Finding Text
FINDING 2024-004
Information on the federal program:
Subject: Child Nutrition Cluster - Reporting
Federal Agency: Department of Agriculture
Federal Program: School Breakfast Program, National School Lunch Program
Assistance Listing Number: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Reporting
Audit Finding: Material Weakness
Criteria: 2 CFR section 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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). . . ."
Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the cash management compliance requirement.
Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the reporting requirements.
Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs.
Questioned Costs: There were no questioned costs identified.
Context: We noted that for all sponsor claim reimbursements in a sample of four claims, the sponsor claim
reimbursement was prepared without a secondary, documented review before the submission of the claim
to ensure the accuracy of the sponsor claim reimbursement summary.
Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2022-003.
Recommendation: We recommended that the School Corporation's management review internal controls surrounding the claim reimbursement process. The secondary, documented review of the request for reimbursement should include a review of the underlying meal count reports to ensure the claim reimbursement request is accurate and complete.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.