Finding Text
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: Eligibility
Audit Finding: Material Weakness, Material Noncompliance, Qualified Opinion
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 eligibility compliance
requirement.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with eligibility 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 known questioned costs identified.
Context: During the testing of internal controls over eligibility determinations via the application process
and related compliance, we noted the School Corporation was not able to provide the application or any
documentation to support the eligibility status for 6 out of the 8 applicant students selected for tested for
the 2022-2023 school year. There were no issues identified for students selected for testing whose eligibility
was directly certified.
Additionally, for the 2023-2024 school year, for 2 out of 30 students selected for the testing, the income
eligibility determinations were not properly implemented. One student was determined to be eligible for
"Free" meals per their free/reduced application but, the School Corporation incorrectly entered the eligibility
as “Reduced” within the food service software. Another student was eligible for "Reduced" benefits per the
direct certified download file but was entered into the food service software as eligible for "Free" benefits.
Identification as a repeat finding, if applicable: No.
Recommendation: We recommend that the School Corporation's management strengthen their internal
control process to ensure retention of documentation that supports eligibility determination, particular for
the determinations completed through the application process. We also recommend management perform
a secondary review of income eligibility determinations entered into the food service software to ensure
accurate statuses are entered.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.