/eligibility determinations second review is documented. Organization will design process to document this second review has occurred by 04/30/2024. Staffing shortages coming out the COVID-19 waivers resulted in the inability to perform all required Subrecipient monitoring. This staffing shortage was rectified by 08/31/2023.
Contact person responsible for corrective action: Loukisha Pennex, Chief of Youth and Family Potential, Anjanette Brown, CFO and Teresa Rodriguez, Senior Director of Grants and Contracts.
Anticipated Completion Date:
April 2024