School Nutrition Program of the Archdiocese of Los Angeles Education and Welfare CorporationNon-Profit

Criteria: Federal regulations require that documentation to support student eligibility determinations are maintained by the entity. -7 CFR §245.6(b)(6) requires documentation to be retained for three years after the end of the fiscal year to which they pertain; and -2 CFR §200.302 and §200.333 (record‑keeping requirements) require entities to maintain sufficient records that support federal program compliance and allow for audit review. Condition: During our eligibility testing, SNP was unable to provide supporting eligibility documentation for six of our 40 eligibility samples. Missing items included applications or direct certification documentation. Questioned Costs: $2,085. Context: SNP was unable to provide documentation to support eligibility determinations for six students. Cause: Oversight by the SNP. Effect: We could not verify eligibility determinations for six students. Repeat Finding: No. Recommendation: We recommend the SNP reviews its internal controls and policies to ensure all students receiving benefits have an application, or other supporting documentation, on file to support their eligibility. Views of Responsible Officials: Management concurs with the finding.

Federal Program Title: U.S. Department of Agriculture (USDA) Passed through the State of California Department of Education 10.553/10.555 Child Nutrition Cluster Award: A1960Z 7/1/22-6/30/23 Finding 2023-001—Verification Population Criteria or specific requirements Section III, P. of the grant agreement from the California Department of Education Nutrition Services Division Permanent Single Agreement, states that verification must be completed on Household meals Benefit Applications as specified by Child Nutrition Program (CNP) regulations and guidance. Local Education Agency (LEA) must select the sample by the lesser of 3% or 3000 of the approved applications on file as of October 1, selected from error prone applications. Condition While gaining our understanding of controls over verification, management noted that they rely on their internal software, Paradox, to tally the number of applications on file as of October 1, as well as any reports considered error prone. The system does not print out a report to list out all applications and management was unable to reproduce any report to show the total number of applications to agree to the tallied applications from the Paradox system as of October 1. The Paradox system is based on the application entered into the system by the SNP Personnel. Cause Management has become reliant on its system to perform controls. Effect or potential effect The wrong number of students could be verified resulting in noncompliance. Questioned costs None. Context Although we were able to see that management did perform a verification sample, we could not get comfortable with the number of approved applications on file as of October 1 and, therefore, could not determine if management tested the required number of applications. Repeat finding No. Recommendation We recommend that SNP maintain a report of all applications from the Paradox system as of October 1 and review to ensure they have a complete population to perform their verification test. Views of Responsible Officials Management agrees with the finding. See corrective action plan.

2020-001?Cash Management and Federal Grant Revenue Controls Criteria The 2 CFR section 200.303 requires that non-federal entities receiving federal awards to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition While gaining our understanding of controls over cash management and recording of federal grant revenue on the financial statements, management noted that the control they had in place to provide reasonable assurance that they are complying with cash management requirements is that monthly reimbursement requests are prepared by the Program Manager in the Department of Education?s portal based on a summary report submitted in their Paradox system and reviewed prior to submission by the Program Director. However, upon testing of this control, we noted there were checkmarks made on the summary report but the level of precision of the review, who performed the control and the date the review was performed could not be determined. Cause Management was unaware that they had to maintain documented controls related to their federal programs. Effect Amounts could be submitted for reimbursement that have not occurred or that are inaccurate. In addition, turnover of program personnel could occur and there would not be a trail for where the control was left off or how it was performed, thus potentially causing the risk that non-compliance could occur. Questioned Costs None. Recommendation We recommend that a draft of the monthly reimbursement request be printed by the Program Manager after she prepares it in the portal and it be forward to the Program Director with the supporting school summary report for her review. We recommend that the Program Director develop a listing that could be maintained with these reports that documents what they verified as part of their review and that is signed and dated by both the preparer and reviewer as evidence of their review. Views of Responsible Officials We understand that there is a need to certify the review of claim documents prior to submission and also provide written authorization for the submission of the claim to the state of California. The certification document will provide a signature of the program manager to indicate that the report and site claims are finalized. The Program Director will review the documents and sign the certification to verify that the site claims reconcile with the monthly aggregate report and are authorized for submission to the state of California.

2020-002?Eligibility Controls Criteria The 2 CFR section 200.303 requires that non-federal entities receiving federal awards to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition While gaining our understanding of controls over eligibility, management noted that the control they had in place to provide reasonable assurance that they are complying with eligibility requirements is that student applications are reviewed by a field representative for completeness and accuracy prior to the information being input into the Paradox System. We noted that eligibility is not determined by Program personal based on review of the application but is identified in the Paradox System based on configuration controls in the system and the information input from the student?s application. We noted that the SNP does not do any sample testing of the outputs of the data from the system against the applications to ensure that its system is configured correctly and that data was properly inputted. Cause We noted that the SNP has become reliant on its system to perform controls. Effect Students that do not meet eligibility requirements could be provided free meals. Questioned Costs None. Recommendation We recommend that the SNP select a sample of its applications at the beginning of the school year to test that the data on the Paradox eligibility report agrees to the application and then compare the student?s family?s income as listed on the eligibility report to federal income guidelines to determine if the system made the correct eligibility determination. We recommend that the SNP maintain the documentation used to perform this sample as evidence of this review. Views of Responsible Officials We understand that there is a need to perform a sample testing of the eligibility determinations made by the paradox system against the published income eligibility guidelines to ensure that the eligibility determinations being assigned by Paradox are correct and so ensuring that the system is configured to correctly determine eligibility. The Program Director will make a selection of applications received during the month of August. The selected applications will be subject to a manual review using federal income eligibility guidelines and a record will be made to indicate the results. A written record of this edit check will be maintained with the program records.

2020-003?Verification Controls Criteria The 2 CFR section 200.303 requires that non-federal entities receiving federal awards to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition While gaining our understanding of controls over verification, management noted that the control it had in place to provide reasonable assurance it is are complying with the 3% verification requirement was the preparation of the Student Food Authority Report provided off the Department of Education?s website. While we noted that this is prepared by the Director of Externally Funded Programs, we noted that this report is not reviewed by someone other than the preparer and the data on this report is not verified by someone other than the preparer to the Paradox system. Cause Management was unaware that it had to maintain documented controls related to its federal programs. Effect The wrong number of students could be verified resulting in noncompliance. Questioned Costs None. Recommendation We recommend that the SNP have the Program Manager reconcile amounts in the School Food Authority Report against information in the Paradox system to determine if the correct amount of applications were chosen to verify. Views of Responsible Officials We understand that there is a need to verify that the calculation of the number of applications selected is correct. The Program Director will provide the worksheet to the Program Manager to verify that the correct number of applications have been selected.