Finding 521082 (2023-004)

Material Weakness
Requirement
L
Questioned Costs
$1
Year
2023
Accepted
2025-02-03
Audit: 341024
Organization: City of Medford (MA)

AI Summary

  • Core Issue: The School failed to maintain proper records for meal reimbursement claims, leading to inaccuracies in reported meal counts.
  • Impacted Requirements: Compliance with 7 CFR Part 225.9 (d)(5) was not met, resulting in disallowed claims totaling $25,085.69.
  • Recommended Follow-Up: Implement a point-of-sale system for accurate tracking and reconciliation of meal counts before submitting reimbursement claims.

Finding Text

2023-004 U.S. Department of Agriculture Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Child Nutrition Cluster – CFDA 10.553 & 10.555 Material Weakness in Internal Controls over Compliance and Compliance Finding Criteria: Per 7 CFR Part 225.9 (d)(5), the School must retain records that support its claims for meal reimbursements. Condition: Claims support could only be provided by the School for two months. For one month, support was in the form of spreadsheets with tray counts in lieu of a point-of-sale system. For the other month, the tray count spreadsheets were accompanied by reports from the point-of-sale system. The point-of-sale system reports provided did not agree to the amounts claimed for reimbursement. The tray counts did not indicate whether the meal provided was paid, free or reduced. The claims for reimbursement submitted by the School used allocation percentages derived from prior year claims when estimating amounts to be claimed as paid, free and reduced. The tray count spreadsheets for the other months could not be located by the School. Cause: The Food Service Department did not maintain an adequate meal claiming system and the School did not adequately monitor its Food Service Department for compliance with Federal regulations. Effect: Tray counts are not an accurate representation of the meals served nor appropriate support for the purposes of submitting claims for reimbursement. The pass-through agency disallowed $25,085.69 of meals claimed. A lack of a point-of-sale system also does not adequately safeguard the assets of the school lunch program. Questioned Costs: $1,206,794.91, which represents the amounts reimbursed for fiscal year 2023 for claims submitted. Perspective Information: The months tested do not represent a statistically valid sample. Repeat Finding from Prior Year: No Recommendation: The City should utilize a point-of-sale system for tracking student meal counts and submitting claims for reimbursements. Amounts claimed should be reconciled to the point-of-sale system reports before submitting. Views of Responsible Official: Management agrees with the finding.

Corrective Action Plan

Condition: Claims support could only be provided by the School for two months. For one month, support was in the form of spreadsheets with tray counts in lieu of a point-of-sale system. For the other month, the tray count spreadsheets were accompanied by reports from the point-of-sale system. The point-of-sale system reports provided did not agree to the amounts claimed for reimbursement. The tray counts did not indicate whether the meal provided was paid, free or reduced. The claims for reimbursement submitted by the School used allocation percentages derived from prior year claims when estimating amounts to be claimed as paid, free and reduced. The tray count spreadsheets for the other months could not be located by the School. Corrective Action Planned: In January 2023 DESE sent an auditor to review the Medford School Nutrition Program. Before this review, there was significantly limited oversight by the central office finance team. Almost no documents were prepared before the review as required by DESE. As a result of this audit a 58-item, 19-page Corrective Action Plan was issued to the district. A new district leader was assigned for departmental oversight. The district then had weekly meetings with DESE to address the corrective action plan, for this was the single largest CAP DESE has issued to any district of our size. Nearly $1.3 million in reimbursements were withheld from the district from approximately November 2022 through the end of the Fiscal Year. DESE issued the reimbursements with a nominal penalty during the summer of 2023. At the end of FY23, the district terminated the director of the program. We are now training several individuals in the MCPPO program for enhanced oversight. DESE forced an immediate return audit for FY24. This was an exceptional action as DESE has only rarely done this. The same reviewer attended and noted significant improvements as a result of district actions undertaken. As relates to this particular finding, the School Department has purchased and is consistently using a point of sale system for students to purchase their meals. The system is used to track all transactions. Anticipated Completion Date: 2/17/2025 Contact: Peter Cushing, Assistant Superintendent

Categories

Questioned Costs School Nutrition Programs Allowable Costs / Cost Principles Cash Management Material Weakness Internal Control / Segregation of Duties

Other Findings in this Audit

  • 521083 2023-005
    Material Weakness
  • 521084 2023-006
    Material Weakness
  • 521085 2023-007
    Significant Deficiency Repeat
  • 521086 2023-004
    Material Weakness
  • 521087 2023-005
    Material Weakness
  • 521088 2023-006
    Material Weakness
  • 521089 2023-007
    Significant Deficiency Repeat
  • 521090 2023-004
    Material Weakness
  • 521091 2023-005
    Material Weakness
  • 521092 2023-006
    Material Weakness
  • 521093 2023-007
    Significant Deficiency Repeat
  • 521094 2023-010
    Material Weakness
  • 521095 2023-008
    Material Weakness
  • 521096 2023-009
    Significant Deficiency
  • 521097 2023-008
    Material Weakness
  • 521098 2023-009
    Significant Deficiency
  • 521099 2023-008
    Material Weakness
  • 521100 2023-009
    Significant Deficiency
  • 521101 2023-008
    Material Weakness
  • 521102 2023-009
    Significant Deficiency
  • 1097524 2023-004
    Material Weakness
  • 1097525 2023-005
    Material Weakness
  • 1097526 2023-006
    Material Weakness
  • 1097527 2023-007
    Significant Deficiency Repeat
  • 1097528 2023-004
    Material Weakness
  • 1097529 2023-005
    Material Weakness
  • 1097530 2023-006
    Material Weakness
  • 1097531 2023-007
    Significant Deficiency Repeat
  • 1097532 2023-004
    Material Weakness
  • 1097533 2023-005
    Material Weakness
  • 1097534 2023-006
    Material Weakness
  • 1097535 2023-007
    Significant Deficiency Repeat
  • 1097536 2023-010
    Material Weakness
  • 1097537 2023-008
    Material Weakness
  • 1097538 2023-009
    Significant Deficiency
  • 1097539 2023-008
    Material Weakness
  • 1097540 2023-009
    Significant Deficiency
  • 1097541 2023-008
    Material Weakness
  • 1097542 2023-009
    Significant Deficiency
  • 1097543 2023-008
    Material Weakness
  • 1097544 2023-009
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $10.81M
14.218 Community Development Block Grants/entitlement Grants $2.01M
84.027 Special Education Grants to States $1.05M
84.010 Title I Grants to Local Educational Agencies $670,585
10.553 School Breakfast Program $222,829
84.425U Education Stabilization Fund $200,000
84.027X Special Education Grants to States $115,623
10.555 National School Lunch Program $101,286
84.367 Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) $79,317
16.922 Equitable Sharing Program $58,733
93.959 Block Grants for Prevention and Treatment of Substance Abuse $43,553
84.173 Special Education Preschool Grants $32,388
84.424 Student Support and Academic Enrichment Program $31,268
84.365 English Language Acquisition State Grants $26,114
84.173X Special Education Preschool Grants $24,274
10.558 Child and Adult Care Food Program $23,887
84.048 Career and Technical Education -- Basic Grants to States $14,922
84.425W Education Stabilization Fund $9,500
84.425D Education Stabilization Fund $6,953
16.607 Bulletproof Vest Partnership Program $3,502
93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance $2,187