Corrective Action Plans

FINDING 2024-003 Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Material Weakness Context: During sample testing of 60 students for eligibility, we noted 14 instances where there was no documented review by someone other than the individual making the eligibility determination. The lack of review was isolated to paper applications. Contact Person Responsible for Corrective Action: Joyce Hulsman Contact Phone Number: 812-678-2781 Views of Responsible Official: We concur with the finding. Description of Corrective Action Plan: A procedure has been established to ensure dual validation and paper copies are in compliance. Anticipated Completion Date: Already completed.

Views of Responsible Officials and Planned Corrective Action: The Arkansas Department of Education (ADE), Division of Elementary and Secondary Education (DESE), Health and Nutrition Unit (HNU), concur with the finding. The HNU Finance staff implemented procedures for meal claim payment requests which include an initial and final review of all requests to be conducted by two (2) staff. The review process includes, but is not limited to, ensuring expenditures are assigned correct codes related to the appropriate funding source within the appropriate grant year, mitigating the Child Nutrition Program (CNP), Child and Adult Care Food Program (CACFP) Sponsor Administrative expenditure errors going forward. When the request is determined to be compliant, the Associate Director of Finance and Training approves payments before being forwarded to the ADE Finance team for payment. Anticipated Completion Date: March 15, 2025 Contact Person: Sheila Chastain Associate Director Arkansas Department of Education, DESE, Nutrition Services #4 Capitol Mall, Box #12 Little Rock, AR 72201 (501) 324-9502 Sheila.Chastain@ade.arkansas.gov Pamela Burton Director Arkansas Department of Education, DESE, Nutrition Services #4 Capitol Mall, Box #19 Little Rock, AR 72201 (501) 320-8978 Pamela.Burton@ade.arkansas.gov

Views of Responsible Officials and Planned Corrective Action: Director of Child Nutrition will have a secondary person review claim before submitting to state department, to ensure accurate keying of data.

The Midland School District will ensure all criteria and specific requirements are met for the District in processing free and reduced price meals for the District’s child nutrition program and classify them in accordance with federal guidelines established by the U.S. Department of Agriculture. Applications will include the required information to be considered for free and reduced price meals.

A.      The District will establish controls to ensure free and reduced price meal applications are properly completed by the applicant before processing.

B.      The District will ensure that a complete application includes the names of children for whom the application is made.

C.      A SNAP case number of the household for whom the application is made if person has SNAP.

D.      The signature of an adult household member has been submitted on the paperwork. (this may be a foster parent or an official of a court or other agency with responsibility for the child.

E.       The names of all household members.

F.       The amount of current income by each member and the source of the income.

G.      The last four of the social security number of the adult household member who signs the application or an indication that the household member does not have a social security number (box checked for “no social security number”) Indication that the child is a foster child

Program: AL 10.553 – School Breakfast Program; AL 10.555 – National School Lunch Program; AL 10.556 – Special Milk Program for Children; AL 10.559 – Summer Food Service Program for Children; and AL 10.582 – Fresh Fruit and Vegetable Program – Reporting Corrective Action Plan: NDE has been able to identify and correct the reporting errors and has begun working to submit all the required reports immediately. Additionally, FFATA reporting procedures will be updated and a monthly calendar reminder set each month to ensure the reports are submitted in a timely fashion. Contact: Kayte Partch / Kayte.partch@nebraska.gov Anticipated Completion Date: April 30, 2025

Due to the recent audit performed on the 23/24 school year a corrective action plan is needed to ensure internal controls are in place for applications entered in Payschools. This will ensure that all applications are properly marked as paid, free or reduced in the Payschools system. As the food service supervisor, I will verify that Payschools has the correct income guidelines provided by ODE for the current school year in the system. Furthermore, I will randomly pull 10% of portal applications that are entered through Payschools Central to ensure the correct determination was processed according to the income guidelines. Documentation will be kept on file of the applications that are reviewed. This plan will meet the necessary requirement to ensure that Payschools determined the proper eligibility status based on the information provided on the applications. Anticipated completion date: 6/30/2025

The District beginning in FY 2025 became part of the Community Eligibility Program allowing for all students to receive free lunch and breakfast. As such, the District is not using Pay Schools to determine eligibility.

Corrective Action: Child Nutrition will incorporate separation of duties when calculating the reimbursement for meals. At least one on—site review of the meal counting and claiming system for each school. Avery Johnson, Business Manager Robert Sanders, Superintendent Corrective Action Start Date: February 18, 2025

Corrective Action: The Business Manager will calculate the indirect \ cost rate using the rate provided by MDE for the expenditures occurred. The calculation will be reviewed and signed off on by the Federal Programs Director and Child Nutrition Director. This calculation will take place at year end once expenditures are booked. Avery Johnson, Business Manager Robert Sanders, Superintendent Corrective Action Start Date: February 18, 2025

Corrective Action: The district will strengthen internal controls on the employee contract and employee board approval process. There will be checks and balances between Human Resources and the Business Office before any recommendations are presented to the board. Avery Johnson, Business Manager Robert Sanders, Superintendent Corrective Action Start Date: February 18, 2025

Corrective Action: Child Nutrition will provide proof of documentation on all vendors illustration that they are not suspended or debarred. Also, invoices will be a part of the procurement packet. lt will be uploaded to the financial software system for primary filing and filed physically as a secondary method. Avery Johnson, Business Manager Robert Sanders, Superintendent Linda Little, Child Nutrition Director Corrective Action Start Date: February 18, 2025

Corrective Action Plan Finding 2024-001 Criteria: Recipients of federal awards must follow the procurement standards set out at 2 CFR section 200.317 through 200.326. They must use their own documented procurement procedures, which reflect applicable State laws and regulations, provided that the procedures conform to applicable Federal law and the procurement requirements identified in 2 CFR part 200. Recipients “must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price” 2 CFR section 200.318(i). The School’s procurement procedures include the requirement to maintain sufficient documentation of the history of procurement. The School also has procedures to identify procurement transactions requiring competitive bids or proposals. Auditor Recommendation: We recommend the Academy ensure it 1) maintains documentation of the history of procurement and 2) monitors compliance with documentation requirements. Auditee Response/ Corrective Action Plan: The Academy will review its procurement policies and internal controls and ensure timely action is taken when noncompliance is identified. Person Responsible: Dane Roberts, Executive Director and Randi Limb, Business Manager Timeline: All future contract solicitations will follow the required procurement standards.

FINDING 2024-002 Finding Subject: Child Nutrition Cluster - Eligibility Contact Persons Responsible for Corrective Action: Lacey Sturgeon, Food Service Director & Melissa Bell, Assistant Food Service Director Contact Phone Number and Email Addresses: (765) 893-4445 / lsturgeon@msdwarco.k12.in.us & mbell@msdwarco.k12.in.us Views of Responsible Officials: Option 1: We concur with the findings Description of Corrective Action Plan: Stronger internal controls are needed in regards to verification of Direct Certifications. We plan to make sure once the certifications are entered that the Food Service Director will check the work of the Assistant Food Service Director and show her approval by signing and dating each final report. Anticipated Completion Date: Effective Immediately

FINDING 2024-004 Finding Subject: Child Nutrition Cluster-Activities Allowed or Unallowed, Allowable Costs/Cost Principles Summary of Finding: Payments made based on statements or no supporting documentation. The School corporation did not properly implement a process to identify and assess internal and external risks, or monitor internal control activities to ensure they were operating effectively. Contact Person Responsible for Corrective Action: Melissa Embry Contact Phone Number and Email Address: 812-547-2637 melissa.embry@cannelton.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: Invoices are already being given to the Corporation Treasurer monthly and are being attached to each Accounts Payable Voucher to show exactly what is being paid for. Cannelton management will establish a proper system of internal controls including policies and procedures related to risk assessment and monitoring activities within the federal program. Anticipated Completion Date: The noncompliance was corrected as of January 2025. The additional controls will be implemented by August 2025.

FINDING 2024-003 Finding Subject: Child Nutrition Cluster – Internal Controls Summary of Finding: There was a lack of internal controls. Additionally, the School corporation did not properly implement a process to identify and assess internal and external risks, or monitor internal control activities to ensure they were operating effectively. Contact Person Responsible for Corrective Action: Melissa Embry Contact Phone Number and Email Address: 812-547-2637 melissa.embry@cannelton.k12.in.us Views of Responsible Officials: We concur with the finding. Description of Corrective Action Plan: The food service director now gets all the reports and appropriate supporting documentation, including receipts and disbursements reports, together and goes over it with the high school secretary/deputy treasurer and is then submitted by the secretary/deputy treasurer, printed off and given to the corporation treasurer. The corporation treasurer has a copy of the submission and compares that to what is deposited. All claims have always been approved by the School Board. Cannelton management will establish a proper system of internal controls including policies and procedures related to risk assessment and monitoring activities within the federal program. Anticipated Completion Date: August 2025

Condition: The Disrict did not maintain documentation supporting that the required calculations for PLE were completed. Plan: Policies and procedures will be implemented to ensure that the required PLE calculations are being made and documented. Anticipated Date of Completion: June 30, 2025. Name of Contact: James Dunlap, Superintendent. Management Response: Management does not disagree with this finding. In future years, the District will document their PLE calculations.

Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program AL Numbers: 10.553, 10.555 Federal Award Numbers and Years: FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Qualified Opinion Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the simplified acquisitions procurement method of the Procurement and Suspension and Debarment compliance requirement. Context: During the audit period, we tested two vendors that fell within the Small Purchase procurement threshold. Small purchases are those vendors that the School Corporation has purchased between $10,000 and $150,000 of products and goods from during the fiscal year. For one of the two vendors selected for testing, we noted the School Corporation did not obtain price or rate quotations from other vendors or document the basis for purchasing from the vendor that was utilized. The School Corporation had $134,542 and $117,589 of expenditures with the vendor for fiscal years 2023 and 2024, respectively. Corrective Action Plan: To meet the conditions of the grant agreement, Caston School Corporation will keep record of all vendors that are outside of our NIESC buying agreement. Vendors on this list will be identified as having an RFP on file or requiring an RFP to purchase. The director or the director’s purchasing designee will consult the list before ordering from the vendor. The School Corporation will ensure that the appropriate number or bids are obtained or will document the reasoning behind why the appropriate number of bids could not be obtained. The School Corporation will run a suspension and debarment check on vendors prior to entering into a contract. Person responsible for implementation and projected implementation date: The Food Services Director and/or the Director’s designee, as well as the Treasurer will be responsible for implementation of the corrective action plan, which will be done immediately.

Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Significant Deficiency Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the eligibility compliance requirement. Context: During the testing of internal controls over eligibility determinations for free and reduced meals, we noted management was unable to provide support for three of the 60 applications selected for testing. Additionally, for one of the 60 selections, the student was improperly classified as reduced when the annual income per the student’s application exceeded the corresponding threshold for that determination. Corrective Action Plan: The School Corporation will implement internal control procedures to ensure the applications are filed and maintained in a secure manner. The School Corporation will also implement internal control procedures to ensure that applications are formally reviewed by the Food Services Director and the Treasurer, so that applicants are accurately denied or approved for free or reduced meals. Person responsible for implementation and projected implementation date: The Corporation’s Food Services Director and Treasurer will be responsible for implementing the corrective action, which will be implemented immediately.