Finding Text
50000 – Reporting
Federal Agency: U.S. Department of Agriculture
Pass-Through Entity: California Department of Education (CDE)
Program Name: Child Nutrition Cluster
Assistance Listing Number: 10.553, 10.555
Compliance Requirement: L (Reporting)
Type of Finding: Material Weakness, Material Noncompliance
Criteria or Specific Requirements
Per Title 7, U.S. Code of Federal Regulations, Subtitle B, Chapter II, Subchapter A, Parts 210.8 and 220.11, School Food Authorities (SFA) must establish internal controls which ensure the accuracy of meal counts prior to the submission of the monthly Claim for Reimbursement. Prior to submission of a monthly Claim for Reimbursement, each school food authority shall review the breakfast and lunch count data for each school under its jurisdiction to ensure the accuracy of the monthly Claim for Reimbursement. The objective of this review is to ensure that monthly claims include only the number of free, reduced price and paid breakfasts and lunches served on any day of operation to children currently eligible for such meals. SFA staff shall maintain on file each month's Claim for Reimbursement and all data used in the claims review process, by school.
Condition
The District did not have sufficient controls in place to ensure that monthly Claims for Reimbursement accurately reflected the numbers of meals served. There is no indication that a second person reviews data submissions. We noted discrepancies between the daily meal counts and the monthly Claims for Reimbursement. The system reports provided to the auditor for the six months selected for testing did not agree to the meal counts reported on the Claims for Reimbursement. Discrepancies included the misclassification of 2,054 breakfast meals as severe need rather than basic in each month tested and a misstatement of the number of 163 lunch meals served. The misclassification of breakfast meals resulted in excess revenue of $418. The misstatement of the number of lunch meals served resulted in understated revenue of $867.
Cause
The condition identified appears to have materialized due to the District’s lack of established procedures to ensure compliance with the requirements under Title 7, U.S. Code of Federal Regulations, Subtitle B, Chapter II, Subchapter A, Parts 210.8 and 220.11.
Effect
The District has not complied with the requirements identified in Title 7, U.S. Code of Federal Regulations, Subtitle B, Chapter II, Subchapter A, Parts 210.8 and 220.11.
Questioned Costs
There were no questioned costs associated with the identified condition.
Context/Sampling
The condition was identified through inquiry with District personnel and through review of available supporting documentation for the monthly Claims for Reimbursement. A nonstatistical sample of 3 months out of 12 months were selected for reporting testing, with an additional 3 months selected to include an element of unpredictability.
Repeat Finding
Yes, see prior-year finding 2023-003.
Recommendation
The District should review the requirements stated in Title 7, U.S. Code of Federal Regulations, Subtitle B, Chapter II, Subchapter A, Parts 210.8 and 220.11 and implement procedures to address the control deficiencies currently identified. The District should retain all supporting documentation used to complete the monthly Claims for Reimbursements and ensure the number of meals reported on the Claims for Reimbursements agree to the supporting system reports.