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FINDING 2024-005 Subject: Child Nutrition Cluster - Special Tests and Provisions - Paid Lunch Equity Federal Agency: Department of Agriculture Federal Program: National School Lunch Program Assistance Listings Number: 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): SY 22-23, SY 23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Paid Lunch Equity Audit Finding: Material Weakness Condition and Context The School Corporation's management had not developed a system of internal controls that would ensure compliance with the Paid Lunch Equity compliance requirements. The Food Service Director is solely responsible for monitoring and applying for the necessary waivers for the Special Tests and Provisions - Paid Lunch Equity compliance requirement with no oversight or review. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 25 NORTH LAWRENCE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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). . . ." Cause Due to turnover of staffing in both the food service personnel and the School Corporation's administrative office, management was not aware of the need for a system of internal controls that included oversight or review that would have ensured the compliance with the grant agreement and the Special Tests and Provisions - Paid Lunch Equity compliance requirement. Effect Without a proper system of internal controls, the School Corporation was unable to ensure the proper calculations were prepared or that waivers were obtained to ensure compliance with the Special Tests and Provisions - Paid Lunch Equity compliance requirement. Noncompliance with the grant agreement and the Special Tests and Provisions - Paid Lunch Equity compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls that includes review and oversight to ensure proper calculations are completed or that waivers are obtained to ensure compliance with the grant agreement and the Special Tests and Provisions - Paid Lunch Equity compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.