United States Department of Agriculture FAV—Healthy Hunger Free Kids Act of 2010—Controls over Food Service Account Revenue Report 27026-0001-24 February 2020 OFFICE OF INSPECTOR GENERAL United States Department of Agriculture Office of Inspector General Washington, D.C. 20250 DATE: February 12, 2020 NUMBER: 27026-0001-24 TO: Stanley McMichael Associate Chief Financial Officer Office of the Chief Financial Officer FROM: Gil H. Harden Assistant Inspector General for Audit SUBJECT: FAV—Healthy Hunger-Free Kids Act of 2010—Controls over Food Service Account Revenue The Office of Inspector General (OIG) completed a final action verification (FAV) of all four recommendations in our September 28, 2015 report, Healthy Hunger-Free Kids Act of 2010— Controls over Food Service Account Revenue (Audit Report 27601-0001-22). An FAV determines whether the final action documentation the agency provided to the Office of the Chief Financial Officer (OCFO) supports the agency’s management decision reached with OIG.1, 2 Our objective was to determine whether the documentation the Food and Nutrition Service (FNS) provided to OCFO was sufficient to close the recommendations made in Audit Report 27601-0001-22. In a memorandum dated July 5, 2018, OCFO reported to FNS that it closed all of the recommendations, and we concur with this decision. 1 “Final action is the completion of all actions that management has concluded, in its management decision, are necessary with respect to the finding and recommendations included in an audit report.” USDA OCFO, DR1720- 001, 6g(1), Audit Follow-up and Management Decision (Nov. 2, 2011). 2 “Management decision is an agreement between agency management and OIG on the action(s) taken or to be taken to address a finding and recommendations cited in an audit report. The management decision must include the agreed-upon dollar amount affecting the recommendations and an estimated completion date unless all corrective action is completed by the time agreement is reached.” USDA OCFO, DR1720-001, Audit Follow-up and Management Decision, 6i, (Nov. 2, 2011). Stanley McMichael 2 Background Our report, Healthy Hunger-Free Kids Act of 2010—Controls over Food Service Account Revenue,3 made four recommendations to provide reasonable assurance that school food authorities (SFA) complied with the paid lunch equity and nonprogram foods revenue requirements (Sections 205 and 206) of the Healthy, Hunger-Free Kids Act of 2010. In addition, FNS needed to supply SFAs with updated guidance regarding indirect costs and needed to establish a date for publishing the annual paid lunch price report. OIG and FNS reached management decision on all four recommendations on September 28, 2015. A memorandum, dated September 30, 2015, detailed what FNS needed to implement in order to achieve final action on all recommendations. In accordance with Departmental Regulation 1720-001,4 OCFO has the responsibility to determine final action for recommendations where OIG has agreed to management decision. As such, OCFO evaluates agency-provided documentation to support planned corrective actions and to determine if final action has occurred. Scope and Methodology The scope of this final action verification was limited to determining whether FNS’ plan of action for all of the recommendations in the subject report was completed in accordance with the management decisions reached on September 28, 2015. To accomplish our objective, we reviewed documentation FNS submitted to OCFO. We did not perform internal control testing or make site visits to determine whether the underlying deficiencies that were initially identified had been corrected. In addition, we did not provide an opinion on the results of the implementation or effectiveness of each recommendation. This FAV was conducted in accordance with our internal guidance IG-7710, Nonaudit Work and Final Action Verification Guidance and Procedures. As a result, this FAV was not conducted in accordance with Generally Accepted Government Auditing Standards, issued by the Comptroller General of the United States or the Quality Standards for Inspection and Evaluation, issued by the Council of the Inspectors General for Integrity and Efficiency. However, before we performed the nonaudit service, we determined that it would not impair our independence to perform audits, inspections, attestation engagements, or any other future or ongoing reviews of the subject. Results of the Final Action Verification We determined that FNS provided sufficient documentation to OCFO to close the four recommendations we made in our September 2015 audit report, Healthy Hunger-Free Kids Act of 2010—Controls over Food Service Account Revenue. The table summarizes the action FNS took with respect to each recommendation. We informed FNS officials of the results of this final action verification. 3 Audit Report 27601-0001-22, Healthy Hunger-Free Kids Act of 2010—Controls over Food Service Account Revenue, Sept. 2015. 4 USDA OCFO, DR 1720-001, 7d (1-9), Audit Follow-up and Management Decision (Nov 2, 2011). Stanley McMichael 3 Table 1. FNS’ Implemented Corrective Actions Sufficient to Achieve Final Action Rec. Recommendation Action Taken No. FNS provided the revised Resource Redesign controls to provide reasonable Management Risk Indicator tool for assurance that SFAs comply with paid identifying whether SFAs have properly lunch equity and nonprogram food revenue used the PLE and NFR tools. On requirements. At a minimum, FNS should July 29, 2016, FNS published the revise the Resource Management Risk Administrative Reviews in the School 1 Indicator Tool to include sufficient detail Nutrition Program Final Rule, which for identifying whether SFAs have outlines changes that are expected to properly used the Paid Lunch Equity (PLE) strengthen program integrity through a and Nonprogram Food Revenue (NFR) more robust, effective, and transparent tools. process for monitoring school nutrition program operations. FNS announced a permanent change to the reporting due date for the School Establish a date for publishing the annual Food Authority Paid Lunch Report. 2 paid lunch price report. These reports are now due to FNS on the last operating day of January during the school year. FNS issued policy memo SP 10-2016 FNS-828 Paid Lunch Price-Report: New Submission Date and Reporting Develop and implement controls to ensure Template, on November 16, 2015. This 3 the paid lunch price reports are complete memorandum announced the permanent and submitted timely by State agencies. change to the reporting due date to facilitate more timely and accurate reporting. FNS issued guidance on indirect costs on Provide updated guidance for indirect costs September 30, 2016, through policy 4 to SFAs. memo SP 60-2016, Indirect Cost Guidance. cc: Director, Office of Internal Controls, Audits and Investigations, FNS Learn more about USDA OIG Visit our website: www.usda.gov/oig Follow us on Twitter: @OIGUSDA Report Suspected Wrongdoing in USDA Programs OIG Hotline: www.usda.gov/oig/hotline.htm Local / Washington, D.C. (202) 690-1622 Outside D.C. 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FAV - Healthy Hunger Free Kids Act of 2010 - Controls over Food Service Account Revenue
Published by the Department of Agriculture, Office of Inspector General on 2020-02-17.
Below is a raw (and likely hideous) rendition of the original report. (PDF)