Finding 588187 (2023-001)

Assistance Listing Number, Federal Agency, and Program Name - 10.553, 10.555, 10.559 - Child Nutrition Cluster Federal Award Identification Number and Year - 231960, 221970, 230900 Pass-through Entity - Michigan Department of Education Finding Type - Significant deficiency Repeat Finding - No Criteria - Children from households with incomes at or below 130 percent of the federal poverty level are eligible to receive meals or milk free under the School Nutrition Programs. Children from households with incomes above 130 percent but at or below 185 percent of the federal poverty level are eligible to receive reduced price meals. Persons from households with incomes exceeding 185 percent of the poverty level pay the full price (7 CFR sections 245.2, 245.3, and 245.6; section 9(b)(1) of the NSLA (42 USC 1758 (bK1))i sections 3(a)(6) and 4(e) of the CNA (42 USC 1772(a)(6) and 1773(e))). Condition - The School District did not properly review student applications to be eligible for free or reduced cost meals within the school nutrition program. As a result, one application approved for reduced lunch was ultimately ineligible for reduced cost meals under the school nutrition program. Questioned Costs - Less than the $25,000 required reportng threshold Identification of How Questioned Costs Were Computed - Questioned costs were calculated by the number reduced meals provided to the ineligible students, multiplied by the reimbursement rate. Context - The School District had a total of 53 manual applications received for free or reduced lunch, one of which one was determined to be ineligible. Cause and Effect - Substantially all eligible students are identified through the State's direct certification program. Some student eligibility is determined via the School District's application process. The School District did not properly review student applications to be eligible for free or reduced cost meals within the school nutrition program. As a result, the District failed to identify one inaccurate application, which led to two ineligible students who ultimately received reduced cost meals provided by the school nutrition program. Recommendation - We recommend the School District implement procedures to monitor and review student applications to quality for free or reduced cost meals within the school nutrition program, to appropriately ensure the student is eligible to participate. Views of Responsible Officials and Corrective Action Plan - The School District agrees with the above recommendation and will implement proper procedures and controls to ensure eligibility is monitored and reviewed for students applying for free or reduced cost meals under the school nutrition program.