Federal Program Affected Federal Agency: U.S. Department of Agriculture Pass-Through Entity: California Department of Education (CDE) Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555 Compliance Requirement: L (Reporting) Criteria or Specific Requirements Per Title 7, Code of Federal Regulations, Subtitle B, Chapter II, Subchapter A, Parts 210.8 and 220.11, School Food Authorities (SFA) must establish internal controls which ensure the accuracy of meal counts prior to the submission of the monthly Claim for Reimbursement. Prior to submission of a monthly Claim for Reimbursement, each school food authority shall review the breakfast and lunch count data for each school under its jurisdiction to ensure the accuracy of the monthly Claim for Reimbursement. The objective of this review is to ensure that monthly claims include only the number of free, reduced price and paid breakfasts and lunches served on any day of operation to children currently eligible for such meals. SFA staff shall maintain on file each month's Claim for Reimbursement and all data used in the claims review process, by school. The above-noted CFR section also states that the SFA shall compare each school's daily counts of meals serve against the product of the number of children in that school currently eligible for free, reduced price and paid lunches, respectively, times an attendance factor. Per Title 7, Code of Federal Regulations, Subtitle B, Chapter II, Subchapter A, Parts 210.8 and 220.11, SFA must submit monthly claims for reimbursement for meals and snacks served to eligible students within 60 days following the last day of the month covered by the claim. Conditions The District did not have sufficient controls in place to ensure that monthly Claims for Reimbursement accurately reflected the numbers of meals served. We noted discrepancies between the daily meal counts and the monthly Claims for Reimbursement. It is not clear what records were used to file the monthly Claims for Reimbursement, as the worksheet provided to the auditors did not include the month of July 2021 and appeared to be incomplete for several other months and/or sites. During the audit year, the District did not use a point-of-sale (POS) system to track meals served. There was no analytical review or edit check performed to determine reasonableness of meal counts, such as comparing the number of students enrolled to the number of meals served on a daily basis by site. Such analysis would allow staff to identify possible errors timely and in advance of filing a claim. Although not required, a POS system would automate these analyses, allowing for greater staff efficiencies and accuracy. Three monthly Claims for Reimbursement were filed more than 60 days following the last day of the month covered by the claim. Questioned Costs Based on the records provided, it appears that 23,195 more meals were claimed than are supported by daily meal counts. Using the reimbursement rates in place and the categories of the meals served, the District received $79,869 in excess of the amount supported by the meal counts maintained. Context The condition was identified through inquiry with District personnel and through review of available supporting documentation for the monthly Claims for Reimbursement. Effect The District has not complied with the requirements identified in Title 7, Code of Federal Regulations, Subtitle B, Chapter II, Subchapter A, Parts 210.8 and 220.11. Cause The condition identified appears to have materialized due to the District?s lack of established procedures to ensure compliance with the requirements under Title 7, Code of Federal Regulations, Subtitle B, Chapter II, Subchapter A, Parts 210.8 and 220.11. Repeat Finding No. Recommendation The District should review the requirements stated in Title 7, Code of Federal Regulations, Subtitle B, Chapter II, Subchapter A, Parts 210.8 and 220.11 and implement procedures to address the control deficiencies currently identified. Suggestions include the return to a POS system that tracks meals served. This will allow for an electronic, permanent, and auditable record of the meals served at each site. It will also allow for a reasonableness or edit check of the meals served data.