Finding 971291 (2023-006)

Material Weakness
Requirement
L
Questioned Costs
-
Year
2023
Accepted
2024-04-26

AI Summary

  • Core Issue: The School Corporation lacks a proper system of internal controls, leading to inaccuracies in monthly reimbursement claims for meal counts.
  • Impacted Requirements: Noncompliance with federal regulations (2 CFR 200.303, 7 CFR 210.8(a), 7 CFR 220.11) regarding accurate reporting and internal controls.
  • Recommended Follow-Up: Management should establish effective internal controls and develop clear policies and procedures to ensure accurate meal count reporting.

Finding Text

FINDING 2023-006 Subject: Child Nutrition Cluster - Reporting 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 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls which would include appropriate segregation of duties that would likely be effective in preventing, or detecting and correcting, noncompliance related to the monthly reimbursement claims. Meal count reports were run from the School Corporation's meal software system on a monthly basis. The reports were then utilized by the Food Service Director or the Food Service Secretary to prepare the monthly claims for reimbursement. There was no documented review or oversight process over the monthly claims for reimbursement to prevent, or detect and correct, errors. Of the four monthly claims for reimbursement selected for testing, two included overstatements in the number of meal counts used for reimbursement purposes when compared to the supporting documentation. The lack of internal controls and noncompliance were systemic issues during the audit period. 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). . . ." 7 CFR 210.8(a) states in part: "The school food authority shall establish internal controls which ensure the accuracy of meal counts prior to submission of the monthly Claim for Reimbursement. . . ." INDIANA STATE BOARD OF ACCOUNTS 24 RANDOLPH EASTERN SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 7 CFR 210.7(c)(1) states in part: "Lunch count system. To ensure that the Claim for Reimbursement accurately reflects the number of lunches and meal supplements served to eligible children, the school food authority shall, at a minimum: . . . (iii) Base Claims for Reimbursement on lunch counts, taken daily at the point of service, which correctly identify the number of free, reduce price and paid lunches served to eligible children; (iv) Correctly record, consolidate and report those lunch and supplement counts on the Claim for Reimbursement; . . ." 7 CFR 220.11(b) states in part: "Claims for Reimbursement shall include data in sufficient detail to justify the reimbursement claimed . . ." 7 CFR 220.11(d) states in part: "The school food authority shall establish internal controls which ensure the accuracy of breakfast counts prior to submission of the monthly Claim for Reimbursement. . . ." Cause A proper system of internal controls was not designed 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 implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, reimbursement claims were not supported by the underlying records. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure meal counts are correctly reported. 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 Cash Management Material Weakness Reporting Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 394826 2023-003
    Material Weakness
  • 394827 2023-003
    Material Weakness
  • 394828 2023-003
    Material Weakness
  • 394829 2023-003
    Material Weakness
  • 394830 2023-003
    Material Weakness
  • 394831 2023-003
    Material Weakness
  • 394832 2023-003
    Material Weakness
  • 394833 2023-003
    Material Weakness
  • 394834 2023-003
    Material Weakness
  • 394835 2023-004
    Material Weakness
  • 394836 2023-004
    Material Weakness
  • 394837 2023-004
    Material Weakness
  • 394838 2023-004
    Material Weakness
  • 394839 2023-004
    Material Weakness
  • 394840 2023-004
    Material Weakness
  • 394841 2023-004
    Material Weakness
  • 394842 2023-004
    Material Weakness
  • 394843 2023-004
    Material Weakness
  • 394844 2023-005
    Material Weakness
  • 394845 2023-005
    Material Weakness
  • 394846 2023-005
    Material Weakness
  • 394847 2023-005
    Material Weakness
  • 394848 2023-005
    Material Weakness
  • 394849 2023-006
    Material Weakness
  • 394850 2023-006
    Material Weakness
  • 394851 2023-006
    Material Weakness
  • 394852 2023-006
    Material Weakness
  • 394853 2023-007
    Material Weakness
  • 394854 2023-007
    Material Weakness
  • 394855 2023-007
    Material Weakness
  • 394856 2023-007
    Material Weakness
  • 394857 2023-007
    Material Weakness
  • 394858 2023-008
    Material Weakness
  • 394859 2023-008
    Material Weakness
  • 394860 2023-008
    Material Weakness
  • 394861 2023-008
    Material Weakness
  • 394862 2023-008
    Material Weakness
  • 971268 2023-003
    Material Weakness
  • 971269 2023-003
    Material Weakness
  • 971270 2023-003
    Material Weakness
  • 971271 2023-003
    Material Weakness
  • 971272 2023-003
    Material Weakness
  • 971273 2023-003
    Material Weakness
  • 971274 2023-003
    Material Weakness
  • 971275 2023-003
    Material Weakness
  • 971276 2023-003
    Material Weakness
  • 971277 2023-004
    Material Weakness
  • 971278 2023-004
    Material Weakness
  • 971279 2023-004
    Material Weakness
  • 971280 2023-004
    Material Weakness
  • 971281 2023-004
    Material Weakness
  • 971282 2023-004
    Material Weakness
  • 971283 2023-004
    Material Weakness
  • 971284 2023-004
    Material Weakness
  • 971285 2023-004
    Material Weakness
  • 971286 2023-005
    Material Weakness
  • 971287 2023-005
    Material Weakness
  • 971288 2023-005
    Material Weakness
  • 971289 2023-005
    Material Weakness
  • 971290 2023-005
    Material Weakness
  • 971292 2023-006
    Material Weakness
  • 971293 2023-006
    Material Weakness
  • 971294 2023-006
    Material Weakness
  • 971295 2023-007
    Material Weakness
  • 971296 2023-007
    Material Weakness
  • 971297 2023-007
    Material Weakness
  • 971298 2023-007
    Material Weakness
  • 971299 2023-007
    Material Weakness
  • 971300 2023-008
    Material Weakness
  • 971301 2023-008
    Material Weakness
  • 971302 2023-008
    Material Weakness
  • 971303 2023-008
    Material Weakness
  • 971304 2023-008
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
84.425 Education Stabilization Fund 2022 $783,336
10.555 National School Lunch Program 2022 $450,325
10.555 National School Lunch Program 2023 $446,251
84.010 Title I Grants to Local Educational Agencies 2023 $321,540
84.010 Title I Grants to Local Educational Agencies 2022 $261,694
84.027 Special Education_grants to States 2022 $240,506
84.425 Education Stabilization Fund 2023 $150,570
10.553 School Breakfast Program 2022 $124,262
10.553 School Breakfast Program 2023 $118,850
84.367 Improving Teacher Quality State Grants 2022 $38,701
84.367 Improving Teacher Quality State Grants 2023 $37,336
84.358 Rural Education 2023 $25,820
84.365 English Language Acquisition State Grants 2023 $22,063
10.559 Summer Food Service Program for Children 2022 $19,781
84.424 Student Support and Academic Enrichment Program 2023 $19,160
84.365 English Language Acquisition State Grants 2022 $17,629
84.027 Special Education_grants to States 2023 $16,674
84.173 Special Education_preschool Grants 2023 $14,413
84.424 Student Support and Academic Enrichment Program 2022 $9,341
93.778 Medical Assistance Program 2022 $7,035
93.778 Medical Assistance Program 2023 $5,908
84.358 Rural Education 2022 $4,387
84.173 Special Education_preschool Grants 2022 $3,984
10.649 Pandemic Ebt Administrative Costs 2023 $628
10.649 Pandemic Ebt Administrative Costs 2022 $614