Finding Text
Federal Agency: U.S. Department of Agriculture Pass-Through Entity: California Department of Education Program Name: Child Nutrition Cluster Federal Financial Assistance Listing: 10.553, 10.555, 10.559 Award Identification Number: 15323,15324,13526, 13004 Award Year: 2021-2022, 2022-2023 Compliance Requirement: L. Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria Per Title 7, U.S. Code of Federal Regulations, Subtitle B, Chapter II, Subchapter A, Parts 210.8 and 220.11, School Food Authorities (SFA) must establish internal controls which ensure the accuracy of meal counts prior to the submission of the monthly Claim for Reimbursement. Prior to submission of a monthly Claim for Reimbursement, each school food authority shall review the breakfast and lunch count data for each school under its jurisdiction to ensure the accuracy of the monthly Claim for Reimbursement. The objective of this review is to ensure that monthly claims include only the number of free, reduced-price, and paid breakfasts and lunches served on any day of operation to children currently eligible for such meals. SFA staff shall maintain on file each month's Claim for Reimbursement and all data used in the claims review process, by school. Condition The District did not have sufficient controls in place to ensure that monthly Claims for Reimbursement accurately reflected the numbers of meals served. We noted per review of the results of a forensic investigation, discrepancies between the daily meal counts and the monthly Claims for Reimbursement for various months from December 2021 through June 2023. The discrepancies in meal counts resulted in an approximate excess claim of $3,043,824. Cause The condition identified above resulted from lack of sufficient internal controls over compliance to prevent fraudulent activity related to meal claims. Effect The District has not complied with the requirements identified in Title 7, U.S. Code of Federal Regulations, Subtitle B, Chapter II, Subchapter A, Parts 210.8 and 220.11. Questioned Costs The condition identified resulted in questioned costs of $3,043,824. Context/Sampling: The condition was identified by the District through the results of a forensic investigation reviewing monthly meal claims and supporting documentation for the fiscal years of 2021-2022, 2022-2023, and 2023-2024. Repeat Finding No. Recommendation The District should review the requirements stated in Title 7, U.S. Code of Federal Regulations, Subtitle B, Chapter II, Subchapter A, Parts 210.8 and 220.11 and implement procedures to address the control deficiencies currently identified. The District should retain all supporting documentation used to complete the monthly Claims for Reimbursements and ensure the number of meals reported on the Claims for Reimbursements agree to the supporting system reports.