Finding 1094188 (2024-002)

Federal Agency: U.S. Department of Agriculture Passthrough Entity: Missouri Department of Elementary and Secondary Education Assistance Listing Number and Federal Program: Child Nutrition Cluster – 10.553 School Breakfast Program, 10.555 National School Lunch Program, 10.559 Summer Food Service Program for Children. Compliance Requirement: L. Reporting Criteria: Per 7 CFR 210.8(a) and 7 CFR 220.11(c), the District is required to have proper internal controls over the reporting of monthly meal counts to ensure that information submitted for free and reduced meals is accurate and complete. The monthly meal counts are reported to DESE for reimbursement based on the number of free and reduced meals served during the month. The amount of reimbursement will depend on the number of each type of meal and whether it was for breakfast or lunch. In accordance with 7 CFR 210.7(c)(1)(i), the District is required to correctly determine eligibility for free and reduced price lunches and afterschool snacks based on the requirements under 7 CFR 245. Under 7 CFR 245.6(c)(4), if the student is not automatically eligible under direct certification or another exception, the District must use income information provided by the household of the student to calculate the student's eligibility for free or reduced prices. The District makes applications available to households so that their income can be reported to the District for such purposes. The District then calculates the income on the applications and references the Income Eligibility Guidelines for the school year to determine if households are eligible or ineligible for free or reduced meals. Condition: During our testing, we noted a lack of oversight regarding the monthly Claims for Reimbursement. There was no review noted before they were submitted to DESE nor was there a subsequent review performed after submission. It was noted that the Claims for Reimbursements for February and April were not completed correctly. The Lunch and Breakfast meal counts were switched on both monthly claims. We also noted that the applications for free and reduced lunch were not being reviewed by the Food Service Director for accuracy. We noted one application during testing that had illegible numbers and, therefore, the total income was not clear. The household was determined to be free by the District but there was no clarification to confirm the illegible numbers were correct as assumed. Per discussion with the Food Service Director, they agreed that the income number could have been improperly calculated and that the household could have been incorrectly determined as eligible for free meals. Cause: Control procedures were not in place to ensure that monthly Claims for Reimbursements and Free and Reduced applications were accurately entered/calculated before being submitted. Effect: Without timely review of reports before submission, requested grant revenue can be understated or overstated when based on erroneous submitted grant reports, In addition, other grant noncompliance can be overlooked. This could result in missed funding, excess funding, or other adverse conditions with the grantors. Questioned Costs: No questioned costs noted. Perspective Information: This appears to be a systemic issue as two out of the four months tested contained errors where the Lunch and Breakfast meal counts were switched on the Claims for Reimbursement form. Identification of Repeat Findings: Not a repeat finding. Recommendation: We recommend that the District develop written procedures that require a monthly review by another party for Claims for Reimbursement for the food service programs. This should be done prior to submitting the reimbursement claim to DESE. The review should be done to ensure that all information has been entered, is accurate, and is classified in the appropriate line to ensure reimbursements are for the correct amounts. In addition, we recommend that the District develop written procedures that require Free and Reduced Applications, including the calculations of income, be reviewed before being entered into the District’s tracking program. The review should be done to ensure that calculations of household income and determination of eligibility are correct when referenced to the Income Eligibility Guide.