Finding Text
FINDING 2024-004
Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment
Federal Agency: Department of Agriculture
Federal Programs: School Breakfast Program, National School Lunch
Program, Summer Food Service Program
Assistance Listings Numbers: 10.553, 10.555, 10.559
Federal Award Numbers and Years (or Other Identifying Numbers): FY23, FY24
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Procurement and Suspension and Debarment
Audit Findings: Material Weakness, Other Matters
Repeat Finding
This is a repeat finding for suspension and debarment from the immediately prior report. The prior
audit finding number was 2022-005.
Condition and Context
An effective internal control system was not in place at the School Corporation to ensure
compliance with requirements related to the grant agreement and the Procurement and Suspension and
Debarment compliance requirement.
The School Corporation did not verify that one restaurant supplies vendor with a contract over
$25,000 for both fiscal years 2022-2023 and 2023-2024 was not excluded or disqualified from participation
in federal award programs.
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 180.300 states:
"When you enter into a covered transaction with another person at 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 the SAM Exclusions; or
(b) Collecting a certification from that person; or
(c) Adding a clause or condition to the covered transaction with that person."
Cause
Management of the School Corporation was unaware that all vendors who received more than
$25,000 during the school year had to be verified.
Effect
The failure to establish an effective system of internal controls enabled noncompliance to go
undetected. As a result, the School Corporation did not verify all necessary vendors were not suspended
or debarred. Without following the required methods for suspension and debarment, the Cooperative could
be paying vendors who are precluded from receiving federal funds.
Questioned Costs
There were no questioned costs identified.
Recommendation
Management of the School Corporation should develop written policies and procedures to ensure
vendors are not suspended or debarred.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.