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FINDING 2022-001Subject: Child Nutrition Cluster - Internal ControlsFederal Agency: Department of AgricultureFederal Programs: School Breakfast Program, National School Lunch Program, SummerFood Service Program for Children, Fresh Fruit and Vegetable ProgramAssistance Listings Numbers: 10.553, 10.555, 10.559, 10.582Federal Award Numbers and Years (or Other Identifying Numbers): FY22Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Finding: Material WeaknessCondition and ContextAn effective internal control system was not in place at the School Corporation in order to ensurecompliance with requirements related to the grant agreement and the Reporting compliance requirement.The School Corporation failed to properly implement a review of the reimbursement request prepared and submitted to the Indiana Department of Education. Although, one employee compiled andentered the necessary information into the reimbursement request, and the Director of Food Servicesreviewed and submitted the request, the Director's signature or other corroborating evidence was notalways present. Of the 24 reimbursement requests submitted, 11 did not contain the Director's signatureor other corroborating evidence that the request had been reviewed.The lack of internal controls was isolated to fiscal year 2021-2022.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the grant agreement and the Reporting compliance requirement.EffectThe failure to establish an effective internal control system placed the School Corporation at risk ofnoncompliance with the grant agreement and the Reporting compliance requirement.INDIANA STATE BOARD OF ACCOUNTS16MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.