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 Criteria or Specific Requirement: 2 CFR 200.303 requires grantees to establish, document, and maintain effective internal control over federal awards that provides reasonable assurance that the grantee is managing the federal in compliance with federal statutes, regulations, and the terms and conditions of federal award. This includes internal controls over the procurement transactions and verifying suspension and debarment status of vendors when required. Segregation of duties is an internal control intended to prevent or decrease the occurrence of errors or intentional fraud. Segregation of duties ensures that no single employee has control over all phases of a transaction. Condition: There is not a formal, documented review in place for procurement transactions related to micro purchases or food service contracts. Accordingly, this does not allow for a proper segregation of duties for internal control purposes. Questioned Costs: None. Context: When performing audit procedures related to procurement, and suspension and debarment, it was noted that the food service director position handled all the responsibilities of those functions related to Child Nutrition Cluster and there were no formal, documented internal controls over compliance in place to review that procurement transactions met Uniform Guidance requirements and were properly documented. Cause: The lack of segregation of duties is due to the limited number of employees and the size of the District’s operations. Effect: Errors or intentional fraud could occur and not be detected timely by other employees in the normal course of their responsibilities as a result of the lack of segregation of duties. The District could chose the incorrect procurement method for a transaction and fail to maintain all required documentation resulting in noncompliance. The District could award contracts to vendors who are suspended or debarred by the federal government resulting in noncompliance. Repeat Finding: No. Recommendation: We recommend the District review its procurement process to ensure that there is adequate segregation of duties in regards to initiating, authorizing, reviewing for grant allowability and approving all procurement transactions. We also recommend that the District review and update policies and procedures to help ensure that all federal grants with covered transactions have vendors reviewed for suspension and debarment status prior to entering into the transaction and that documentation of the status is maintained with the procurement history of each transaction that it is required for. Views of Responsible Officials: There is no disagreement with the audit finding.