Finding Text
Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls 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 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Significant Deficiency 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 eligibility compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with eligibility requirements. Effect: The failure to establish an effective internal control system could place the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements and provide free or reduced benefits to ineligible students. Questioned Costs: There were no questioned costs identified. Context: During the testing of internal controls over eligibility determinations for free and reduced meals, we selected a sample of 38 direct certifications and 22 applications for testing. For one of the 38 direct certifications, the student was listed as eligible for reduced in the School Corporation’s food service software, however, the student did not appear on the Direct Certification listing for the year under audit. Per discussion with management, the student did appear on the Direct Certification listing and had a valid case number in the prior school year, and that designation was automatically carried forward in the food service system in error. This finding is isolated to fiscal year 2024. There were no errors in the testing sample for fiscal year 2025. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the School Corporation's management establish an internal control process to review the list of eligibility determinations for free and reduced meals. Specifically, we recommend that the School Corporation periodically download the Direct Certification listing and check that against the eligibility determinations in the food service software. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.