Finding Text
FINDING 2023-009
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Programs: School Breakfast Program, National School Lunch Program
Assistance Listings Numbers: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): FY23
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Eligibility
Audit Finding: Material Weakness
Repeat Finding
This is a repeat finding from the prior audit report. The prior audit finding number was 2021-003.
INDIANA STATE BOARD OF ACCOUNTS 29
RUSH COUNTY SCHOOLS
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Condition and Context
Any child enrolled in a participating school or summer camp, or attending a SFSP meal service
site, who meets the applicable program's definition of "child," may receive meals under the applicable
program. In the case of the National School Lunch Program and School Breakfast Program, children
belonging to households meeting nationwide income eligibility requirements may receive meals at no
charge or at reduced price. Children who have been determined ineligible for free or reduced-price school
meals pay the full price, set by the School Food Authority, for their meals. Children attending SFSP meal
service sites receive their meals at no charge. As a general rule, a child's eligibility for free or reducedprice
meals under a Child Nutrition Cluster program may be established by the submission of an annual
application or statement which furnishes such information as family income and family size. Local educational
agencies, institutions, and sponsors then determine eligibility by comparing the data reported by the
child's household to published income eligibility guidelines. Additionally, a child may be direct certified. For
a direct certification, annual eligibility determinations are based on the child's household receiving benefits
under SNAP, FDPIR, the Head Start Program (ALN 93.600), or, under most circumstances, the TANF
program (ALN 93.558). A household may furnish documentation of its participation in one of these
programs, or the school, institution, or sponsor may obtain the information directly from the State or local
agency that administers these programs. Certain foster, runaway, homeless, and migrant children are
categorically eligible for free school lunches and breakfasts. Direct certified households do not need to
complete an application.
For fiscal year 2021-2022, the Cafeteria Secretary was responsible for making the eligibility
determinations without an oversight or review process to ensure income verification, calculations, and
information entered in the software system was accurate and the eligibility status was correct. For
2022-2023, the School Corporation changed its process, and the Food Service Director started reviewing
the eligibility determinations made by the Cafeteria Secretary. However, there was not always documented
evidence of the review.
The lack of internal controls was a systemic issue throughout the audit period.
Criteria
2 CFR 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over the Federal award that provides
reasonable assurance that the non-Federal entity is managing the Federal award 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). . . ."
Cause
A proper system of internal controls was not designed by management of the School Corporation,
which would include segregation of key functions. Embedded within a properly designed and implemented
internal control system should be internal controls consisting of policies and procedures. Policies reflect
the School Corporation's management of what should be done to effect internal controls, and procedures
should consist of actions that would implement these policies.
INDIANA STATE BOARD OF ACCOUNTS 30
RUSH COUNTY SCHOOLS
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Effect
Without the proper design or implementation of the components of a system of internal controls,
including policies and procedures that provide segregation of duties and additional oversight as needed,
the internal control system cannot be capable of effectively preventing, or detecting and correcting, material
noncompliance.
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended that management of the School Corporation design and implement a proper
system of internal controls, including policies and procedures that would provide segregation of duties to
ensure appropriate reviews, approvals, and oversight are taking place.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.