Finding 366889 (2023-001)

SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE AND REPORTABLE INCIDENCE OF NONCOMPLIANCE – U.S. DEPARTMENT OF AGRICULTURE, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, CHILD NUTRITION CLUSTER – FEDERAL ALN 10.553 AND 10.555 2023-001 Internal Control Over Compliance and Noncompliance With Federal Eligibility Requirements Criteria – 7 CFR § 245 requires Independent School District No. 885 (the District) to establish and maintain effective internal control over compliance with eligibility requirements applicable to child nutrition cluster federal programs. Condition – During our audit, we noted that the District did not have sufficient controls in place within its child nutrition cluster federal program to ensure compliance with federal eligibility to accurately update the meal-type eligibility classification for direct-certification students whose eligibility category changed during the year. Questioned Costs – None noted. Context – This is a current year finding. Forty of forty applications tested for eligibility for free or reduced-price meals based on federal guidelines were initially approved for the correct eligibility classification. However, we noted two direct-certification students included in the sample whose direct-certification status changed from reduced to free mid-year, for which the corresponding change was not made in the District’s food services system in a timely and accurate manner. This was not a statistically valid sample. Repeat Finding – This is a current year finding. Cause – This was an oversight by district personnel. Two student meal accounts were not updated to the appropriate level of benefit for mid-year eligibility status changes. Effect – Meals served to these students were being claimed for lesser benefits than they were eligible for under program guidelines. Recommendation – We recommend that the District review its internal control procedures relating to child nutrition cluster applications to ensure the eligibility status for all students is appropriately updated in the District’s system as eligibility classification changes occur in accordance with federal program eligibility guidelines. View of Responsible Official and Planned Corrective Actions – The District agrees with the finding. The District intends to review its procedures for proper approval and updating of child nutrition program meal eligibility classifications. The District has separately issued a Corrective Action Plan related to this finding.