Finding 961881 (2023-005)

Material Weakness
Requirement
E
Questioned Costs
-
Year
2023
Accepted
2024-03-27

AI Summary

  • Core Issue: Lack of internal controls in processing Direct Certification reports led to a material weakness in eligibility determinations for free and reduced-price meals.
  • Impacted Requirements: Compliance with 2 CFR 200.303, which mandates effective internal controls over federal awards.
  • Recommended Follow-Up: Implement a robust internal control system with clear policies and procedures to ensure proper oversight and segregation of duties.

Finding Text

FINDING 2023-005 Subject: Child Nutrition Cluster - Eligibility Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY 23 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Material Weakness Condition and Context Any child enrolled in a participating school, who meets the applicable program's definition of "child," may receive meals under applicable programs. A child belonging to households meeting nationwide income eligibility requirements may receive meals at no charge or at a reduced price. Children that have been determined ineligible for free or reduced-price meals pay the full price for their meals. A child's eligibility for free and reduced-priced meals under a Child Nutrition Cluster program may be established by the submission of an annual application or statement which furnished such information as family income and family size. The School Corporation determines eligibility by comparing the data reported by the child's household to published income eligibility guidelines. Annual eligibility determinations may also be based on the child's household receiving benefits under SNAP, FDPIR, the Head Start Program, or, under most circumstances, the TANF program. A household may furnish documentation of its participation in one of those programs, or the School Corporation may obtain the information directly from the State or local agency that administers those programs. Certain foster, runaway, homeless, and migrant children are categorically eligible for free school lunches and breakfasts. Direct certified households do not need to complete an application. One employee uploaded the Direct Certification reports from the state into the software system without a documented oversight or review process in place to ensure direct certified students were properly processed. The lack of internal controls was isolated to fiscal year 2022-2023. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 28 METROPOLITAN SCHOOL DISTRICT OF SOUTHWEST ALLEN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls, which would include segregation of key functions, was not implemented by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Categories

School Nutrition Programs Internal Control / Segregation of Duties Eligibility Matching / Level of Effort / Earmarking Material Weakness

Other Findings in this Audit

  • 385430 2023-002
    Material Weakness
  • 385431 2023-002
    Material Weakness
  • 385432 2023-003
    Material Weakness
  • 385433 2023-003
    Material Weakness
  • 385434 2023-004
    Material Weakness Repeat
  • 385435 2023-004
    Material Weakness Repeat
  • 385436 2023-004
    Material Weakness Repeat
  • 385437 2023-004
    Material Weakness Repeat
  • 385438 2023-005
    Material Weakness
  • 385439 2023-005
    Material Weakness
  • 385440 2023-006
    Material Weakness Repeat
  • 385441 2023-006
    Material Weakness Repeat
  • 385442 2023-006
    Material Weakness Repeat
  • 385443 2023-006
    Material Weakness Repeat
  • 385444 2023-007
    Material Weakness
  • 385445 2023-007
    Material Weakness
  • 385446 2023-007
    Material Weakness
  • 385447 2023-007
    Material Weakness
  • 385448 2023-007
    Material Weakness
  • 961872 2023-002
    Material Weakness
  • 961873 2023-002
    Material Weakness
  • 961874 2023-003
    Material Weakness
  • 961875 2023-003
    Material Weakness
  • 961876 2023-004
    Material Weakness Repeat
  • 961877 2023-004
    Material Weakness Repeat
  • 961878 2023-004
    Material Weakness Repeat
  • 961879 2023-004
    Material Weakness Repeat
  • 961880 2023-005
    Material Weakness
  • 961882 2023-006
    Material Weakness Repeat
  • 961883 2023-006
    Material Weakness Repeat
  • 961884 2023-006
    Material Weakness Repeat
  • 961885 2023-006
    Material Weakness Repeat
  • 961886 2023-007
    Material Weakness
  • 961887 2023-007
    Material Weakness
  • 961888 2023-007
    Material Weakness
  • 961889 2023-007
    Material Weakness
  • 961890 2023-007
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
10.555 National School Lunch Program 2022 $3.75M
10.555 National School Lunch Program 2023 $2.47M
10.553 School Breakfast Program 2022 $440,921
84.010 Title I Grants to Local Educational Agencies 2022 $277,959
84.027 Special Education_grants to States 2023 $253,867
10.553 School Breakfast Program 2023 $251,219
84.010 Title I Grants to Local Educational Agencies 2023 $152,794
93.778 Medical Assistance Program 2023 $115,781
84.367 Improving Teacher Quality State Grants 2023 $88,593
93.778 Medical Assistance Program 2022 $77,307
84.027 Special Education_grants to States 2022 $68,082
84.424 Student Support and Academic Enrichment Program 2022 $62,535
84.367 Improving Teacher Quality State Grants 2022 $51,574
84.048 Career and Technical Education -- Basic Grants to States 2022 $43,123
84.173 Special Education_preschool Grants 2022 $36,371
84.048 Career and Technical Education -- Basic Grants to States 2023 $36,125
84.425 Education Stabilization Fund 2022 $33,992
84.173 Special Education_preschool Grants 2023 $28,174
84.365 English Language Acquisition State Grants 2022 $10,821
84.365 English Language Acquisition State Grants 2023 $8,992
84.196 Education for Homeless Children and Youth 2022 $5,441
10.649 Pandemic Ebt Administrative Costs 2023 $3,135
10.649 Pandemic Ebt Administrative Costs 2022 $3,063
84.425 Education Stabilization Fund 2023 $1,469
84.424 Student Support and Academic Enrichment Program 2023 $728