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FINDING 2022-003Subject: Child Nutrition Cluster - ReportingFederal Agency: Department of AgricultureFederal Programs: School Breakfast Program, National School Lunch Program, Summer Food ServiceProgram for Children, COVID-19 - Summer Food Service Program for ChildrenAssistance Listings Numbers: 10.553, 10.555, 10.559Federal Award Numbers and Years (or Other Identifying Numbers): FY 2021, FY 2022Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Findings: Material Weakness, Other MattersCondition and ContextAn internal control system was designed and implemented, but not effective, at the SchoolCorporation to ensure compliance with requirements related to the grant agreement and the Reportingcompliance requirement.Monthly Sponsor Claims for Reimbursement (Claims) were submitted to the Indiana Departmentof Education based upon meals served for the month. The monthly Claims were prepared by the FoodService Director and reviewed by the Business Manager; however, the internal control was not effective toprevent, or detect and correct, errors. For three of the seven monthly Claims tested, there were differencesbetween the Claims submitted and the School Corporation's summary meal count reports. The threeClaims had less meals served than the School Corporation's summary meal count reports, which resultedin underclaimed meals.The lack of adequate internal controls and noncompliance were systemic issues throughout theaudit period.INDIANA STATE BOARD OF ACCOUNTS19SOUTHWEST DUBOIS COUNTY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."7 CFR 210.8(a) states in part:"Internal controls. The school food authority shall establish internal controls which ensure theaccuracy of meal counts prior to the submission of the monthly Claim for Reimbursement. . . .(2) School food authority claims review process. Prior to the submission of a monthlyClaim for Reimbursement, each school food authority shall review the lunch count datafor each school under its jurisdiction to ensure the accuracy of the monthly Claim forReimbursement. . . ."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the Reporting compliance requirement.EffectThe failure to establish an effective internal control system enabled material noncompliance to goundetected. Noncompliance with the grant agreement and the Reporting compliance requirement couldresult in the loss of future federal funds to the School Corporation.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish a system of internal controlsto ensure compliance and comply with the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.