Finding Text
FINDING 2024-004
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): FY2023, FY2024
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Suspension and Debarment
Audit Finding: Material Weakness
Criteria: 2 CFR 180.300 states:
“When you enter into a covered transaction with another person as the next lower tier, you must verify that
the person with whom you intend to do business is not excluded or disqualified. You do this by:
(a) Checking SAM Exclusions; or
(b) Collecting a certification from that person; or
(c) Adding a clause or condition to the covered transaction with that person.”
Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Program and Suspension and Debarment compliance requirements.
Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Suspension and Debarment compliance requirement.
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: For 1 of 2 items sampled, the School Corporation did not have any support to show the vendor was not debarred or suspended. The item was an equipment purchase for $56,470. No issues were noted with the procurement of the item.
Identification as a repeat finding, if applicable: No.
Recommendation: We recommended that management monitor annual vendor activity to ensure vendors that exceed small purchase threshold and suspension and debarment threshold in aggregate are reviewed for potential analysis and suspension and debarment checks required by federal and state regulations.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.