Finding Text
Information on the federal program:
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Program: School Breakfast Program, National School Lunch Program
Assistance Listing Number: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): FY 22-23, FY 23-24
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Eligibility
Audit Finding: Material Weakness
Criteria: 2 CFR section 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance
that the non-Federal entity is managing the Federal awards 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). . . ."
Condition: An effective internal control system was not in place at the School Corporation in order to
ensure compliance with requirements related to the grant agreement and the eligibility compliance
requirement.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with eligibility requirements.
Effect: The failure to establish an effective internal control system placed the School Corporation at risk of
noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties
within an internal control system could have also allowed noncompliance with the compliance requirements
and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight,
reviews, and approvals over the activities of the programs.
Questioned Costs: There were no questioned costs identified.
Context: The School Corporation’s internal controls over eligibility included an annual approval of the food
service software’s eligibility guidelines and also a documented review of individual meal applications by
Food Service Department staff. During testing of eligibility, we noted 7 applications, out of 60 total students
tested for the audit period, that did not have a timely, documented review by Food Service Department
staff. The lack of review was isolated to fiscal year 2023. Additionally, there was no documented annual
review by School Corporation personnel of the fiscal year 2024 income eligibility guidelines used by the
food service software.
Identification as a repeat finding, if applicable: No. Recommendation: We recommend School Corporation management review internal controls over
eligibility and ensure a documented review occurs annually of income eligibility guidelines used by the food
service software. We also recommend management document their review of applications entered into the
system and ensure applications are maintained to support eligibility determinations made.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.