Finding Text
U.S. Department of Agriculture
Assistance Listing Numbers: 10.553 & 10.555
Federal Program: Child Nutrition Cluster (School Breakfast Program (SBP) & National School Lunch Program (NSLP))
Pass-Through Entity Identifying Numbers: 71402401 and 71302401
Pass-Through Entity: Texas Department of Agriculture/Texas Education Agency
Federal Award Year: 2023-2024 School Year / Fiscal Year ending June 30, 2024
Criteria: The District is required to verify the eligibility of a sample of students who qualified for free or reduced price meal eligibility. In the event eligibility cannot be verified as part of this process, the student should be reclassified from the free or reduced category to the paid category. The District’s internal controls should be sufficient to ensure that any required changes to student meal category after the verification process is complete occurs.
Condition: During our audit we noted that all nine families selected for eligibility verification did not provide verification information to the District to confirm their household income which is what determines their eligibility for free or reduced price meals. We noted the District had updated the household income data within the NutriKids software pertaining to information received from the eligibility verification process; however, the students’ status was inadvertently not changed from free or reduced to paid in the NutriKids program due to the final step in the process not being completed by District personnel, which involved changing the status of the student’s information to the paid status in the software. This resulted in each student remaining listed as free or reduced within the NutriKids software for the 23-24 school year. There was one family that submitted a new application with verification of income subsequent to this process and that student’s status was properly updated at that time.
Context: For the fiscal year ended June 30, 2024, the District did not have the policies and procedures in place to ensure the updated eligibility verification information was entered in a manner to implement the necessary update to each student’s status in the instances in which the District was unable to verify their eligibility for free or reduced price meals to the paid meal category.
Effect or Potential Effect: The District could be reimbursed thru the NSLP program for free or reduced meals for students ineligible for these price reductions, rather than being reimbursed for these students at the paid rate, which is lower than that for students qualifying for free or reduced meal prices.
Questioned Costs: $1,944. This amount was arrived at by determining the number of meals served to each student after their status should have changed due to the results of the verification process. Total reimbursements received by the District for these students during that time frame was $4,442. If these students would have been properly reclassified to the paid status, the correct reimbursement amount would be $2,498. The difference between these two amounts is the $1,944 identified as a questioned cost above. This amount was not considered to be material pertaining to the major program being audited.
Cause: The District did not have sufficient internal controls in place to ensure the reclassification from free or reduced to paid for students unable to verify their eligibility for the free or reduced price meals. District staff had inadvertently believed the NutriKids system made this update automatically and did not review the status of each student to verify this update actually had occurred.
Recommendation: We recommend the District implement additional policies and procedures to monitor the verification of eligibility for all students qualifying for free or reduced price meals. This includes updating the NutriKids settings to choose to automatically update the status of students after the verification process is complete and information entered into NutriKids and manually verifying the change has taken place.
Views of Responsible Official: The Board of Trustees has designated the responsibility of overseeing the accounting and financial reporting to the District’s superintendent, Dr. Jeff Byrd. See the District’s responses to this finding in the letter provided by the District on page 103.