Finding 528536 (2024-005)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2024
Accepted
2025-03-18

AI Summary

  • Core Issue: The School Corporation lacks effective internal controls over meal reimbursement claims, leading to repeated errors in reporting.
  • Impacted Requirements: Compliance with federal reporting standards (2 CFR 200.303 and 200.302) is not met, risking noncompliance with grant agreements.
  • Recommended Follow-Up: Management should implement robust internal controls and procedures for claim preparation and review to ensure accuracy and compliance.

Finding Text

FINDING 2024-005 Subject: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Monthly Sponsor Claims for Reimbursement (Claims) were submitted to the Indiana Department of Education based upon the number of meals served for the month. The Claims were prepared by the Food Service Manager or food service management company (FSMC) employee. INDIANA STATE BOARD OF ACCOUNTS 26 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation maintained manual meal count records. A point-of-sale system (POS) was used for some schools in some months, but it was not consistent. The reports from the POS identified second student meals and staff meals that were included in the amounts claimed for reimbursement. For all three Claims tested, there were differences between the Claims submitted and the School Corporation's detail meal count reports, resulting in over and under reporting and reimbursement. The Claims tested contained the following errors:  The December 2022 claim reported 41 more meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in overclaimed reimbursement totaling $109. Of this total, $59 (22 meals) was due to improperly claiming second student or staff meals.  The March 2023 claim in total reported more meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in overclaimed meals totaling $4,254. Of this total, $4,144 was due to claiming second student or staff meals, totaling $1,035, for breakfast and lunch. The School Corporation also underclaimed snacks by 421, which resulted in under reimbursement of $455. Finally, the claim also contained overcount errors of 136 meals, resulting in overclaimed reimbursement of $565.  The August 2023 claim reported fewer meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in underclaimed meals in net totaling $11,474. The School Corporation did not claim meals served on August 31, 2023, totaling 3,879 meals. This resulted in underclaimed meal reimbursement totaling $13,767. The School Corporation also claimed 141 second student and staff meals, which resulted in overclaimed reimbursement totaling $480. Finally, the claim also contained overcount errors of 497 meals, resulting in overclaimed reimbursement of $1,813. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award 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). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." INDIANA STATE BOARD OF ACCOUNTS 27 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not have effective internal control procedures in place over the Claims submitted. The Claims did not contain evidence of an oversight or review process in place to prevent, or detect and correct, errors. The Claims were prepared based upon a summary sheet prepared by the FSMC employee and were not verified back to the source records. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and develop policies and procedures over the preparation and review of claims to ensure appropriate reviews, approval, and oversight are taking place. Additionally, management should develop policies and procedures to ensure that the FSMC provides the School Corporation with complete and accurate information for all claim submissions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Categories

School Nutrition Programs Cash Management Material Weakness Reporting Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 528521 2024-003
    Material Weakness Repeat
  • 528522 2024-003
    Material Weakness Repeat
  • 528523 2024-003
    Material Weakness Repeat
  • 528524 2024-003
    Material Weakness Repeat
  • 528525 2024-003
    Material Weakness Repeat
  • 528526 2024-003
    Material Weakness Repeat
  • 528527 2024-004
    Material Weakness Repeat
  • 528528 2024-004
    Material Weakness Repeat
  • 528529 2024-004
    Material Weakness Repeat
  • 528530 2024-004
    Material Weakness Repeat
  • 528531 2024-004
    Material Weakness Repeat
  • 528532 2024-004
    Material Weakness Repeat
  • 528533 2024-005
    Material Weakness Repeat
  • 528534 2024-005
    Material Weakness Repeat
  • 528535 2024-005
    Material Weakness Repeat
  • 528537 2024-005
    Material Weakness Repeat
  • 528538 2024-005
    Material Weakness Repeat
  • 528539 2024-006
    Material Weakness Repeat
  • 528540 2024-006
    Material Weakness Repeat
  • 528541 2024-007
    Material Weakness Repeat
  • 528542 2024-007
    Material Weakness Repeat
  • 528543 2024-008
    Significant Deficiency Repeat
  • 528544 2024-008
    Significant Deficiency Repeat
  • 528545 2024-009
    Material Weakness Repeat
  • 528546 2024-009
    Material Weakness Repeat
  • 528547 2024-009
    Material Weakness Repeat
  • 528548 2024-009
    Material Weakness Repeat
  • 528549 2024-009
    Material Weakness Repeat
  • 528550 2024-009
    Material Weakness Repeat
  • 1104963 2024-003
    Material Weakness Repeat
  • 1104964 2024-003
    Material Weakness Repeat
  • 1104965 2024-003
    Material Weakness Repeat
  • 1104966 2024-003
    Material Weakness Repeat
  • 1104967 2024-003
    Material Weakness Repeat
  • 1104968 2024-003
    Material Weakness Repeat
  • 1104969 2024-004
    Material Weakness Repeat
  • 1104970 2024-004
    Material Weakness Repeat
  • 1104971 2024-004
    Material Weakness Repeat
  • 1104972 2024-004
    Material Weakness Repeat
  • 1104973 2024-004
    Material Weakness Repeat
  • 1104974 2024-004
    Material Weakness Repeat
  • 1104975 2024-005
    Material Weakness Repeat
  • 1104976 2024-005
    Material Weakness Repeat
  • 1104977 2024-005
    Material Weakness Repeat
  • 1104978 2024-005
    Material Weakness Repeat
  • 1104979 2024-005
    Material Weakness Repeat
  • 1104980 2024-005
    Material Weakness Repeat
  • 1104981 2024-006
    Material Weakness Repeat
  • 1104982 2024-006
    Material Weakness Repeat
  • 1104983 2024-007
    Material Weakness Repeat
  • 1104984 2024-007
    Material Weakness Repeat
  • 1104985 2024-008
    Significant Deficiency Repeat
  • 1104986 2024-008
    Significant Deficiency Repeat
  • 1104987 2024-009
    Material Weakness Repeat
  • 1104988 2024-009
    Material Weakness Repeat
  • 1104989 2024-009
    Material Weakness Repeat
  • 1104990 2024-009
    Material Weakness Repeat
  • 1104991 2024-009
    Material Weakness Repeat
  • 1104992 2024-009
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
84.010 Title I Grants to Local Educational Agencies 2023 $14.06M
84.010 Title I Grants to Local Educational Agencies 2024 $6.94M
10.555 National School Lunch Program 2023 $2.44M
10.555 National School Lunch Program 2024 $2.33M
84.027 Special Education Grants to States 2023 $1.90M
84.367 Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) 2024 $1.07M
10.553 School Breakfast Program 2024 $953,527
10.553 School Breakfast Program 2023 $945,463
32.009 Emergency Connectivity Fund Program 2023 $718,836
84.367 Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) 2023 $489,926
84.027 Special Education Grants to States 2024 $239,509
84.048 Career and Technical Education -- Basic Grants to States 2024 $215,114
93.778 Medical Assistance Program 2024 $205,528
84.048 Career and Technical Education -- Basic Grants to States 2023 $199,060
93.778 Medical Assistance Program 2023 $189,532
84.287 Twenty-First Century Community Learning Centers 2024 $148,502
84.287 Twenty-First Century Community Learning Centers 2023 $102,626
84.425 Education Stabilization Fund 2023 $81,866
84.173 Special Education Preschool Grants 2023 $77,140
10.559 Summer Food Service Program for Children 2023 $67,989
10.559 Summer Food Service Program for Children 2024 $45,906
12.357 Rotc Language and Culture Training Grants 2024 $41,698
12.357 Rotc Language and Culture Training Grants 2023 $31,286
84.196 Education for Homeless Children and Youth 2024 $30,046
84.425 Education Stabilization Fund 2024 $24,674
84.173 Special Education Preschool Grants 2024 $23,959
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program 2024 $18,386
84.196 Education for Homeless Children and Youth 2023 $13,090
10.649 Pandemic Ebt Administrative Costs 2023 $3,135
93.079 Cooperative Agreements to Promote Adolescent Health Through School-Based Hiv/std Prevention and School-Based Surveillance 2023 $500