Finding 517742 (2024-002)

Significant Deficiency
Requirement
L
Questioned Costs
-
Year
2024
Accepted
2025-01-06
Audit: 335870
Organization: Hannibal School District No. 60 (MO)
Auditor: Wade Stables PC

AI Summary

  • Core Issue: The District lacks proper oversight for monthly Claims for Reimbursement, leading to errors in meal counts and potential miscalculations of eligibility for free and reduced meals.
  • Impacted Requirements: Compliance with 7 CFR regulations regarding accurate reporting and eligibility determination for meal programs is not being met.
  • Recommended Follow-Up: Implement written procedures for a monthly review of Claims for Reimbursement and Free and Reduced Applications to ensure accuracy before submission.

Finding Text

Federal Agency: U.S. Department of Agriculture Passthrough Entity: Missouri Department of Elementary and Secondary Education Assistance Listing Number and Federal Program: Child Nutrition Cluster – 10.553 School Breakfast Program, 10.555 National School Lunch Program, 10.559 Summer Food Service Program for Children. Compliance Requirement: L. Reporting Criteria: Per 7 CFR 210.8(a) and 7 CFR 220.11(c), the District is required to have proper internal controls over the reporting of monthly meal counts to ensure that information submitted for free and reduced meals is accurate and complete. The monthly meal counts are reported to DESE for reimbursement based on the number of free and reduced meals served during the month. The amount of reimbursement will depend on the number of each type of meal and whether it was for breakfast or lunch. In accordance with 7 CFR 210.7(c)(1)(i), the District is required to correctly determine eligibility for free and reduced price lunches and afterschool snacks based on the requirements under 7 CFR 245. Under 7 CFR 245.6(c)(4), if the student is not automatically eligible under direct certification or another exception, the District must use income information provided by the household of the student to calculate the student's eligibility for free or reduced prices. The District makes applications available to households so that their income can be reported to the District for such purposes. The District then calculates the income on the applications and references the Income Eligibility Guidelines for the school year to determine if households are eligible or ineligible for free or reduced meals. Condition: During our testing, we noted a lack of oversight regarding the monthly Claims for Reimbursement. There was no review noted before they were submitted to DESE nor was there a subsequent review performed after submission. It was noted that the Claims for Reimbursements for February and April were not completed correctly. The Lunch and Breakfast meal counts were switched on both monthly claims. We also noted that the applications for free and reduced lunch were not being reviewed by the Food Service Director for accuracy. We noted one application during testing that had illegible numbers and, therefore, the total income was not clear. The household was determined to be free by the District but there was no clarification to confirm the illegible numbers were correct as assumed. Per discussion with the Food Service Director, they agreed that the income number could have been improperly calculated and that the household could have been incorrectly determined as eligible for free meals. Cause: Control procedures were not in place to ensure that monthly Claims for Reimbursements and Free and Reduced applications were accurately entered/calculated before being submitted. Effect: Without timely review of reports before submission, requested grant revenue can be understated or overstated when based on erroneous submitted grant reports, In addition, other grant noncompliance can be overlooked. This could result in missed funding, excess funding, or other adverse conditions with the grantors. Questioned Costs: No questioned costs noted. Perspective Information: This appears to be a systemic issue as two out of the four months tested contained errors where the Lunch and Breakfast meal counts were switched on the Claims for Reimbursement form. Identification of Repeat Findings: Not a repeat finding. Recommendation: We recommend that the District develop written procedures that require a monthly review by another party for Claims for Reimbursement for the food service programs. This should be done prior to submitting the reimbursement claim to DESE. The review should be done to ensure that all information has been entered, is accurate, and is classified in the appropriate line to ensure reimbursements are for the correct amounts. In addition, we recommend that the District develop written procedures that require Free and Reduced Applications, including the calculations of income, be reviewed before being entered into the District’s tracking program. The review should be done to ensure that calculations of household income and determination of eligibility are correct when referenced to the Income Eligibility Guide.

Corrective Action Plan

Re: Corrective Action Plan for Findings Related to Monthly Claims for Reimbursement and Free/Reduced Meal Applications In response to the findings regarding the District's internal controls over monthly meal count reporting, Claims for Reimbursement, and the review of Free and Reduced Meal applications, Hannibal School District 60 has developed the following Corrective Action Plan (CAP) to address the identified issues and ensure compliance with federal regulations under 7 CFR 210.B(a), 7 CFR 220.11(c), and 7 CFR 245.6(c)(4). Corrective Action Plan Details: 1. Finding 1: Lack of Oversight on Monthly Claims for Reimbursement Condition: The District did not conduct a review of monthly Claims for Reimbursement before submission to the Department of Elementary and Secondary Education (DESE), nor was a subsequent review performed after submission. Additionally, the Claims for Reimbursement for February and April were submitted with the lunch and breakfast meal counts incorrectly switched. Planned Actions: o Review Process for Claims: The District will establish a clear and documented procedure for reviewing the monthly Claims for Reimbursement before submission to DESE. This process will include a verification checklist to confirm the accuracy of meal counts for both breakfast and lunch. o Secondary Review by Senior Staff: A second, independent review will be conducted by the Food Service Supervisor or another designated senior staff member before submission. The purpose of this review will be to ensure that meal counts are correctly reported and to identify any discrepancies before the claims are submitted. o Training: All staff involved in the preparation and submission of monthly meal claims will undergo additional training on the accurate completion of meal count reports and claims for reimbursement. 2. Person(s) Responsible: o Food Service Director: Oversee the implementation of the new review procedures for monthly Claims for Reimbursement. o Food Service Supervisor: Conduct a secondary review of the monthly meal count reports before submission. 3. Anticipated Completion Date: The review procedures and training will be fully implemented by January 1st, 2025 4. Finding 2: Inadequate Review of Free and Reduced Meal Applications Condition: During testing, it was noted that one app.lication had illegible numbers, resulting in unclear income figures. The household was assumed to be eligible for free meals, but the accuracy of the income figures was not verified, which could have led to improper eligibility determination. Planned Actions: o Review and Verification Process: The District will implement a formal review process to ensure that all Free and Reduced Meal 58 applications are thoroughly checked for legibility and accuracy. This review will include verifying income calculations and ensuring that illegible numbers or unclear data are clarified before eligibility determinations are made. o Enhanced Application Procedures: A standardized checklist will be developed for reviewing applications, with specific attention to legibility, accuracy, and completeness. The checklist will be used by staff during the application review process. o Follow-up with Households: If any data on an application is unclear or illegible, the District will contact the household to clarify the information before proceeding with the eligibility determination. o Training: The Food Service Director and application review staff will receive training on the proper review and verification of Free and Reduced Meal applications, including the importance of ensuring that all information is clear and accurate. 5. Person(s) Responsible: o Food Service Director: Oversee the review and verification process for Free and Reduced Meal applications. o Food Service Staff: Review applications for legibility and accuracy, and follow up with households if necessary. 6. Anticipated Completion Date: The new review process and training will be fully implemented by January 1st, 2025 7. Cause of Findings: The primary cause of these findings was the misinterpretation of handwritten reported income by the applicant and a mix-up of breakfast and lunch counts during the reporting of Free and Reduced meal counts for one school over the course of a few months. 8. Effect of Findings: Without a robust review process in place, there is a risk of submitting inaccurate meal count data and miscalculating eligibility for free and reduced meals. This could result in the District receiving either too much or too little funding from DESE, affecting the financial stability of the program. Additionally, failure to ensure accurate eligibility determinations could result in noncompliance with federal regulations, potentially leading to penalties or loss of funding. Implementation and Monitoring: • Ongoing Monitoring: The Food Service Director will regularly monitor the new procedures to ensure they are being followed correctly and will conduct random spot checks of meal counts and application reviews to ensure compliance. • Reporting: The Food Service Director will report on the status of the corrective actions to the Superintendent on a monthly basis until the corrective actions are fully integrated into the District's operational processes. We are committed to ensuring the accuracy and integrity of our meal count reporting and eligibility determinations. The District will implement these corrective actions in a timely manner to address the identified findings and ensure compliance with applicable federal regulations. If you have any questions or require further details, please do not hesitate to contact me. Sincerely, Susan Johnson Superintendent of Schools Hannibal School District #60

Categories

School Nutrition Programs Cash Management Reporting Eligibility

Other Findings in this Audit

  • 517743 2024-002
    Significant Deficiency
  • 517744 2024-002
    Significant Deficiency
  • 517745 2024-002
    Significant Deficiency
  • 517746 2024-002
    Significant Deficiency
  • 517747 2024-001
    Significant Deficiency
  • 1094184 2024-002
    Significant Deficiency
  • 1094185 2024-002
    Significant Deficiency
  • 1094186 2024-002
    Significant Deficiency
  • 1094187 2024-002
    Significant Deficiency
  • 1094188 2024-002
    Significant Deficiency
  • 1094189 2024-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.027 Special Education Grants to States $959,247
84.010 Title I Grants to Local Educational Agencies $825,951
10.553 School Breakfast Program $383,746
10.555 National School Lunch Program $211,339
84.425 Education Stabilization Fund $190,922
84.048 Career and Technical Education -- Basic Grants to States $167,090
84.367 Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) $131,529
32.009 Emergency Connectivity Fund Program $121,766
84.424 Student Support and Academic Enrichment Program $62,646
10.559 Summer Food Service Program for Children $34,201
84.173 Special Education Preschool Grants $22,859
93.434 Every Student Succeeds Act/preschool Development Grants $15,399
93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response $15,000