Table of Contents. Food and Nutrition Services Reimbursable Meals

Transcription

1 Table of Contents Food and Nutrition Services Reimbursable Meals August 2015 Page Number BACKGROUND 2 OBJECTIVE 2 SCOPE AND METHODOLOGY 2 COMMENDATION 2 FINDINGS AND RECOMMENDATIONS 3-4 1

2 BACKGROUND The National School Lunch Program and School Breakfast Program are federal programs designed to provide students, who may otherwise go hungry or not receive a nutritious meal at home, with a nutritious meal or meals. The underlying premise is: if a child is hungry, then the child will not learn. These federal programs are administered by the U.S. Department of Agriculture and administered by the state via the Florida Department of Agriculture, who then oversees it at the School District level. At OCPS, the programs are administered by the department of Food and Nutrition Services. OBJECTIVE Our audit objectives were to review certain operational processes and procedures of the Food and Nutrition Services Reimbursable Meals program for efficiency and effectiveness and to determine compliance with Florida statutes, School Board Policies and sound business practices. SCOPE AND METHODOLOGY Our audit covered meal transactions and reimbursements during the period from July 1, 2014 through June 30, Our audit was conducted in accordance with the International Standards for the Professional Practice of Internal Auditing of the Institute of Internal Auditors and included such procedures as deemed necessary to achieve the objectives. Internal Auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. We are required to note any material deficiencies in accordance with Florida Statutes, School Board Policy and sound business practices. We also offer suggestions to improve controls or operational efficiency and effectiveness. We selected a sample of 200 students from the student population as of December 17, The active population of students at that date was 197,894. The random sample was selected using the IDEA application. Any withdrawn student selected in the initial sample was replaced with an active one. The MCS Franklin system was used to ascertain for which meal benefit category the student qualified, either free, reduced, or paid. The MCS Newton system was used to ascertain if the sample student purchased a meal, either breakfast or lunch, for the specific day, December 17, Reports from the MCS Newton system were compared to total meals served, to the December reimbursement claim submitted to the State of Florida, and to SAP ZF434 reports. We also observed food service activities in a small sample of school cafeterias at breakfast and at lunch. COMMENDATON The Food and Nutrition Services department serves around 2,500,000 meals and snacks to OCPS students via the National School Lunch Program each month. A small, dedicated staff within that department processes the Free and Reduced meal applications, determines student meal eligibility, checks daily and weekly cafeteria counts with Cafeteria Managers, and submits the meal reimbursement claim containing up to 28,000 data accumulations to the state of Florida 2

3 each month. This is performed across an organization with: 1) varying types of schools; 2) varying meal programs each with their own set of rules; and 3) varying point of sale collections. Thanks to their diligence in verifying and checking data, we noted a high degree of accuracy in the reimbursement claims we tested in our audit. FINDINGS AND RECOMMENDATIONS Student Misclassified for Five Months In order to confirm that the correct meal benefit status was assigned, we reviewed the paper applications and the data for the online applications at the web site ApplyForLunch.com. We used the formula listed in the Federal Register/Vol. 79, No. 43 / Wed., March 5, 2014 / Notices, pp. 12, to calculate the appropriate benefit amount. One of the sample students was incorrectly classified as qualified for a free meal benefit for five months, before FNS corrected it. The student was eligible for reduced price meals and that classification category should have been used. Recommendation: Establish a procedure that will detect/prevent these misclassifications in a timelier manner. No Backup for Student Receiving Free Meal Benefits There was no supporting documentation for one student being classified as eligible for free meal benefits. The student was listed as a homeless student, but the Title I Services Department did not have any record of that student being reported as homeless. Recommendation: Recommend that controls be in place to ensure that there is adequate justification for the status assigned to a student, and any changes to a student s status should have adequate authorization. Missing Application In our sample of 200 students, 20 of the students submitted paper applications for the Meal Benefit program. One of the paper applications could not be found so we could not perform any testing on that application. Recommendation: We recommend that all paper applications be retained. OCPS Book of Record Does Not Match 2014 December Reimbursement Claim The 2014 December Reimbursement Claim filed with the State of Florida had three schools with meal counts that differed from the SAP ZF434 report. The SAP ZF434 report shows what was posted to SAP for types of meal served and should agree with the monthly claim. (Both have the same source data.) The exceptions for two of the schools are as follows: Breakfast Lunch School Report Free Reduced Paid Free Reduced Paid Dec Grand Ave Primary Learning Center Claims Reimb

4 Grand Ave Primary Learning Center Shingle Creek ES Shingle Creek ES SAP ZF434 Dec Claims Reimb SAP ZF For Grand Avenue Primary Learning Center, the free and paid amounts were transposed. For Shingle Creek Elementary School, the total for breakfast is correct but the lunch percentages were used to pro-rate the meals as a Provision 2 school instead of the breakfast percentages. For the third school, Catalina Elementary School, see the next section. Incorrect Meal Count Reported for a School The 2014 December Reimbursement Claim filed with the State of Florida reported the incorrect meal counts for one school resulting in an underpayment as noted below: Breakfast Free Reduced Paid Total Meal Counts Reported to State Should Have Reported 4, Difference 4, Reimbursement Rate $1.62 $1.32 $0.28 Dollar Amount $6, $0.00 $19.60 $6, This amounts to a 0.12% error rate ($6, / $5,463,918.68). The FNS Finance Manager stated that she saw the error and tried to correct in FANS web site but could not. We wish to thank the staff of the Food and Nutrition Services, Pupil Assignment, Title I, and Finance departments for their cooperation and assistance during the audit. Jan Skjersaa, CPA, Internal Auditor 4

5 MEMORANDUM Operations Food & Nutrition Services Date: December 1, 2015 To: From: Michael Eugene, Chief Operations Officer Linda Lindsey, Auditor Lora Gilbert, Director, Food & Nutrition Services Subject: Response to OCPS Audit July1, 2014 June 30, 2015 Finding: Student Misclassified for Five Months Recommendation: Set up a procedure that will detect/prevent these misclassifications in a timelier manner. FNS Response: The procedures for calls to parents will be logged in and corrections listed in both the call log and included as documentation in the application data base. Finding: No Backup for Student Receiving Free Meal Benefits Recommendation: Recommend that controls be in place to ensure that there is adequate justification for the status assigned to a student, and any changes to a student s status should have adequate authorization. FNS Corrective Action and Plan: For this student their status was approved as free under the Homeless Category from the school s approval authority. As a result the FNS department has changed the procedure to only accept the approved list from the District Homeless Department. Finding: Missing Application, one paper application could not be found Recommendation: We recommend that all paper applications be retained. FNS Corrective Action Plan: FNS changed the internal process to keep all supporting documentation electronically. All applications keyed in by the FNS staff received from September to current date are being scanned in and attached to the student s account. Finding: OCPS Book of Record Does Not Match 2014 December Reimbursement Claim FNS Corrective Action Plan: FNS will change the process of the Reimbursement Claim to a two-step process. The calculation and development of the meal claims process is assigned to the Sr. Finance/Payroll Specialist and the FNS Business Manager or Sr. Finance Administrator will complete a second verification prior to submitting the Reimbursement Claim.