Finding Text
1. FINDING NUMBER: 2024 - 002 2. THIS FINDING IS: New
3. Federal Program Name and Year: Child Nutrition Cluster - 2024
4. Project No.: 24-4210-00, 24-4220-00 5. AL No.: 10.553, 10.555
6. Passed Through: Illinois State Board of Education
7. Federal Agency: U.S. Department of Agriculture
8. Criteria or specific requirement (including statutory, regulatory, or other citation): According to 2 CFR §200.303, non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
9. Condition: During our audit of the Child Nutrition Cluster, we identified that the District did not have adequate disbursement controls in place. Specifically, duplicate invoices on multiple occasions were entered into the District's software system due to typographical errors, resulting in payments being made twice to each vendor for the same service.
10. Questioned Costs: The duplicated invoices do not impact the reimbursement received by the District due to the Child Nutrition Cluster being an open-ended entitlement grant, meaning they provide reimbursements based on the number of eligible meals served rather than all food service expenditures incurred. As a result, no questioned costs were identified.
11. Context: During our audit of the Child Nutrition Cluster's allowable activities, two separate instances of duplicated invoices were identified from a stratified sample size of forty. The sample was deemed not statistically valid.
12. Effect: The District incurred unnecessary expenses by paying vendors twice for the same service, which could result in financial losses and potential non-compliance with Federal regulations. The finding does not impact the reimbursement the District receives.
13. Cause: The lack of proper review and approval processes for invoice entry and payment, combined with typographical errors, led to the duplication of invoices and subsequent duplicate payments.
14. Recommendation: We recommend that the District implement stronger internal controls over the disbursement process. This includes establishing a review and approval process for all invoices before payment, implementing software controls to detect duplicate invoices, and providing training to staff on proper invoice processing procedures to minimize typographical errors.
15. Management's response: Management agrees with the finding and has initiated steps to enhance disbursement controls. These steps include revising the invoice approval process, upgrading the software system to flag duplicate invoices, and conducting training sessions for staff on the new procedures to reduce typographical errors.