Marian High School

INTERNAL CONTROLS OVER COMPLIANCE REQUIREMENTS Federal Agency: Department of Agriculture Federal Program or Cluster: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, and 10.559 Federal Award Numbers and Years: Award Periods 7/1/2021-6/30/2022: K241 Questioned Costs: $0 Condition: The School's accounting and procedures manual did not include written policies or procedures that address all applicable compliance areas under the Uniform Guidance, including eligibility and reporting. Criteria: The School must establish and maintain effective internal controls over federal awards that provide reasonable assurance that the non-federal entity is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Cause: The School did not document internal controls over federal awards in accordance with the Uniform Guidance. Effect: The absence of documented policies and procedures could result in noncompliance with the terms of federal awards. Recommendation: The School should document and adhere to written policies and procedures that reflect current OMB requirements under the Uniform Guidance. This accounting and procedures manual should be monitored and revised annually as necessary. Identification of repeat findings: This finding is a repeat finding previously included as finding number 2021-010 in the audit of the financial statements for the year ended June 30, 2021. View of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has developed a set of policies and documented them. The School represents that this was completed during the fiscal year ended June 30, 2023, however, a single audit has not been conducted for this period.

Management agrees with the finding and has developed a set of policies and documented them. The Business Manager has implemented the changes as of June 2023.

2021-010

ALLOWABLE COSTS Federal Agency: Department of Agriculture Federal Program or Cluster: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, and 10.559 Federal Award Numbers and Years: Award Periods 7/1/2021-6/30/2022: K241 Questioned Costs: $10,159 Condition: The School did not maintain proper supporting documentation for expenses, including those claimed under the major federal program. These expenses include employee reimbursements. Criteria: The School must establish and maintain effective internal controls over federal awards that provide reasonable assurance that the non-federal entity is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Cause: The School has not properly implemented a system of internal control over disbursements. Effect: The Food Service program revenue is based on meals served, but allowable costs affect the food service bank balance which is restricted for food service program expenses only. Spending funds on unrelated School expenses could result in the grantor not approving the School to operate the program in the next school year. Asset misappropriation could occur if supporting documentation is not required and approved before funds are disbursed. Recommendation: The School should establish and maintain effective internal controls over federal awards that require proper documentation to be maintained on file to support the purpose and amount of all expenditures of federal awards. Identification of repeat findings: This is not a repeat finding. View of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has established a monthly meeting between the Business Manager and the Cafeteria Director in order to review the monthly budget and ascertain that all appropriate expenses are disbursed only for the federally funded department. The Business Manager has implemented these changes. The School represents that this was completed during the fiscal year ended June 30, 2023, however, a single audit has not been conducted for this period.

Management agrees with the finding and has established a monthly meeting between the Business Manager and the Cafeteria Director in order to review the monthly budget and ascertain that all appropriate expenses are disbursed only for the federally funded department. The Business Manager has implemented these accounting changes as of September 2022.

SPECIAL TESTS AND PROVISIONS Federal Agency: Department of Agriculture Federal Program or Cluster: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, and 10.559 Federal Award Numbers and Years: Award Periods 7/1/2021-6/30/2022: K241 Questioned Costs: $0 Condition: The School's food service account balance exceeded the allowable average three months of operating expenses at June 30, 2022. Criteria: The USDA requires that the ending balance of the nonprofit school food service account does not exceed three months’ average of operating expenses. If an excess fund balance should occur, the SFA will be required to develop a spending plan for reducing the balance to an acceptable level during the following school year. The plan must be submitted to the Indiana Department of Education ("IDOE"), School Finance Division, prior to approval of the Annual Financial Report ("AFR"). Cause: During the 2021 fiscal year, the School’s revenues exceeded expenditures, such that, when added to the opening fund balance, the final fund balance caused the fund to be in noncompliance. Effect: The School's AFR could not be approved until a spending plan was provided to the IDOE. Recommendation: Management of the School should implement a review process that includes reviewing its food service account regularly to avoid excess cash balances. Identification of repeat findings: This finding is a repeat finding previously included as finding number 2021-012 in the audit of the financial statements for the year ended June 30, 2021. View of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has established a monthly meeting between the Business Manager and the Cafeteria Director in order to review the monthly budget and allocate all appropriate expenses in a timely manner. The Business Manager has implemented these changes. The School represents that this was completed during the fiscal year ended June 30, 2023, however, a single audit has not been conducted for this period.

Management agrees with the finding and has established a monthly meeting between the Business Manager and the Cafeteria Director in order to review the monthly budget and allocate all appropriate expenses in a timely fashion. The Business Manager has implemented these accounting changes. This process was completed in October of 2022.

2021-012

MATERIAL WEAKNESS 2021-010 INTERNAL CONTROLS OVER COMPLIANCE REQUIREMENTS Federal Agency: Department of Agriculture Federal Program or Cluster: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, and 10.579 Federal Award Numbers and Years Award Periods 10/1/2019-9/30/20, 10/1/20-9/30/21: K241 Condition: The School's accounting and procedures manual did not include written policies or procedures that address all applicable compliance areas under the Uniform Guidance, including eligibility and reporting. Criteria: The School must establish and maintain effective internal controls over federal awards that provide reasonable assurance that the non-federal entity is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Cause: The School did not document internal controls over federal awards in accordance with the Uniform Guidance. Effect: The absence of documented policies and procedures could result in noncompliance with the terms of federal awards. Recommendation: The School should document and adhere to written policies and procedures that reflect current OMB requirements under the Uniform Guidance. This accounting and procedures manual should be monitored and revised annually as necessary. Identification of repeat findings: This is not a repeat finding. View of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and will work to develop a set of policies and document them. The Business Manager will be responsible for preparing this documentation and changes will be implemented by June 30, 2023

MATERIAL WEAKNESS 2020-010 INTERNAL CONTROLS OVER COMPLIANCE REQUIREMENTS ? ALN No. 10.553, 10.555, 10.556, 10.559, and 10.579 Recommendation: The School should document and adhere to written policies and procedures that reflect current OMB requirements under the Uniform Guidance. This accounting and procedures manual should be monitored and revised annually as necessary. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and will work to develop a set of policies and document them. The Business Manager will be responsible for preparing this documentation and changes will be implemented by 6/30/2023.

MATERIAL WEAKNESS AND NONCOMPLIANCE WITH LAWS AND REGULATIONS 2021-011 SPECIAL TESTS AND PROVISIONS Federal Agency: Department of Agriculture Federal Program or Cluster: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, and 10.579 Federal Award Numbers and Years Award Periods 10/1/2019-9/30/20, 10/1/20-9/30/21: K241 Condition: The School did not properly track the food service program funds separately, including the receipt of reimbursements or the disbursements for the benefit of the school food service. Criteria: A School Food Authority ("SFA") is required to account for all revenues and expenditures of its nonprofit school food service in accordance with state requirements. A SFA must operate its food services on a nonprofit basis; all revenue generated by the school food service must be used to operate and improve its food services (7 CFR sections 210.14(a), 210.14(c), 210.19(a)(2), 215.7(d)(1), 220.2, and 220.7(e)(1)(i)). Cause: The School has not designed, implemented, or maintained internal controls over the federal award that properly track the food service activity. Effect: Federal funds could be used for activities other than those associated with the School's food program. Recommendation: The School must establish and maintain effective internal controls over federal awards that provide reasonable assurance that the School is in compliance with federal statutes, regulations, and the terms and conditions of the federal award, including maintaining records to track all food service program activity separately from all other school activities. Identification of repeat findings: This is not a repeat finding. View of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and will keep all expenditures and reimbursements segregated into one bank account for the food service program. The Business Manager will be responsible for implementing the accounting changes. This will be accomplished by June 30, 2023.

MATERIAL WEAKNESS AND NONCOMPLIANCE WITH LAWS AND REGULATIONS 2021-011 SPECIAL TESTS AND PROVISIONS - Child Nutrition Cluster ?ALN No. 10.553, 10.555, 10.556, 10.559 and 10.579 Recommendation: The School must establish and maintain effective internal controls over federal awards that provide reasonable assurance that the School is in compliance with federal statutes, regulations, and the terms and conditions of the federal award, including maintaining records to track all food service program activity separately from all other school activities. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and will keep all expenditures and reimbursements segregated into one bank account for the food service program. The Business Manager will be responsible for implementing the accounting changes. This will be accomplished by 6/30/2023.

MATERIAL WEAKNESS AND NONCOMPLIANCE WITH LAWS AND REGULATIONS 2021-012 SPECIAL TESTS AND PROVISIONS Federal Agency: Department of Agriculture Federal Program or Cluster: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, and 10.579 Federal Award Numbers and Years Award Periods 10/1/2019-9/30/20, 10/1/20-9/30/21: K241 Condition: The School's food service account balance exceeded the allowable average three months of operating expenses at June 30, 2021. Criteria: The USDA requires that the ending balance of the nonprofit school food service account does not exceed three months? average of operating expenses. If an excess fund balance should occur, the SFA will be required to develop a spending plan for reducing the balance to an acceptable level during the following school year. The plan must be submitted to the Indiana Department of Education ("IDOE"), School Finance Division, prior to approval of the Annual Financial Report ("AFR"). Cause: During the 2021 fiscal year, the School?s revenues exceeded expenditures, such that, when added to the opening fund balance, the final fund balance caused the fund to be in noncompliance. Effect: The School's AFR could not be approved until a spending plan was provided to the IDOE. Recommendation: Management of the School should implement a review process that includes reviewing its food service account regularly to avoid excess cash balances. Identification of repeat findings: This is not a repeat finding. View of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and will establish a monthly meeting between the Business Manager and the Cafeteria Director in order to review the monthly budget and allocate all appropriate expenses in a timely fashion. The Business Manager will be responsible for implementing the accounting changes. This will be accomplished by December 31, 2022.

MATERIAL WEAKNESS AND NONCOMPLIANCE WITH LAWS AND REGULATIONS 2021-012 SPECIAL TESTS AND PROVISIONS - Child Nutrition Cluster ?ALN No. 10.553, 10.555, 10.556, 10.559 and 10.579 Recommendation: Management of the School should implement a review process that includes reviewing its food service account regularly to avoid excess cash balances. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and will establish a monthly meeting between the Business Manager and the Cafeteria Director in order to review the monthly budget and allocate all appropriate expenses in a timely fashion. The Business Manager will be responsible for implementing the accounting changes. This will be accomplished by 12/31/2022.

MATERIAL WEAKNESS AND NONCOMPLIANCE WITH LAWS AND REGULATIONS 2021-014 SPECIAL TESTS AND PROVISIONS Federal Agency: Department of Agriculture Federal Program or Cluster: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, and 10.579 Federal Award Numbers and Years Award Periods 10/1/2019-9/30/20, 10/1/20-9/30/21: K241 Condition: The cash balance on the Statement of Financial Position at June 30, 2021 is less than the reported cash balance in the food service program fund on the School's AFR submitted to the IDOE. Criteria: The School must maintain cash on hand in excess of the amount reported on the AFR. Cause: The School does not track the school food service program separately in its general ledger. The Business Manager has not compared the balance required to be maintained for the School's food program to the amount of cash on hand at any given point in time. Effect: The School has effectively borrowed federal funds to support the School's operations. Recommendation: Management should oversee the Business Manager's periodic review of the School?s food service account in relation to the School's overall cash balance. The School should maintain an overall cash balance sufficient to include the School's food service account balance. Identification of repeat findings: This is not a repeat finding. View of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and will establish a review process that ensures that regulations are followed. The Business Manager will be responsible for implementing the accounting changes and will be overseen by the Principal and Finance committees. This will be accomplished by June 30, 2023.

NONCOMPLIANCE WITH LAWS AND REGULATIONS 2021-014 SPECIAL TESTS AND PROVISIONS Recommendation: Management should oversee the Director of Finance's periodic review of the School?s food service account in relation to the School's overall cash balance. The School should maintain an overall cash balance sufficient to include the School's food service account balance. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and will establish a review process that ensures that regulations are followed. The Business Manager will be responsible for implementing the accounting changes and will be overseen by the Principal and Finance committees. This will be accomplished by 6/30/2023.