Finding Text
US Department of Agriculture
Federal Financial Assistance Listing #10.558
Child and Adult Food Care Program (CACFP)
Cash Management
Material Weakness in Internal Control Over Compliance
Criteria: CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Organization is managing the federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award.
Condition: The Organization was unable to provide adequate documentation to support the number of meals claimed for reimbursement.
Cause: The Organization did not properly reconcile its reimbursement claims to its meal counts included in its attendance records.
Effect: Meals claimed for reimbursement by the Organization were not properly supported by its internal records.
Questioned Costs: None reported
Context: Reimbursement to institutions is based upon the actual and verifiable daily counts of meals served by meal type (breakfast, lunch, snack and supper) and eligibility status (paid, reduced, free) multiplied by the applicable meal rate of reimbursement. A sample of four monthly reimbursement requests made by the Organization subject to the reporting requirement was selected for testing. Of the four monthly reimbursement requests selected, each of them contained variances between the reported number of meals served not agreeing to the Organization’s meal counts included in attendance records for the selected month. Of the items tested, meal counts were overstated by 3 meals for one meal type (breakfast) on one reimbursement request and understated by a total of 384 meals for other meal types (breakfast, lunch and snack) on the four monthly reimbursement requests.
Repeat Finding from Prior Years: No
Recommendation: We recommend that management continue to evaluate its processes and controls to ensure that reimbursement requests for meals are properly reconciled to supporting documentation.
Views of Responsible Officials: Management is aware of the deficiency in internal control over compliance. Management is in the process of reviewing its existing controls over the tracking and submitting of its meal counts included in its attendance records for reimbursement.