Finding Text
Non-Federal entities must establish and maintain effective internal controls over Federal awards that provide reasonable assurance that the non-Federal entity is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In addition, Section 9(b)(3) of the NSLA and regulations at 7 CFR 245.6a(c)(1) established requirements for LEAs in conducting verification of eligibility for free and reduced price meals based on applications in participating schools and states, in part, the verification process is required when eligibility is determined through the application process. During fiscal year 2024, the District participated in Child Nutrition Cluster programs, for which the federal government reimburses the District for eligible children. The School District is required to establish a child's eligibility to receive program benefits. The District accepted online applications for free and reduced meals, with which eligibility was determined based on several factors, including, but not limited to family size and income. Payschools, the District’s Point of Sale (POS) software, selects the student to be verified based on the number of online/paper applications received. The Food Service Supervisor is required to verify income eligibility with the application signer. If income documentation is not received or the income documentation is not below the USDA guidelines for free/reduced lunches, the Food Service Supervisor is to notify the application signer that there will be a change in eligibility status and report those changes to the Ohio Department of Education and Workforce (DEW). These changes must also be changed in the POS software system. For fiscal year 2024, the eligibility process was 100% online through PaySchools to determine eligibility for free and reduced meals. When an application was received, the Food Service Supervisor would input the information into Payschools for processing with no additional review, rather than applications being in pending status until reviewed and approved by the District. As such, the District had no procedures in place to ensure the system determined the proper eligibility status based on the information provided in the application. In addition, the Food Service Supervisor sent out the required documents for the three students selected for verification; however, did not receive the required income documents to determine if the eligibility status on the student application was correct for each student selected. In addition, the Food Service Director selected one additional student for verification; however, did not receive the required documentation. Finally, the Food Service Supervisor reported there were no changes in eligibility status through the verification process with DEW and those students should have been marked as denied. This is the result of the District not reviewing policies and procedures in place and the verification requirements to report the proper status of those students selected for verification. Failure to implement controls over all eligibility applications could result in ineligible students receiving benefits. In addition, failure to follow-up on and change the eligibility status of those students who do not satisfy the verification requirements could result in questioned costs and reduced funding. The District should implement control procedures for online applications to help ensure students are properly marked as paid, free or reduced. In addition, the District should establish policies and procedures to ensure that all students selected for income verification are processed correctly with changes in their free/reduced status as well as report the correct finding to DEW.