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FINDING 2025-005 Subject: Child Nutrition Cluster - Special Tests and Provisions - School Food Accounts Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, Fresh Fruit and Vegetable Program Assistance Listings Numbers: 10.553, 10.555, 10.559, 10.582 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2023-2024, FY 2024-2025 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - School Food Accounts Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 25 PLYMOUTH COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation had not designed or implemented a system of internal controls, which would have included appropriate segregation of duties, that would have likely been effective in preventing, or detecting and correcting, noncompliance. One of the three monthly reimbursement claims tested was receipted into the School Lunch fund twice. The issue was identified and corrected by the current Treasurer prior to June 30, 2025. The lack of internal controls and noncompliance over special tests and provisions - school food accounts is an isolated instance. 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). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." Cause The School Corporation had not developed a system of internal controls that would have ensured that monthly reimbursements were properly credited to the School Food Account. Effect The lack of internal controls prevented the School Corporation's compliance with the Special Tests and Provisions - School Food Accounts compliance requirement and inaccurate crediting of the School Lunch fund as detailed in the Condition and Context. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 26 PLYMOUTH COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure all reimbursements are properly credited to the School Lunch fund. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.