Finding Text
FINDING 2024-004
Subject: Child Nutrition Cluster - Suspension and Debarment
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 Number and Year (or Other Identifying Number): SY 2022-2023
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Procurement and Suspension and Debarment
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
2022-004.
Condition and Context
An effective internal control system was not in place at the School Corporation in order to ensure
compliance with requirements related to the Child Nutrition Program and the Procurement and Suspension
and Debarment compliance requirements.
Suspension and Debarment
Prior to entering into subawards and covered transactions with federal award funds, recipients
are required to verify that such contractors and subrecipients are not suspended, debarred, or
otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods
and services awarded under a nonprocurement transaction (i.e., grant agreement) that are
expected to equal or exceed $25,000. The verification is to be done by checking the SAM
exclusions, collecting a certification from that vendor, or adding a clause or condition to the
covered transaction with that vendor.
During the audit period, the School Corporation had covered transactions over $25,000 from
five vendors charged to the School Lunch fund, which required suspension and debarment
procedures. For two of the five vendors, there was no evidence provided to verify that the
vendor was checked for suspension and debarment prior to entering into the transaction. The
covered transactions totaled $61,183.
The lack of internal controls and noncompliance were isolated to fiscal year 2022-2023.
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). . . ."
INDIANA STATE BOARD OF ACCOUNTS
22
GOSHEN COMMUNITY SCHOOLS
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
2 CFR 180.300 states:
"When you enter into a covered transaction with another person at the next lower tier, you must
verify that the person with whom you intend to do business is not excluded or disqualified. You
do this by:
(a) Checking the SAM.gov Exclusions; or
(b) Collecting a certification from that person; or
(c) Adding a clause or condition to the covered transaction with that person."
Cause
The School Corporation's management had not developed a system of internal controls in
2022-2023 that would have ensured compliance with the Procurement and Suspension and Debarment
compliance requirement.
Effect
The failure to establish internal controls enabled noncompliance to go undetected. The failure to
comply with the grant agreement and the compliance requirement could have resulted in the loss of federal
funds to the School Corporation.
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended that the School Corporation's management establish and implement internal
control procedures to ensure compliance with the grant agreement and the Procurement and Suspension
and Debarment compliance requirement. This should include performing a suspension and debarment
check on an annual basis to verify vendors charged to funds which are federally funded are not suspended
or debarred.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.