audit_findings: 44

This data as json

rowid	source	report_number	finding_number	muni_id	state	entity_name	entity_type	entity_ext_id	place_geoid	match_method	auditor	report_title	audit_type	fiscal_year	period_start	period_end	published_date	finding_category	severity	questioned_cost	cost_basis	finding_title	finding_text	report_url	fetched_at
44	wa-sao	1021378	2017-001		WA	Nine Mile Falls School District No 325/179	School District	2043		no_match	Washington State Auditor's Office	Financial and Federal audit — Nine Mile Falls School District No 325/179	Financial and Federal	2017	2016-09-01	2017-08-31	2018-05-21	federal_award_compliance	material_weakness	0.0	Questioned Cost Amount: $0	The District did not have adequate internal controls to ensure compliance with verification requirements. CFDA Number and Title: 10.553 School Breakfast Program 10.555 National School Lunch Program Federal Grantor Name: U.S. Department of Agriculture Federal Award/Contract Number: NA Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: NA Que	Background The District participates in the School Breakfast and National School Lunch programs, and received $228,873 for them during fiscal year 2017. These programs provide funding for free and reduced-price meals for low-income students. Families must meet income guidelines to be eligible for these programs. Each year, districts must select a sample of applications and verify that family income information reported to the District is correct. The Office of Superintendent of Public Instruction (OSPI) instructs school districts on how to verify program eligibility, including the number of applications that must be verified based on their nonresponse rates from the previous school year’s verifications. The verification process must be completed by November 15 of each year. The District was required to use a 3 percent focused sampling method, because the District’s nonresponse rate exceeded 20 percent during the 2015-2016 school year’s verification process. This sampling method require d the District to select three “error prone” applications for verification. An error-prone application is defined as one where the reported monthly household income falls within $100 of the upper income limit for free or reduced-priced meal eligibility. Washington State Auditor's Office ___________________________________________________________________________________________________________________ Districts must verify income support for the time period from the month before it received the application through the month it verifies the income reported on the application. If the verification process results in a reduction or termination of meal benefits, the District must send a letter of adverse a ction to notify the family at least 10 days before the change takes effect. Also, the District must change the benefit status immediately after this 10-day advance notice period. Description of Condition Although the District did have a process in place t o perform the verification process, internal controls were not effective to ensure the District performed the verification steps accurately and in compliance with federal requirements. We consider this control deficiency to be a material weaknesses. This issue was not reported as a finding in the prior audit. Cause of Condition The District had a basic understanding of the verification process but was not aware it needed to use a different sampling method due to the change in the non-response rate it experi enced in the prior year. The District also was not aware of OSPI’s guidelines for the support it needed to obtain to verify the reported household incomes. Because the District thought the household was eligible, it did not send the letter of adverse actio n informing the household that benefits were being terminated. Effect of Condition and Questioned Costs A lack of proper internal controls over the verification process increases the risk that free or reduced-price meals could be provided to children who were not eligible to receive them. Our audit found the District:  Used the wrong sampling method and selected an insufficient number of applications to verify  Did not obtain proper income verification documentation for one student and overclaimed meals by $242  Did not inform a household it was no longer eligible to participate in the program within the 10-day period required by the program. This caused the District to report incorrect response rate information to OSPI, which could Washington State Auditor's Office ___________________________________________________________________________________________________________________ affect the number of applications the District will need to verify during the next fiscal year. Recommendation s We recommend that the District:  Train employees responsible for the verification requirements to ensure compliance with OSPI and U.S. Department of Agriculture regulations and guidance  Review its verification process to ensure its verifications follow OSPI guidelines District ’s Response To ensure that this doesn’t occur in the future, the Director of Business will annually audit the accuracy of the program eligibility review by analyzing the following:  The Sampling Method – The sampling method will be reviewed ensuring that the correct method was selected based on federal guidelines.  The Review Process – the analysis of the error prone applications will be thoroughly audited looking for timely household income support, for wage verification that is clearly identifiable, and proper handling of benefit status change when applicable. In addition, the Director of Business will ensure that the Food Service Director has the adequate training needed to properly adhere to USDA and/or OSPI regulations in regards to verification requirements. Auditor’s Remarks We thank District management and staff for their assistance during the audit. We will follow up on the status of the issue during our next scheduled audit. Applicable Laws and Regulations The American Institute of Certified Public Acco untants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, paragraph 11. Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Princip les, and Audit Requirements for Federal Awards (Uniform Guidance) section 516 – Audit Findings, establishes reporting requirements for audit findings. Washington State Auditor's Office ___________________________________________________________________________________________________________________ Title 2 CFR Part 200, Uniform Guidance, section 303 – Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. Title 7 CFR Part 245, Determining Eligibility for Free and Reduced Price Meals and Free Milk in Schools , Section 6a – Verification requirements, esta blishes requirements for verifying eligibility of children for free and reduced price meal benefits. Washington State Auditor's Office ___________________________________________________________________________________________________________________	https://portal.sao.wa.gov/ReportSearch/Home/ViewReportFile?arn=1021378&isFinding=false&sp=false	2026-07-30 13:24:54