MUNSTER — State auditors raised concerns of oversight in child nutrition and special education accounts in the School Town of Munster in a routine audit report published last month by the Indiana State Board of Accounts.
In the report summarizing the state’s audit of the period July 1, 2016, to June 30, 2018, auditors drew attention to the district’s cash management, property procurement and more as it relates to federally funded school breakfast and lunch programs.
The audit report listed multiple instances in which the district either did not establish proper oversight having only one employee signing off on receipts and balance, or spent money from school nutrition accounts without first seeking the proper federal approvals.
In one instance, according to the audit, the school town purchased $426,722 worth of kitchen equipment without proper federal approval.
In another instance, the audit found Munster signed off on a $338,516 food service operations expansion in three parts circumventing bidding procedures required for projects greater than $150,000.
The district also failed in some occasions to follow small-purchases procedures in its child nutrition program requiring a minimum number of price or rate quotes for purchases of more than $3,500. These procedures applied to Munster’s partnerships with 24 vendors for a total $668,074 of disbursements during the audit period, according to the report.
The school town’s response was included in the state’s 83-page report filed March 21.
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In it, the district noted that employees responsible for implementing changes found necessary in a prior audit have since retired or left the school. The school town hired a new corporation treasurer and director of financial operations who began with the district on Nov. 1, 2018.
Munster also noted its recent change in food service providers. Beginning this school year, the district has contracted with Chartwells K12, a national K-12 food services brand, which will, according to Munster’s report, assist in future oversight of financial reports.
“We are more than willing to take on the responsibility and will be accountable in resolving and correcting the issues that were identified,” school town officials said in an official response provided to the state in February.
In its response, Munster also put forward a corrective action plan detailing efforts under the district’s new corporation treasurer and director of financial operations to cross-check receipts, disbursements and other financial reports with multiple district employees or Chartwells staff where appropriate.
The school town said purchases detailed in the report were made before new staff and contracts were in place, but that district employees would follow federal regulations moving forward and would remind Chartwells and Munster’s head of maintenance that purchases above $5,000 using federal funds must first be approved by the Indiana Department of Education.
The report also drew attention to a formula error made in calculating special education expenditures resulting in a total $20,577 reported less than required to meet earmarking requirements and a total $24,441 overstated expenditures in quarterly reports submitted to the IDOE.
Munster currently partners with the Lake Central School Corp. to run the two districts’ West Lake Special Education Cooperative, which will end June 30. Munster, in its response, said it will work with Lake Central to take a more active role in reviewing the reports through August 2019 when the cooperative ends its payroll.