Finding Text
Information on the federal program: Subject: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY2024, FY2025 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness, Qualified Opinion Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the reporting compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the reporting requirements. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: $156,357 (known questioned costs) Context: During the testing of meal claim reimbursements, we noted 3 monthly reimbursements in a sample of 6 claims selected where the School Corporation was unable to produce auditable support of meals served and claimed via underlying meal system reports. The claim reimbursements for these 3 months unsupported by meal claim data totaled $157,708. Additionally, we noted other variances when comparing the remaining 3 monthly reimbursements in our to sample to underlying meal system reports. Those variances aggregated to a net amount under claimed of $1,341. Additionally, we noted that management has no formal, documented review control in place for monthly meal claims prior to submission to the Indiana Department of Education (IDOE). Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the School Corporation's management review internal controls surrounding the claim reimbursement process. The School Corporation should implement a secondary, documented review of the request for reimbursement prior to the submission to IDOE and should include a review of the underlying meal count reports to ensure the claim reimbursement request is accurate and complete. All meal count data and reports should be maintained to support meal claim reimbursements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.