Finding Text
Child Nutrition Segregation of Duties Federal Agency: U.S. Department of Agriculture Federal Program Title: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559 and 10.582 Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Entity Identifying Number: 2022-102394-DPI-SB-SEVERE-546, 2022-102394-DPI-NSL-547, 2022-102394-DPI-SK_NSLAE-561, 2022-102394-DPI-FFVP-Oct-376, 2022-102394-DPI-SFSP-561, 2022-102394-DPI-FFVP-July-594 Award period: July 1, 2021 ? June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or Specific Requirement: Segregation of duties is an internal control intended to prevent or decrease the occurrence of errors or intentional fraud. Segregation of duties ensures that no single employee has control over all phases of a transaction. Condition: The Business Service Director is responsible for preparing and submitting claims related to the Child Nutrition Cluster and the District administrative assistant is responsible for updating student eligibility records based on verification of income eligibility. There is no formal, documented review or verification by someone other than the preparer that the appropriate steps are being followed or completed. Accordingly, this does not document proper segregation of duties for internal control purposes. Questioned Costs: None. Context: When identifying internal controls over compliance related to reporting (reimbursement requests) and verification of eligibility (special tests and provisions), it was noted that there were no formal, documented controls in place to review that procedures were performed as required and that there was a review over the work to prevent error or fraud. Cause: With the limited staffing at the District, there is one person that was dedicated for each area and the review has not been documented properly. Effect: Errors or intentional fraud could occur and not be detected timely by other employees in the normal course of their responsibilities as a result of the lack of segregation of duties. The District could over- or under-claim monthly reimbursements resulting in payment back or unearned reimbursement from the granting agency. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2021-006. Recommendation: We recommend that the District implement a formal review process over the reporting and verification requirements related to the Child Nutrition Cluster during the fiscal year and properly retain the documentation. Views of Responsible Officials: There is no disagreement with the audit finding.