CHIPPEWA VALLEY SCHOOLSLocal Government

Assistance Listing Number, Federal Agency, and Program Name - 10.553 and 10.555, U.S. Department of Agriculture, Child Nutrition Cluster Federal Award Identification Number and Year - 241960, 251960, 241970, and 251970 Pass through Entity - Michigan Department of Education Finding Type - Significant deficiency Repeat Finding - No Criteria - The School District is required to have processes that comply with applicable procurement rules in the Uniform Guidance, including initial identification of those requirements and subsequent compliance per 2 CFR 200.317 through 200.327, as well as contain required contract provisions for cost reimbursable contracts per the provisions in 7 CFR 210.21(f), 7 CFR 210.21(d)(3), and 7 CFR 220.16(d)(3). Condition The School District's internal controls did not effectively identify all of the required components necessary in formal solicitation documents for food service/cost reimbursable contracts and when using a third party entity (e.g., consortium) and did not utilize competitive procurement methods. Questioned Costs - None If Questioned Costs are Not Determinable, Description of Why Known Questioned Costs Were Undetermined or Otherwise Could Not Be Reported - N/A Identification of How Questioned Costs Were Computed - N/A Context- It was noted that the School District was not required to competitively bid any purchases during fiscal year 2025. Cause and Effect - Conducting solicitations or entering into contracts that do not follow the appropriate competitive procurement guidelines could result in the School District having an unallowable contract under the provisions of the grant and/or questioned costs. Recommendation - The School District should examine its processes and controls surrounding competitive procurement methods for the food service program to verify inclusions of the requirements under the Uniform Guidance. Views of Responsible Officials and Corrective Action Plan - As a result of a rotational School Nutrition Programs Procurement Review, as administered by the Office of School Nutrition Services within the Michigan Department of Education (MDE), general procurement findings were identified in the food service program. To address, the School District is revising its food service procurement documents to explicitly include all required contract provisions under the Uniform Guidance. The School District is also incorporating recent interpretations and guidance from the U.S. Department of Agriculture (USDA), as communicated through MDE, particularly regarding cooperative purchasing and pricing structures for federal compliance. These actions are intended to strengthen the procurement controls to ensure all future food service contracts meet the compliance requirements of the Uniform Guidance and USDA regulations.

Assistance Listing Number, Federal Agency, and Program Name - 10.553 and 10.555, U.S. Department of Agriculture, Child Nutrition Cluster Federal Award Identification Number and Year - 241960, 230910, 240910, and 241970 Pass-through Entity - Michigan Department of Education Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - The School District must submit monthly claims for reimbursement for meals served to eligible students within 60 days following the last day of the month covered by the claim (7 CFR sections 210.8, 220.11, 215.10, and 225.15 (c)). Upon preparation of meal reimbursement claims, the School District is required to have controls in place to ensure the accuracy of the request for reimbursement. Condition - The School District does not currently have a control in place where a review of the meal counts entered into the Michigan Nutrition Data (MiND) system takes place, which could result in incorrect reporting of the number of free and reduced priced meals, which could result in the School District being reimbursed an incorrect amount by the Michigan Department of Education. Questioned Costs - $9,438 Identification of How Questioned Costs Were Computed - The entire population of claims submitted was recalculated by the School District. Context - It was noted that the School District submitted for reimbursement with inaccurate information for seven months during the fiscal year. There were 3,062 overclaimed free breakfast/lunch meals and 2,838 overclaimed reduced breakfast/lunch meals. Cause and Effect - The absence of a secondary review comparing meal data from the School District's meal tracking point of sale system to the inputs into the MiND system resulted in the School District being reimbursed for inaccurate amounts. Recommendation - The School District should implement a control where the monthly reimbursement request is reviewed and approval is documented to ensure the submission is mechanically accurate and that it agrees with the School District’s internal meal claims data report. Views of Responsible Officials and Corrective Action Plan - As a result of errors identified during the audit, the School District’s Business Office performed a detailed review of all meal claim submissions for the 2023/2024 fiscal year. An offsetting amount of underclaimed meal reimbursements was identified which nets against the overclaimed meal reimbursements, resulting in an aggregate underclaim of $2,243.18 when looking at the entire fiscal year in total. Ultimately, the School District did not request funds beyond which it was eligible to claim over the span of the fiscal year. The Business Office has since implemented a formalized internal control procedure for the Food Service Department to adhere, alongside performing a thorough review of the monthly claims reimbursement submission.