Finding Text
Assistance Listing Number, Federal Agency, and Program Name - 10.558, U.S. Department of Agriculture, Child Care and Adult Food Program
Federal Award Identification Number and Year - 15-016-271P-00, 2024 and 2023
Pass through Entity - Illinois State Board of Education
Finding Type - Material weakness and material noncompliance with laws and regulations
Repeat Finding - Yes
2023-005
Criteria - Per 2 CFR 200.303(a), the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Other requirements include the following:
(a) Per 7 CFR 226.15(f), each sponsoring organization of day care homes shall determine which of the day care homes under its sponsorship are eligible as tier I day care homes.
(b) As required under 7 CFR 226.16(d)(4)(iii), sponsoring organizations are required to perform on site monitoring of each of its facilities three times every year, which includes requirements to ensure the amount of time between reviews does not exceed six months (unless review average is used).
Condition - There was a lack of documented controls as evidence of supervisory review and segregation of duties to ensure compliance with federal program requirements, specifically over the following:
a) Tier (day care home eligibility) determinations
b) Subrecipient monitoring
Noncompliance was identified for subrecipient monitoring as noted in the context below.
Questioned Costs - None
Identification of How Questioned Costs Were Computed - N/A - No instances of noncompliance result in questioned costs.
Context
(a) While gaining an understanding of controls over tier (day care home eligibility) determinations, we noted no controls established to ensure supervisory review of these determinations.
(b) While testing a sample of 56 provider monitoring visits, we noted 35 day care homes and 1 day care center with less than the required 3 annual on site monitoring visits for the year and 40 day care homes for which time between on site monitoring visits exceeded six months.
Cause and Effect - A lack of effectively designed, implemented, and operating controls in any of these areas could result in future material noncompliance with program requirements or the Uniform Guidance in the future. The deficiency in operating controls for subrecipient monitoring resulted in noncompliance for fiscal year 2024.
Recommendation - We recommend management formalize documentation of a supervisory review of the following:
(a) Data used in making tier/eligibility determinations for accuracy and completeness
(b) Subrecipient monitoring
Views of Responsible Officials and Corrective Action Plan - Management agrees with the recommendations and plans the following:
(a) Management is working with the Software company staff to develop software based evidence of second review. If this is not possible, a tracking mechanism external to the software will be developed by March 2025.
(b) Under management’s supervision, monitoring visits are being brought current on the contract currently in place and will be completed as required by end of the contract. A tracking mechanism has been put in place to ensure compliance with the required number of monitoring visits and timeliness.