Finding 62118 (2022-001)

Significant Deficiency
Requirement
L
Questioned Costs
$1
Year
2022
Accepted
2023-01-08
Audit: 50517
Auditor: Rsm US LLP

AI Summary

  • Core Issue: A monthly claim for the National School Lunch Program overstated meals served by 593, leading to questioned costs of $2,170.
  • Impacted Requirements: Claims must be supported by accurate records and submitted within 60 days; failure to comply risks funding termination.
  • Recommended Follow-Up: Implement an additional review process for claims before submission to ensure accuracy and compliance.

Finding Text

Finding No. 2022-001 ? Reporting Federal Agency: U.S. Department of Agriculture Program: Child Nutrition Cluster ? National School Lunch Program: ALN: 10.555 Criteria: The Organization 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. Each month?s claim for reimbursement and all data used in the claims review process must be maintained on file. Accurate records must be maintained justifying all meals claimed and documenting that all program funds were spent only on allowable child nutrition program costs. Condition: Of the 3 monthly claims that we selected for test work, we identified 1 monthly claim submitted for reimbursement to the State agency that did not agree to supporting records indicating the meals served for one site were 2,839 and actual meals served were 2,246, overstating meals served by 593. Questioned Costs: $2,170 which consisted of 593 meals claimed for reimbursement at the applicable rate that were not served. Prevalence: Identified in 1 out of 3 monthly reports tested. The sample was not intended to be, and was not, a statistically valid sample. Effect: Failure to properly review claims for reimbursement could lead to noncompliance and potential questioned costs or termination of funding from the program for lack of controls over compliance requirements. Cause: The Organization did not have a process in place to review the claim for reimbursement after it was entered into the State agency?s system and prior to submission. Due to lack of review prior to submitting the claim for reimbursement potential errors were not identified timely which resulted in the Organization being improperly reimbursed for meals served. Recommendation: We recommend the Organization implement an additional layer of review of the claims to supporting records prior to submission for reimbursement. View of Responsible Officials and Planned Corrective Actions: Management agrees with the finding.

Corrective Action Plan

Finding: During a review by the external auditors of the tally sheets utilized by the clubs for meals served and submitted to the finance department for input into the billing system used by the Department of Education (DOE) for reimbursement, it was discovered that an incorrect number of meals was keyed into the system for one club. The number of meals submitted was higher than what the club had originally reported and resulted in an overpayment received from DOE. Corrective Actions Taken or Planned: The organization, with oversight from Kay Ridgard, Controller, immediately contacted DOE and let them know of the error. DOE made the corrective adjustment in their system and recovered the overpayment by reducing the upcoming September 2022 payment due to the organization by the amount of the overpayment received. There was a complete review of the internal process used in the billing of DOE for meals for each location. The process for submission for reimbursement is outlined below with changes highlighted: 1. Tally sheets sent from the clubs are reviewed by the Accounts Payable Associate (Procurement Coordinator when hired) to ensure that there are no addition errors. 2. Numbers from the tally sheets are entered into an Excel file to give summary totals for the organization and this is used by the Accounts Payable Associate to input data into the DOE system. 3. The Controller (or Manager) reviews the excel file before the data is input into the DOE system to ensure it accurately reflects the tally sheets. 4. Data is input in the DOE system and reports are generated showing the accepted submission that will be reimbursed. 5. The Controller (or Manager) performs a second review to ensure the submitted data match the previously reviewed Excel file.

Categories

Questioned Costs School Nutrition Programs Cash Management Reporting

Other Findings in this Audit

  • 62119 2022-001
    Significant Deficiency
  • 62120 2022-001
    Significant Deficiency
  • 62121 2022-001
    Significant Deficiency
  • 638560 2022-001
    Significant Deficiency
  • 638561 2022-001
    Significant Deficiency
  • 638562 2022-001
    Significant Deficiency
  • 638563 2022-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
16.548 Title V_delinquency Prevention Program $38,716
10.555 National School Lunch Program $33,302
93.235 Title V State Sexual Risk Avoidance Education (title V State Srae) $15,290
10.558 Child and Adult Care Food Program $3,554
93.575 Child Care and Development Block Grant $2,928
93.596 Child Care Mandatory and Matching Funds of the Child Care and Development Fund $1,412
93.558 Temporary Assistance for Needy Families $869