Finding Text
FINDING 2023-005
Subject: Child Nutrition Cluster (CNC) – Internal Controls
Federal Agency: Department of Agriculture
Federal Program: School Breakfast Program, National School Lunch Program
Assistance Listing Number: 10.553, 10.555
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Reporting
Audit Findings: Material Weakness
Criteria: 2 CFR section 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance
that the non-Federal entity is managing the Federal awards in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award. These internal controls should be in
compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the
Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."
Condition: An effective internal control system was not in place at the School Corporation in order to
ensure compliance with requirements related to the grant agreement and the Reporting compliance
requirements.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with the compliance requirements listed above.
Effect: The failure to establish an effective internal control system placed the School Corporation at risk of
noncompliance with the grant agreement and the compliance requirements by not having proper oversight,
reviews, and approvals over the activities of the programs.
Questioned Costs: There was $27 of questioned costs identified.
Context: During testing of reporting, we identified a control breakdown in the claim submission process.
Although student meal data is summarized at the school level and reviewed by both the Food Services
Bookkeeper and the Food Services Director, there is not a review of the actual claim submission prior to
being submitted to the portal. Due to the breakdown in controls, we identified that the October 2022 revision
claim overstated breakfasts served by 10 meals.
Identification as a repeat finding, if applicable: No.
Recommendation: We recommended that the School Corporation's management establish a system of
internal controls related to the grant agreement and Reporting compliance requirements.
Views of Responsible Officials and Planned Corrective Actions: For the views of the responsible
officials, refer to the Corrective Action Plan that is part of this report.