De Soto School District #73Local Government

2019-001 Federal Grantor: U.S. Department of Agriculture Other Pass-Through Grantor: Missouri Department of Elementary and Secondary Education Significant Deficiency Federal CFDA Number: 10.553, 10.555, 10.559 Program Title: Child Nutrition Cluster Information on the federal programs: The District is responsible for compliance with requirements of the Schedule of Expenditures of Federal Awards. Criteria: Management is responsible for compliance with internal control requirements of the District?s Schedule of Expenditures of Federal Awards. Condition: The District contracted out its food service to a company in which an employee of the contracted company is alleged to have misappropriated less than $200 of students? lunch money. Questioned Costs: Not applicable Context: Prior to the audit, we were notified by the District of concerns that an employee of its contracted food service company misappropriated students? lunch money. Effect: No controls over monitoring, as required by Governmental Accounting and Financial Reporting Standards. Cause: Adequate emphasis was not placed on the monitoring of its employees and procedures by the contracted company and the District in its oversight of the contracted company. Recommendation: We recommend that the District implement procedures to ensure that it is monitoring contracted services and implement additional internal controls over the collection of student lunch money. Views of Responsible Officials and Planned Corrective Actions: The district contracts with a vendor to provide food services in all of its schools. Services provided include meal preparation and the collection and management of payments received for meals. The district previously relied on this vendor to have appropriate controls in place to ensure student meal monies are recorded and deposited. In accordance with Board Policy 3106, district officials took immediate actions to investigate irregularities in this process when notified as well as hired a forensic audit to be completed. The district has taken proactive steps in instituting internal controls and oversight in how student meal monies are recorded and deposited. The district has established a procedure in which each building secretary along with one administrative food service employee go together to get lunch monies deposited in a locked box, count each, deposit together, and log each deposit on a daily deposit sheet. The log sheet along with the deposit is also checked by our bookkeeper against the daily deposits on our bank statements to identify any deposit discrepancies. Students are also no longer allowed to deposit money by giving the funds to a teacher or food service worker, as all money must be deposited in locked lunch deposit boxes in all buildings throughout the district.

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