Finding 1163058 (2024-002)

2024-002 – U.S. Department of Agriculture Assistance Listing #10.553-10.582 School Nutrition Cluster for the period July 1, 2023, through June 30, 2024 Criteria: Per 2 CFR §200.303, the non-federal entity must 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. Condition: During our audit of the School Nutrition Cluster, we noted that the Town lacked adequate documentation of internal controls to ensure the accuracy and completeness of required federal reporting. Specifically, the Town did not have documented review procedures in place for the submission of monthly claim forms. Cause: There are no formalized policies and procedures governing the reporting process, including oversight responsibilities and documentation standards. Effect: Without adequate controls, there is an increased risk that reports submitted to the federal awarding agency may contain errors or omissions, potentially leading to improper reimbursement amounts. This could affect funding decisions and compliance with federal requirements. Recommendations: We recommend that the Town implement formal policies and procedures for the preparation and review of federal reports under the School Nutrition Cluster. This should include documented supervisory review, reconciliation to source documentation, and retention of supporting materials to substantiate reported data.