Finding Text
Federal Program: Child Nutrition Cluster
ALN #: 10.553 and 10.555
Federal Agency: U.S. Department of Agriculture
Pass-through entity: Michigan Department of Education
Pass-through number: 220910, 221960, 231960, 221970, 231970
Criteria:
According to Federal guidelines, all free and reduced priced meals claimed for reimbursement will be served only to eligible students based on direct certifications and applications submitted by families, which are reviewed and approved by District personnel, according to annually adjusted income thresholds.
Condition:
During our auditing testing, we noted instances where free or reduced students did not have a current application on file with the District. Typically, the software used by the District would give a 30 day grace period for not having an application and then change the student in the system to being full pay, until an application was submitted. At the start of the year, the District switched software and the software did not automatically change the students to full pay status. This only affected one school building in the District, as the other buildings in the District were under the Community Eligibility Provision (CEP). CEP buildings do not have to use the normal free and reduced application process.
Cause:
The District failed to follow up on free and reduced students who did not submit new applications for the current year. The District did not have proper internal controls over eligibility.
Effect:
As a result, the District provided free or reduced priced meals to students who may not have been eligible to receive them.
Questioned Costs:
$2,295 - actual; $19,279- estimated amount when extrapolated
Recommendation:
We recommend that the District put in place controls to ensure that there is a process to verify the free and reduced students submit applications or be switched to full pay status in their software.
District’s Response:
The District concurs with the facts of this finding and will put procedures in place to verify that free and reduced students all have applications on file and properly qualify for that status.