Finding Text
FINDING 2024-005
Subject: Child Nutrition Cluster - Reporting
Federal Agency: Department of Agriculture
Federal Programs: School Breakfast Program, National School Lunch Program,
Summer Food Service Program for Children
Assistance Listings Numbers: 10.553, 10.555, 10.559
Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Reporting
Audit Findings: Material Weakness, Modified Opinion
Repeat Finding
This is a repeat finding from the immediately prior audit report. The prior audit finding number was
2022-003.
Condition and Context
An effective internal control system was not designed or implemented at the School Corporation to
ensure compliance with requirements related to the grant agreement and the Reporting compliance
requirement.
Monthly Sponsor Claims for Reimbursement (Claims) were submitted to the Indiana Department
of Education based upon the number of meals served for the month. The Claims were prepared by the
Food Service Manager or food service management company (FSMC) employee.
INDIANA STATE BOARD OF ACCOUNTS
26
GARY COMMUNITY SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
The School Corporation maintained manual meal count records. A point-of-sale system (POS) was
used for some schools in some months, but it was not consistent. The reports from the POS identified
second student meals and staff meals that were included in the amounts claimed for reimbursement. For
all three Claims tested, there were differences between the Claims submitted and the School Corporation's
detail meal count reports, resulting in over and under reporting and reimbursement. The Claims tested
contained the following errors:
The December 2022 claim reported 41 more meals served than the eligible meals per the
School Corporation's detail meal count reports, which resulted in overclaimed reimbursement
totaling $109. Of this total, $59 (22 meals) was due to improperly claiming second
student or staff meals.
The March 2023 claim in total reported more meals served than the eligible meals per the
School Corporation's detail meal count reports, which resulted in overclaimed meals
totaling $4,254.
Of this total, $4,144 was due to claiming second student or staff meals, totaling $1,035, for
breakfast and lunch. The School Corporation also underclaimed snacks by 421, which
resulted in under reimbursement of $455. Finally, the claim also contained overcount
errors of 136 meals, resulting in overclaimed reimbursement of $565.
The August 2023 claim reported fewer meals served than the eligible meals per the School
Corporation's detail meal count reports, which resulted in underclaimed meals in net
totaling $11,474. The School Corporation did not claim meals served on August 31, 2023,
totaling 3,879 meals. This resulted in underclaimed meal reimbursement totaling $13,767.
The School Corporation also claimed 141 second student and staff meals, which resulted
in overclaimed reimbursement totaling $480. Finally, the claim also contained overcount
errors of 497 meals, resulting in overclaimed reimbursement of $1,813.
The lack of internal controls and noncompliance were systemic issues throughout the audit period.
Criteria
2 CFR 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over the Federal award that provides
reasonable assurance that the non-Federal 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). . . ."
2 CFR 200.302(b) states in part:
"The financial management system of each non-Federal entity must provide for the following
. . .
(2) Accurate, current, and complete disclosure of the financial results of each Federal
award or program in accordance with the reporting requirements set forth in §§ 200.328
and 200.329. . . ."
INDIANA STATE BOARD OF ACCOUNTS
27
GARY COMMUNITY SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Cause
The School Corporation did not have effective internal control procedures in place over the Claims
submitted. The Claims did not contain evidence of an oversight or review process in place to prevent, or
detect and correct, errors. The Claims were prepared based upon a summary sheet prepared by the FSMC
employee and were not verified back to the source records.
Effect
Noncompliance with the grant agreement and the compliance requirement could result in the
repayment of federal funds.
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended that the School Corporation's management establish a system of internal
controls and develop policies and procedures over the preparation and review of claims to ensure appropriate
reviews, approval, and oversight are taking place. Additionally, management should develop policies
and procedures to ensure that the FSMC provides the School Corporation with complete and accurate
information for all claim submissions.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.