Finding Text
FS 2025-01 Strengthen Controls over Special Reporting Compliance Requirement: Reporting Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: Georgia Department of Education Assistance Listing Number and Title: 10.553 – School Breakfast Program 10.555 – National School Lunch Program Federal Award Number: 255GA324N1199 (Year: 2025) Questioned Costs: $89 Repeat of Prior Year Finding: FA 2024-001, FA 2023-001, FA 2022-001 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over the monthly Claims for Reimbursement process. Background Information: The Child Nutrition Cluster (CNC) is comprised of various programs that are intended to assist states in administering and overseeing food service program operators that provide healthful, nutritious meals to eligible children in public and non-profit private schools, residential child care instructions, and summer programs. This Cluster of programs also fosters healthy eating habits in children by providing fresh fruits and fresh vegetables to children attending elementary and secondary schools and encourages the domestic consumption of nutritious agricultural commodities. CNC funding is granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Agriculture. GaDOE is responsible for distributing funds to local educational agencies (LEAs) based upon each School District’s monthly Form DE0106 Claim Data report submissions. These DE0106 reports are to be supported by the corresponding Form DE0112 Daily Record of Number of Breakfasts Served and Form DE0118 Daily Record of Number of Lunches Served, which are prepared by the School District from their School Food Service meal sales system. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in Title 7 CFR Section 210.7(c) require that the School District “base Claims for Reimbursement on lunch counts, taken daily at the point of service, which correctly identify the number of free, reduced price and paid lunches served to eligible children” and “correctly record, consolidate and report those lunch and supplement counts on the Claim for Reimbursement.” In addition, provisions included in Title 7 CFR Section 220.11(d) state that the School District “shall establish internal controls which ensure the accuracy of breakfast counts prior to the submission of the monthly Claim for Reimbursement.” Condition: A sample of three Form DE0106 reports was randomly selected for testing using a nonstatistical sampling approach. Additionally, the months of July 2024 and June 2025 were selected for testing. These reports were reviewed to determine if appropriate internal controls were implemented and applicable reporting compliance requirements were met. Meal count errors were noted for three out of the five months tested. The number of meals served per the Form DE0112 and DE0118 reports for these three months did not match the number of meals reported and claimed on the Form DE0106 reports resulting in the over-claiming of 31 lunch or breakfast meals during the period under review. 84 Questioned Costs: Upon testing a sample of $613,855 in Form DE0106 reports submitted for reimbursement, known questioned costs of $89 were identified for excess reimbursements. Using the population being sampled, which totaled $1,887,172, we project the likely questioned costs to be approximately $273. The following Assistance Listing Numbers were affected by known and likely questioned costs: 10.553 and 10.555. Cause: In discussing these deficiencies with management, errors were made when entering meal counts on to the Form DE-0106 from the daily meal count sheets. Effect: The School District is not in compliance with the Uniform Guidance and GaDOE guidance. Failure to submit accurate monthly Claims for Reimbursement to GaDOE can result in the School District obtaining more federal funding than they are eligible to receive. This deficiency may expose the School District to unnecessary financial strains and overages within the CNC fund. Recommendation: The School District should evaluate their internal control processes regarding the creation of the Form DE0106 reports and develop or modify procedures to ensure Claims for Reimbursement are based on final and accurate meal counts. The School District should become more familiar with the federal regulations related to the CNC programs in order to develop or modify procedures that will ensure accurate reporting of meals served. Furthermore, management should develop and implement a monitoring process to ensure that controls are operating appropriately. Views of Responsible Officials: We concur with this finding.