Finding Text
Federal Agency: U.S. Department of Agriculture Federal Program Name: Child Nutrition Cluster (School Breakfast Program, National School Lunch Program, and Summer Food Service Program for Children) Assistance Listing Number: 10.553, 10.555, and 10.559 Federal Award Identification Number and Year: N/A Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Number(s): 2025-105726-DPI-SB-SEVERE-546, 2025-105726-DPI-SK_NSLAE-566, 2025-105726-DPI-NSL-547, 2025-105726-DPI-SFSP-586 Award Period: July 1, 2024 – June 30, 2025 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matter Criteria or Specific Requirement: Federal regulations require that school districts maintain accurate and complete eligibility documentation for all students receiving free or reduced-price meals. Benefits must be discontinued promptly when students are no longer eligible, and direct certification listings must be updated annually to ensure only eligible students receive benefits. Condition: There is no formal, documented process in place to ensure accurate eligibility determinations and maintenance of benefit issuance listings for the Child Nutrition Cluster. During testing, it was noted that during the transition period when the food service director left early in fiscal year 2024–2025, there was a substantial loss of records, including student applications. Additionally, the prior Food Service Director did not clear out old certifications of eligibility in the software used for food service record keeping, which caused students who had previously applied for free or reduced-price meals to continue receiving benefits regardless of whether a new application was filed or whether they appeared on the current direct certification list. Students with approval dates dating back to 2012 were noted on the benefit issuance list. There was no formal documented review and approval of eligibility determinations by someone other than the preparer. Accordingly, this does not allow for a proper segregation of duties for internal control purposes. Questioned Costs: Unable to be determined. Context: When performing audit procedures related to eligibility for the Child Nutrition Cluster, it was noted that the District did not maintain adequate documentation or controls to ensure proper eligibility determinations. Four applications in our sample of seventy students were unable to be located. Six students in our sample of seventy students were actually no longer with the District. No meals were claimed for those six students. Ten students in our sample of seventy students were no longer eligible for benefits via direct certification yet still received benefits for part or all of the school year. Twenty-two students in our sample of seventy students were no longer eligible for benefits via direct certification but had no meals claimed in 2024-25. Cause: The errors occurred due to inadequate internal controls over eligibility determinations and record retention. Contributing factors include staff turnover, data loss when position turned over, and lack of formal procedures to ensure timely updates to eligibility listings. Effect: Improper benefits were provided to students who were not eligible, and reimbursement claims were submitted for meals that should not have been claimed. This could result in questioned costs and noncompliance with federal program requirements. Repeat Finding: No Recommendation: We recommend that the District implement formal procedures to strengthen controls over eligibility determinations. These procedures should include ensuring timely updates to eligibility listings when students become ineligible, retaining all required documentation for the applicable retention period, and conducting periodic reviews of benefit issuance listings to confirm accuracy. Additionally, auditors recommend the District implement procedures to ensure staff receive training on proper eligibility determination and recordkeeping requirements. Finally, we recommend the District establish monitoring controls to verify that benefits are discontinued promptly for students who no longer qualify. Eligibility determinations should be reviewed and approved by someone other than the person entering the applications and direct certification information into the software. Views of Responsible Officials: There is no disagreement with the audit finding.