Finding Text
2023-003 Child Nutrition Cluster - Segregation of Duties
Federal Agency: U.S. Department of Agriculture
Federal Program Title: Child Nutrition Cluster
Assistance Listing Number: 10.553, 10.555
Pass-Through Agency: Wisconsin Department of Public Instruction
Pass-Through Entity Identifying Number: 2023-375628-DPI-SB-546, 2023-375628-DPI-NSL-547
Award period: July 1, 2022 – June 30, 2023
Type of Finding:
• Material Weakness in Internal Control Over Compliance
• Other Matters
Compliance Requirements: Eligibility, Procurement, Reporting
Criteria or Specific Requirement: Uniform Guidance requires entities that expend federal funds are required to implement a system of internal controls to ensure that the entity remains in compliance with the requirements of the grant. Segregation of duties is an internal control intended to prevent or decrease the occurrence of errors or intentional fraud. Segregation of duties ensures that no single employee has control over all phases of a transaction.
Condition: For activities related to Eligibility, Procurement, and Reporting, the District had not established procedures related to the documenting of the review and approval of the compliance requirements. Accordingly, this does not allow for a proper segregation of duties for internal control purposes over reporting compliance requirements.
Questioned Costs: None.
Context: During our testing we noted no review of the calculation of eligibility for the five applications submitted for testing, no review of the six monthly reports selected for testing, no approval on eight of the eleven micro-purchase transactions, and no documentation to support the price comparison for two of the three small purchase transactions selected for testing.
Cause: The District has not established policies to identify an individual to review the District’s compliance with the federal awards and how their review and approval is documented
Effect: Without an adequately designed system of internal controls over compliance, the District has an increased risk of non-compliance with the grant requirements. These risks include providing or denying benefits incorrectly, misreporting activities, or violating federal procurement requirements.
Repeat Finding: Repeat of Finding 2022-004 and 2022-005
Recommendation: We recommend that the District review the compliance requirements of the grant program and evaluate the currently assigned responsibilities by position to ensure that an adequate system of internal controls, including proper segregation of duties, exists.
Views of Responsible Officials: There is no disagreement with the audit finding.