Finding Text
FINDING 2024-005
Information on the federal program:
Subject: Child Nutrition Cluster - Reporting
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
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Reporting
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 cash management compliance requirement.
Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the reporting 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: During the testing of claim reimbursements, we noted for two monthly reimbursements in a sample of six claims that the claim reimbursements were not being reviewed by an independent individual before being submitted to IDOE. In March 2023, the School Corporation implemented a review control over the monthly claim reimbursement. The lack of controls was isolated to the period of July 2022 through February 2023 during fiscal year 2023.
For all six claims tested, we agreed the number of meals claimed for reimbursement to underlying meal system reports without exception.
Identification as a repeat finding, if applicable: Yes. See Finding 2022-003 in the prior period audit report.
Recommendation: We recommended that the School Corporation's management continue to review internal controls surrounding the claim reimbursement process. The secondary, documented review of the request for reimbursement should include a review of the underlying meal count reports to ensure the claim reimbursement request is accurate and complete.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.