Finding Text
FINDING 2025-003 Subject: Child Nutrition Cluster - Eligibility Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 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: Eligibility Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented an effective system of internal controls over review of individual free and reduced status applications and information management in the Skyward Software System used to determine and maintain eligibility status. Individual Applications The School Corporation noted individual applications for both direct certification and income eligible students would be printed and reviewed after the system makes a determination of eligibility status. Out of 40 students tested, no documentation of this review was provided for 34 of the students. INDIANA STATE BOARD OF ACCOUNTS 20 WAWASEE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Skyward Software System The School Corporation is required to design internal controls ensuring computer systems used to maintain student benefit status are secured. Currently, the Skyward Software System allows all school lunch employees to make changes to student benefit status, and there is no indication or record within the system who makes these changes. Additionally, income eligibility guidelines in the system that determine whether students are eligible based on income are updated by the system automatically every year. The School Corporation is required to perform an annual review to ensure these guidelines are accurate. However, no annual review is done by the School Corporation staff. The issues were systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (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). . . ." 7 CFR 245.3(c) states in part: "Each School Food Authority shall serve free and reduced price meals or free milk in the respective programs to children eligible under its eligibility criteria. . . ." 7 CFR 245.6(f)(1) states in part: ". . . Only persons directly connected with the administration or enforcement of a program or activity listed in paragraphs (f)(2) or (f)(3) of this section may have access to children's eligibility information, without parental consent. Persons considered directly connected with administration or enforcement of a program or activity listed in paragraphs (f)(2) or (f)(3) of this section are Federal, State, or local program operators responsible for the ongoing operation of the program or activity or responsible for program compliance. Program operators may include persons responsible for carrying out program requirements and monitoring, reviewing, auditing, or investigating the program. Program operators may include contractors, to the extent those persons have a need to know the information for program administration or enforcement. Contractors may include evaluators, auditors, and others with whom Federal or State agencies and program operators contract with to assist in the administration or enforcement of their program in their behalf." Cause A proper system of internal controls over the Skyward Software System was not properly designed and implemented as the School Corporation was not aware its process did not cover the requirements to restrict access to the Skyward Software System and review the income eligibility guidelines yearly. Additionally, the School Corporation was unable to provide documentation to demonstrate it reviewed individual applications to ensure eligibility status was determined accurately. The School Corporation noted that staff turnover resulted in lost documentation; therefore, the School Corporation was unable to provide any other records supporting that staff verified the eligibility status was determined accurately. INDIANA STATE BOARD OF ACCOUNTS 21 WAWASEE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without a proper system of internal controls, the School Corporation cannot ensure eligibility determinations made by either the Skyward Software System or employees are accurate. The School Corporation cannot ensure modifications made in the Skyward Software System to student eligibility status are traceable, which could result in improper changes to student eligibility status. Additionally, a properly designed annual review process over the income eligibility guidelines within the Skyward Software System is necessary to ensure accurate determinations. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation strengthen its internal controls over eligibility applications to ensure eligibility determinations made by either the Skyward Software System or employees are accurate. We further recommended the School Corporation update the Skyward Software System to identify who makes any modifications within the system to ensure modifications are fully traceable. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.