Finding Text
U.S. DEPARTMENT OF AGRICULTURE PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION CHILD NUTRITION CLUSTER - AL NUMBERS 10.553 AND 10.555 PASS-THROUGH NUMBER 5901 AUDIT PERIOD - YEAR ENDED JUNE 30, 2025 2025-001. Eligibility and Reporting Criteria or specific requirement: The District is required to process applications submitted for free and reduced price meals for the District's child nutrition program and properly classify them based on income eligibility criteria within the timeline specified in accordance with federal guidelines established by the U.S. Department of Agriculture. Applications must include the required information to be considered for free and reduced price meals and the District must notify the household of the child's eligibility within ten operating days of receiving the application. The District must select a sample of applications for verification of income. Each food service line must provide accurate point of service meal counts for reporting purposes. Condition: An Administrative Review for the District was completed by the Arkansas Division of Elementary and Secondary Education, Child Nutrition Unit (DESE, CNU) in April 2025. The review examined 289 applications and noted 3 applications did not contain an adult signature, 5 applications were not approved within 10 operating days of receiving the application from the household, and 4 applications were incorrectly determined as free or reduced. While examining a sample of five applications that were selected for verification, the DESE,CNU review noted one application did not contain an adult signature and was improperly classified as free, and one application contained incomplete income documentation resulting in improper classification. The review also noted that during observation of breakfast and lunch, preschool meal counts were not recorded at the point of service. Additionally, during our testing of 17 free and reduced price meal applications, Arkansas Legislative Audit noted one application was improperly classified as reduced instead of free. Cause: The District lacked internal controls to ensure all applications were properly completed and classified in the prescribed timeline as required by federal guidelines. District personnel also did not adhere to federal guidelines requiring that meal counts must be recorded at the point of service. Effect or potential effect: Applications were not complete, properly classified, correctly verified, or processed within prescribed timelines. Meal counts were not properly performed. Questioned costs: The DESE, CNU administrative review resulted in a net overclaim of $659. Context: Results of the Administrative Review performed by the pass-through entity, DESE, CNU. Arkansas Legislative Audit testing included a sample of 17 applications from a population of 162 applications. This was not a statistically valid sample. Identification as a repeat finding: No Recommendation: The District should establish controls to ensure applications are complete, correctly classified, properly verified, and processed within the prescribed timelines. The District should also establish controls to ensure that accurate point of service meal counts are performed for each food service line. Views of responsible officials: To address the audit findings related to meal applications within the Child Nutrition Department, the Child Nutrition Director has taken immediate and corrective action to strengthen our processes and ensure full compliance with program requirements. The director attended formal verification training and successfully completed the accompanying quiz to confirm her understanding of proper procedures. Additionally, the director developed a meal application checklist to ensure that all required information is accurately reviewed and documented before approval. To improve timeliness and accountability, the director has implemented the use of a date-received stamp on all applications so they can be processed within required timelines. These steps will help ensure greater accuracy, consistency, and compliance moving forward. The administration office has also stepped in to double check all applications as the Child Nutrition Director completes them. Each application will be reviewed again in the central office to help prevent incomplete or inaccurate paperwork.