Finding Text
FINDING 2024-004
Subject: Child Nutrition Cluster - Eligibility
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): FY 22/23, FY 23/24
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Eligibility
Audit Finding: Material Weakness
INDIANA STATE BOARD OF ACCOUNTS
23
EAST NOBLE SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Condition and Context
An effective internal control system, which would include segregation of duties, was not in place at
the School Corporation in order to ensure compliance with requirements related to the grant agreement
and the following compliance requirement: Eligibility.
Eligibility
Any child enrolled in a participating school, who meets the applicable program's definition of
"child," may receive meals under applicable programs. A child belonging to households
meeting nationwide income eligibility requirements may receive meals at no charge or at a
reduced price. Children that have been determined ineligible for free or reduced-price meals
pay the full price for their meals. A child's eligibility for free and reduced-priced meals under a
Child Nutrition Cluster program may be established by the submission of an annual application
or statement which furnished such information as family income and family size. The School
Corporation determines eligibility by comparing the data reported by the child's household to
published income eligibility guidelines. Annual eligibility determinations may also be based on
the child's household receiving benefits under the SNAP, the FDPIR, the Head Start Program,
or, under most circumstances, the TANF program. A household may furnish documentation of
its participation in one of those programs, or the School Corporation may obtain the information
directly from the state or local agency that administers those programs. Certain foster,
runaway, homeless, and migrant children are categorically eligible for free school lunches and
breakfasts. Direct certified households do not need to complete an application.
Paper applications and online applications are processed in the School Corporation's software
system to determine if students are eligible for free or reduced meals. Paper applications are
input by the Director of Food Service, and online applications are directly submitted by parents.
The software's determination of eligibility is based on income guidelines input into the software
by the Director of Food Service without an oversight or review process in place to ensure
accuracy. Additionally, the Director of Food Service downloaded the Direct Certifications file
from the CNC Web Portal and uploaded the file into the School Corporation's software on a
monthly basis without a documented oversight or review process in place to ensure directly
certified students were properly processed.
The lack of internal controls 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). . . ."
INDIANA STATE BOARD OF ACCOUNTS
24
EAST NOBLE SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Cause
Management of the School Corporation did not develop a system of internal controls to ensure the
School Corporation complied with the Eligibility compliance requirement.
Effect
Without an effective internal control system, including segregation of duties, the School Corporation
is at risk for noncompliance with the grant agreement and the Eligibility compliance requirement.
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended that the School Corporation's management establish a system of internal
controls, including segregation of duties, related to the grant agreement and the Eligibility compliance
requirement.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.