Audit 296464

Federal Program Affected Federal Agency: U.S. Department of Agriculture Pass-Through Entity: California Department of Education (CDE) Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555 Compliance Requirement: N (Special Tests and Provisions – Verification of Free and Reduced- Price Applications) Criteria or Specific Requirements Per Title 7, U.S. Code of Federal Regulations, Subtitle B, Chapter II, Subchapter A, Parts 245.6a. The local education agency must verify the current free and reduced-price eligibility of households selected from a sample of applications that it has approved for free and reduced-price meals, by November 15 of each school year. The verification sample size is based on the total number of approved applications on file October 1. Condition The District did not appropriately calculate the number of applications required to be sampled for the verification process by November 15th of the school year. As a result, the District selected fewer applications for verification than was required to meet the three percent requirement. Questioned Costs There were no questioned costs associated with the identified condition. Context The condition was identified through inquiry with District personnel and through review of available supporting documentation. The District was required to select 50 applications for verification. However, due to the calculation error, only 24 applications were selected for verification. Effect The District does not appear to be in compliance with Special Test and Provision requirements for the Child Nutrition Cluster. Cause The cause appears to have been triggered by the change to universal meals, coupled with the increase in qualified CEP sites. Repeat Finding No. Recommendation The District should establish procedures to ensure the verification process is completed timely and the appropriate eligibility changes are made.

Federal Program Affected Federal Agency: U.S. Department of Agriculture Pass-Through Entity: California Department of Education (CDE) Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555 Compliance Requirement: N (Special Tests and Provisions – Verification of Free and Reduced- Price Applications) Criteria or Specific Requirements Per Title 7, U.S. Code of Federal Regulations, Subtitle B, Chapter II, Subchapter A, Parts 245.6a. The local education agency must verify the current free and reduced-price eligibility of households selected from a sample of applications that it has approved for free and reduced-price meals, by November 15 of each school year. The verification sample size is based on the total number of approved applications on file October 1. Condition The District did not appropriately calculate the number of applications required to be sampled for the verification process by November 15th of the school year. As a result, the District selected fewer applications for verification than was required to meet the three percent requirement. Questioned Costs There were no questioned costs associated with the identified condition. Context The condition was identified through inquiry with District personnel and through review of available supporting documentation. The District was required to select 50 applications for verification. However, due to the calculation error, only 24 applications were selected for verification. Effect The District does not appear to be in compliance with Special Test and Provision requirements for the Child Nutrition Cluster. Cause The cause appears to have been triggered by the change to universal meals, coupled with the increase in qualified CEP sites. Repeat Finding No. Recommendation The District should establish procedures to ensure the verification process is completed timely and the appropriate eligibility changes are made.

Federal Program Affected Federal Agency: U.S. Department of Agriculture Pass-Through Entity: California Department of Education (CDE) Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555 Compliance Requirement: N (Special Tests and Provisions – Verification of Free and Reduced- Price Applications) Criteria or Specific Requirements Per Title 7, U.S. Code of Federal Regulations, Subtitle B, Chapter II, Subchapter A, Parts 245.6a. The local education agency must verify the current free and reduced-price eligibility of households selected from a sample of applications that it has approved for free and reduced-price meals, by November 15 of each school year. The verification sample size is based on the total number of approved applications on file October 1. Condition The District did not appropriately calculate the number of applications required to be sampled for the verification process by November 15th of the school year. As a result, the District selected fewer applications for verification than was required to meet the three percent requirement. Questioned Costs There were no questioned costs associated with the identified condition. Context The condition was identified through inquiry with District personnel and through review of available supporting documentation. The District was required to select 50 applications for verification. However, due to the calculation error, only 24 applications were selected for verification. Effect The District does not appear to be in compliance with Special Test and Provision requirements for the Child Nutrition Cluster. Cause The cause appears to have been triggered by the change to universal meals, coupled with the increase in qualified CEP sites. Repeat Finding No. Recommendation The District should establish procedures to ensure the verification process is completed timely and the appropriate eligibility changes are made.

Federal Program Affected Federal Agency: U.S. Department of Agriculture Pass-Through Entity: California Department of Education (CDE) Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555 Compliance Requirement: N (Special Tests and Provisions – Verification of Free and Reduced- Price Applications) Criteria or Specific Requirements Per Title 7, U.S. Code of Federal Regulations, Subtitle B, Chapter II, Subchapter A, Parts 245.6a. The local education agency must verify the current free and reduced-price eligibility of households selected from a sample of applications that it has approved for free and reduced-price meals, by November 15 of each school year. The verification sample size is based on the total number of approved applications on file October 1. Condition The District did not appropriately calculate the number of applications required to be sampled for the verification process by November 15th of the school year. As a result, the District selected fewer applications for verification than was required to meet the three percent requirement. Questioned Costs There were no questioned costs associated with the identified condition. Context The condition was identified through inquiry with District personnel and through review of available supporting documentation. The District was required to select 50 applications for verification. However, due to the calculation error, only 24 applications were selected for verification. Effect The District does not appear to be in compliance with Special Test and Provision requirements for the Child Nutrition Cluster. Cause The cause appears to have been triggered by the change to universal meals, coupled with the increase in qualified CEP sites. Repeat Finding No. Recommendation The District should establish procedures to ensure the verification process is completed timely and the appropriate eligibility changes are made.

Federal Program Affected Federal Agency: U.S. Department of Agriculture Pass-Through Entity: California Department of Education (CDE) Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555 Compliance Requirement: N (Special Tests and Provisions – Verification of Free and Reduced- Price Applications) Criteria or Specific Requirements Per Title 7, U.S. Code of Federal Regulations, Subtitle B, Chapter II, Subchapter A, Parts 245.6a. The local education agency must verify the current free and reduced-price eligibility of households selected from a sample of applications that it has approved for free and reduced-price meals, by November 15 of each school year. The verification sample size is based on the total number of approved applications on file October 1. Condition The District did not appropriately calculate the number of applications required to be sampled for the verification process by November 15th of the school year. As a result, the District selected fewer applications for verification than was required to meet the three percent requirement. Questioned Costs There were no questioned costs associated with the identified condition. Context The condition was identified through inquiry with District personnel and through review of available supporting documentation. The District was required to select 50 applications for verification. However, due to the calculation error, only 24 applications were selected for verification. Effect The District does not appear to be in compliance with Special Test and Provision requirements for the Child Nutrition Cluster. Cause The cause appears to have been triggered by the change to universal meals, coupled with the increase in qualified CEP sites. Repeat Finding No. Recommendation The District should establish procedures to ensure the verification process is completed timely and the appropriate eligibility changes are made.

Federal Program Affected Federal Agency: U.S. Department of Agriculture Pass-Through Entity: California Department of Education (CDE) Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555 Compliance Requirement: N (Special Tests and Provisions – Verification of Free and Reduced- Price Applications) Criteria or Specific Requirements Per Title 7, U.S. Code of Federal Regulations, Subtitle B, Chapter II, Subchapter A, Parts 245.6a. The local education agency must verify the current free and reduced-price eligibility of households selected from a sample of applications that it has approved for free and reduced-price meals, by November 15 of each school year. The verification sample size is based on the total number of approved applications on file October 1. Condition The District did not appropriately calculate the number of applications required to be sampled for the verification process by November 15th of the school year. As a result, the District selected fewer applications for verification than was required to meet the three percent requirement. Questioned Costs There were no questioned costs associated with the identified condition. Context The condition was identified through inquiry with District personnel and through review of available supporting documentation. The District was required to select 50 applications for verification. However, due to the calculation error, only 24 applications were selected for verification. Effect The District does not appear to be in compliance with Special Test and Provision requirements for the Child Nutrition Cluster. Cause The cause appears to have been triggered by the change to universal meals, coupled with the increase in qualified CEP sites. Repeat Finding No. Recommendation The District should establish procedures to ensure the verification process is completed timely and the appropriate eligibility changes are made.

Federal Program Affected Federal Agency: U.S. Department of Agriculture Pass-Through Entity: California Department of Education (CDE) Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555 Compliance Requirement: A/B (Activities Allowed or Unallowed and Allowable Costs/Cost Principles) Criteria or Specific Requirements The United States Department of Education has approved a delegation agreement with the California Department of Education (CDE) that authorizes the CDE to establish indirect cost rates for California local education agencies (LEAs). The CDE has been delegated authority to calculate and approve indirect cost rates annually for LEAs. For the Child Nutrition Cluster in fiscal year 2022-2023, California Education Code Section 38101(c) limits school district indirect costs to the lesser of the District’s individual CDE approved indirect cost rate or the statewide average indirect rate. Condition The District charged unallowable indirect costs totaling $60,501 to the Child Nutrition Cluster. Questioned Costs The condition identified above resulted in $60,501 of questioned costs for unallowable indirect costs charged to the grant funds. Context The condition was identified through recalculation of the indirect costs charged to the federal programs. Effect The District has charged unallowable expenditures to the federal programs. Cause The condition identified appears to be due to the District not being familiar with the indirect cost requirements for each of the federal programs. Repeat Finding No. Recommendation It is recommended that the District implements a review process for indirect costs, which should include review of relevant grant agreements and relevant federal guidance.

Federal Program Affected Federal Agency: U.S. Department of Agriculture Pass-Through Entity: California Department of Education (CDE) Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555 Compliance Requirement: A/B (Activities Allowed or Unallowed and Allowable Costs/Cost Principles) Criteria or Specific Requirements The United States Department of Education has approved a delegation agreement with the California Department of Education (CDE) that authorizes the CDE to establish indirect cost rates for California local education agencies (LEAs). The CDE has been delegated authority to calculate and approve indirect cost rates annually for LEAs. For the Child Nutrition Cluster in fiscal year 2022-2023, California Education Code Section 38101(c) limits school district indirect costs to the lesser of the District’s individual CDE approved indirect cost rate or the statewide average indirect rate. Condition The District charged unallowable indirect costs totaling $60,501 to the Child Nutrition Cluster. Questioned Costs The condition identified above resulted in $60,501 of questioned costs for unallowable indirect costs charged to the grant funds. Context The condition was identified through recalculation of the indirect costs charged to the federal programs. Effect The District has charged unallowable expenditures to the federal programs. Cause The condition identified appears to be due to the District not being familiar with the indirect cost requirements for each of the federal programs. Repeat Finding No. Recommendation It is recommended that the District implements a review process for indirect costs, which should include review of relevant grant agreements and relevant federal guidance.

Federal Program Affected Federal Agency: U.S. Department of Agriculture Pass-Through Entity: California Department of Education (CDE) Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555 Compliance Requirement: A/B (Activities Allowed or Unallowed and Allowable Costs/Cost Principles) Criteria or Specific Requirements The United States Department of Education has approved a delegation agreement with the California Department of Education (CDE) that authorizes the CDE to establish indirect cost rates for California local education agencies (LEAs). The CDE has been delegated authority to calculate and approve indirect cost rates annually for LEAs. For the Child Nutrition Cluster in fiscal year 2022-2023, California Education Code Section 38101(c) limits school district indirect costs to the lesser of the District’s individual CDE approved indirect cost rate or the statewide average indirect rate. Condition The District charged unallowable indirect costs totaling $60,501 to the Child Nutrition Cluster. Questioned Costs The condition identified above resulted in $60,501 of questioned costs for unallowable indirect costs charged to the grant funds. Context The condition was identified through recalculation of the indirect costs charged to the federal programs. Effect The District has charged unallowable expenditures to the federal programs. Cause The condition identified appears to be due to the District not being familiar with the indirect cost requirements for each of the federal programs. Repeat Finding No. Recommendation It is recommended that the District implements a review process for indirect costs, which should include review of relevant grant agreements and relevant federal guidance.

Federal Program Affected Federal Agency: U.S. Department of Agriculture Pass-Through Entity: California Department of Education (CDE) Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555 Compliance Requirement: A/B (Activities Allowed or Unallowed and Allowable Costs/Cost Principles) Criteria or Specific Requirements The United States Department of Education has approved a delegation agreement with the California Department of Education (CDE) that authorizes the CDE to establish indirect cost rates for California local education agencies (LEAs). The CDE has been delegated authority to calculate and approve indirect cost rates annually for LEAs. For the Child Nutrition Cluster in fiscal year 2022-2023, California Education Code Section 38101(c) limits school district indirect costs to the lesser of the District’s individual CDE approved indirect cost rate or the statewide average indirect rate. Condition The District charged unallowable indirect costs totaling $60,501 to the Child Nutrition Cluster. Questioned Costs The condition identified above resulted in $60,501 of questioned costs for unallowable indirect costs charged to the grant funds. Context The condition was identified through recalculation of the indirect costs charged to the federal programs. Effect The District has charged unallowable expenditures to the federal programs. Cause The condition identified appears to be due to the District not being familiar with the indirect cost requirements for each of the federal programs. Repeat Finding No. Recommendation It is recommended that the District implements a review process for indirect costs, which should include review of relevant grant agreements and relevant federal guidance.

Federal Program Affected Federal Agency: U.S. Department of Agriculture Pass-Through Entity: California Department of Education (CDE) Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555 Compliance Requirement: A/B (Activities Allowed or Unallowed and Allowable Costs/Cost Principles) Criteria or Specific Requirements The United States Department of Education has approved a delegation agreement with the California Department of Education (CDE) that authorizes the CDE to establish indirect cost rates for California local education agencies (LEAs). The CDE has been delegated authority to calculate and approve indirect cost rates annually for LEAs. For the Child Nutrition Cluster in fiscal year 2022-2023, California Education Code Section 38101(c) limits school district indirect costs to the lesser of the District’s individual CDE approved indirect cost rate or the statewide average indirect rate. Condition The District charged unallowable indirect costs totaling $60,501 to the Child Nutrition Cluster. Questioned Costs The condition identified above resulted in $60,501 of questioned costs for unallowable indirect costs charged to the grant funds. Context The condition was identified through recalculation of the indirect costs charged to the federal programs. Effect The District has charged unallowable expenditures to the federal programs. Cause The condition identified appears to be due to the District not being familiar with the indirect cost requirements for each of the federal programs. Repeat Finding No. Recommendation It is recommended that the District implements a review process for indirect costs, which should include review of relevant grant agreements and relevant federal guidance.

Federal Program Affected Federal Agency: U.S. Department of Agriculture Pass-Through Entity: California Department of Education (CDE) Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555 Compliance Requirement: A/B (Activities Allowed or Unallowed and Allowable Costs/Cost Principles) Criteria or Specific Requirements The United States Department of Education has approved a delegation agreement with the California Department of Education (CDE) that authorizes the CDE to establish indirect cost rates for California local education agencies (LEAs). The CDE has been delegated authority to calculate and approve indirect cost rates annually for LEAs. For the Child Nutrition Cluster in fiscal year 2022-2023, California Education Code Section 38101(c) limits school district indirect costs to the lesser of the District’s individual CDE approved indirect cost rate or the statewide average indirect rate. Condition The District charged unallowable indirect costs totaling $60,501 to the Child Nutrition Cluster. Questioned Costs The condition identified above resulted in $60,501 of questioned costs for unallowable indirect costs charged to the grant funds. Context The condition was identified through recalculation of the indirect costs charged to the federal programs. Effect The District has charged unallowable expenditures to the federal programs. Cause The condition identified appears to be due to the District not being familiar with the indirect cost requirements for each of the federal programs. Repeat Finding No. Recommendation It is recommended that the District implements a review process for indirect costs, which should include review of relevant grant agreements and relevant federal guidance.

Federal Program Affected Federal Agency: U.S. Department of Agriculture Pass-Through Entity: California Department of Education (CDE) Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555 Compliance Requirement: N (Special Tests and Provisions – Verification of Free and Reduced- Price Applications) Criteria or Specific Requirements Per Title 7, U.S. Code of Federal Regulations, Subtitle B, Chapter II, Subchapter A, Parts 245.6a. The local education agency must verify the current free and reduced-price eligibility of households selected from a sample of applications that it has approved for free and reduced-price meals, by November 15 of each school year. The verification sample size is based on the total number of approved applications on file October 1. Condition The District did not appropriately calculate the number of applications required to be sampled for the verification process by November 15th of the school year. As a result, the District selected fewer applications for verification than was required to meet the three percent requirement. Questioned Costs There were no questioned costs associated with the identified condition. Context The condition was identified through inquiry with District personnel and through review of available supporting documentation. The District was required to select 50 applications for verification. However, due to the calculation error, only 24 applications were selected for verification. Effect The District does not appear to be in compliance with Special Test and Provision requirements for the Child Nutrition Cluster. Cause The cause appears to have been triggered by the change to universal meals, coupled with the increase in qualified CEP sites. Repeat Finding No. Recommendation The District should establish procedures to ensure the verification process is completed timely and the appropriate eligibility changes are made.

Federal Program Affected Federal Agency: U.S. Department of Agriculture Pass-Through Entity: California Department of Education (CDE) Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555 Compliance Requirement: N (Special Tests and Provisions – Verification of Free and Reduced- Price Applications) Criteria or Specific Requirements Per Title 7, U.S. Code of Federal Regulations, Subtitle B, Chapter II, Subchapter A, Parts 245.6a. The local education agency must verify the current free and reduced-price eligibility of households selected from a sample of applications that it has approved for free and reduced-price meals, by November 15 of each school year. The verification sample size is based on the total number of approved applications on file October 1. Condition The District did not appropriately calculate the number of applications required to be sampled for the verification process by November 15th of the school year. As a result, the District selected fewer applications for verification than was required to meet the three percent requirement. Questioned Costs There were no questioned costs associated with the identified condition. Context The condition was identified through inquiry with District personnel and through review of available supporting documentation. The District was required to select 50 applications for verification. However, due to the calculation error, only 24 applications were selected for verification. Effect The District does not appear to be in compliance with Special Test and Provision requirements for the Child Nutrition Cluster. Cause The cause appears to have been triggered by the change to universal meals, coupled with the increase in qualified CEP sites. Repeat Finding No. Recommendation The District should establish procedures to ensure the verification process is completed timely and the appropriate eligibility changes are made.

Federal Program Affected Federal Agency: U.S. Department of Agriculture Pass-Through Entity: California Department of Education (CDE) Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555 Compliance Requirement: N (Special Tests and Provisions – Verification of Free and Reduced- Price Applications) Criteria or Specific Requirements Per Title 7, U.S. Code of Federal Regulations, Subtitle B, Chapter II, Subchapter A, Parts 245.6a. The local education agency must verify the current free and reduced-price eligibility of households selected from a sample of applications that it has approved for free and reduced-price meals, by November 15 of each school year. The verification sample size is based on the total number of approved applications on file October 1. Condition The District did not appropriately calculate the number of applications required to be sampled for the verification process by November 15th of the school year. As a result, the District selected fewer applications for verification than was required to meet the three percent requirement. Questioned Costs There were no questioned costs associated with the identified condition. Context The condition was identified through inquiry with District personnel and through review of available supporting documentation. The District was required to select 50 applications for verification. However, due to the calculation error, only 24 applications were selected for verification. Effect The District does not appear to be in compliance with Special Test and Provision requirements for the Child Nutrition Cluster. Cause The cause appears to have been triggered by the change to universal meals, coupled with the increase in qualified CEP sites. Repeat Finding No. Recommendation The District should establish procedures to ensure the verification process is completed timely and the appropriate eligibility changes are made.

Federal Program Affected Federal Agency: U.S. Department of Agriculture Pass-Through Entity: California Department of Education (CDE) Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555 Compliance Requirement: N (Special Tests and Provisions – Verification of Free and Reduced- Price Applications) Criteria or Specific Requirements Per Title 7, U.S. Code of Federal Regulations, Subtitle B, Chapter II, Subchapter A, Parts 245.6a. The local education agency must verify the current free and reduced-price eligibility of households selected from a sample of applications that it has approved for free and reduced-price meals, by November 15 of each school year. The verification sample size is based on the total number of approved applications on file October 1. Condition The District did not appropriately calculate the number of applications required to be sampled for the verification process by November 15th of the school year. As a result, the District selected fewer applications for verification than was required to meet the three percent requirement. Questioned Costs There were no questioned costs associated with the identified condition. Context The condition was identified through inquiry with District personnel and through review of available supporting documentation. The District was required to select 50 applications for verification. However, due to the calculation error, only 24 applications were selected for verification. Effect The District does not appear to be in compliance with Special Test and Provision requirements for the Child Nutrition Cluster. Cause The cause appears to have been triggered by the change to universal meals, coupled with the increase in qualified CEP sites. Repeat Finding No. Recommendation The District should establish procedures to ensure the verification process is completed timely and the appropriate eligibility changes are made.

Federal Program Affected Federal Agency: U.S. Department of Agriculture Pass-Through Entity: California Department of Education (CDE) Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555 Compliance Requirement: N (Special Tests and Provisions – Verification of Free and Reduced- Price Applications) Criteria or Specific Requirements Per Title 7, U.S. Code of Federal Regulations, Subtitle B, Chapter II, Subchapter A, Parts 245.6a. The local education agency must verify the current free and reduced-price eligibility of households selected from a sample of applications that it has approved for free and reduced-price meals, by November 15 of each school year. The verification sample size is based on the total number of approved applications on file October 1. Condition The District did not appropriately calculate the number of applications required to be sampled for the verification process by November 15th of the school year. As a result, the District selected fewer applications for verification than was required to meet the three percent requirement. Questioned Costs There were no questioned costs associated with the identified condition. Context The condition was identified through inquiry with District personnel and through review of available supporting documentation. The District was required to select 50 applications for verification. However, due to the calculation error, only 24 applications were selected for verification. Effect The District does not appear to be in compliance with Special Test and Provision requirements for the Child Nutrition Cluster. Cause The cause appears to have been triggered by the change to universal meals, coupled with the increase in qualified CEP sites. Repeat Finding No. Recommendation The District should establish procedures to ensure the verification process is completed timely and the appropriate eligibility changes are made.

Federal Program Affected Federal Agency: U.S. Department of Agriculture Pass-Through Entity: California Department of Education (CDE) Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555 Compliance Requirement: N (Special Tests and Provisions – Verification of Free and Reduced- Price Applications) Criteria or Specific Requirements Per Title 7, U.S. Code of Federal Regulations, Subtitle B, Chapter II, Subchapter A, Parts 245.6a. The local education agency must verify the current free and reduced-price eligibility of households selected from a sample of applications that it has approved for free and reduced-price meals, by November 15 of each school year. The verification sample size is based on the total number of approved applications on file October 1. Condition The District did not appropriately calculate the number of applications required to be sampled for the verification process by November 15th of the school year. As a result, the District selected fewer applications for verification than was required to meet the three percent requirement. Questioned Costs There were no questioned costs associated with the identified condition. Context The condition was identified through inquiry with District personnel and through review of available supporting documentation. The District was required to select 50 applications for verification. However, due to the calculation error, only 24 applications were selected for verification. Effect The District does not appear to be in compliance with Special Test and Provision requirements for the Child Nutrition Cluster. Cause The cause appears to have been triggered by the change to universal meals, coupled with the increase in qualified CEP sites. Repeat Finding No. Recommendation The District should establish procedures to ensure the verification process is completed timely and the appropriate eligibility changes are made.

Federal Program Affected Federal Agency: U.S. Department of Agriculture Pass-Through Entity: California Department of Education (CDE) Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555 Compliance Requirement: A/B (Activities Allowed or Unallowed and Allowable Costs/Cost Principles) Criteria or Specific Requirements The United States Department of Education has approved a delegation agreement with the California Department of Education (CDE) that authorizes the CDE to establish indirect cost rates for California local education agencies (LEAs). The CDE has been delegated authority to calculate and approve indirect cost rates annually for LEAs. For the Child Nutrition Cluster in fiscal year 2022-2023, California Education Code Section 38101(c) limits school district indirect costs to the lesser of the District’s individual CDE approved indirect cost rate or the statewide average indirect rate. Condition The District charged unallowable indirect costs totaling $60,501 to the Child Nutrition Cluster. Questioned Costs The condition identified above resulted in $60,501 of questioned costs for unallowable indirect costs charged to the grant funds. Context The condition was identified through recalculation of the indirect costs charged to the federal programs. Effect The District has charged unallowable expenditures to the federal programs. Cause The condition identified appears to be due to the District not being familiar with the indirect cost requirements for each of the federal programs. Repeat Finding No. Recommendation It is recommended that the District implements a review process for indirect costs, which should include review of relevant grant agreements and relevant federal guidance.

Federal Program Affected Federal Agency: U.S. Department of Agriculture Pass-Through Entity: California Department of Education (CDE) Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555 Compliance Requirement: A/B (Activities Allowed or Unallowed and Allowable Costs/Cost Principles) Criteria or Specific Requirements The United States Department of Education has approved a delegation agreement with the California Department of Education (CDE) that authorizes the CDE to establish indirect cost rates for California local education agencies (LEAs). The CDE has been delegated authority to calculate and approve indirect cost rates annually for LEAs. For the Child Nutrition Cluster in fiscal year 2022-2023, California Education Code Section 38101(c) limits school district indirect costs to the lesser of the District’s individual CDE approved indirect cost rate or the statewide average indirect rate. Condition The District charged unallowable indirect costs totaling $60,501 to the Child Nutrition Cluster. Questioned Costs The condition identified above resulted in $60,501 of questioned costs for unallowable indirect costs charged to the grant funds. Context The condition was identified through recalculation of the indirect costs charged to the federal programs. Effect The District has charged unallowable expenditures to the federal programs. Cause The condition identified appears to be due to the District not being familiar with the indirect cost requirements for each of the federal programs. Repeat Finding No. Recommendation It is recommended that the District implements a review process for indirect costs, which should include review of relevant grant agreements and relevant federal guidance.

Federal Program Affected Federal Agency: U.S. Department of Agriculture Pass-Through Entity: California Department of Education (CDE) Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555 Compliance Requirement: A/B (Activities Allowed or Unallowed and Allowable Costs/Cost Principles) Criteria or Specific Requirements The United States Department of Education has approved a delegation agreement with the California Department of Education (CDE) that authorizes the CDE to establish indirect cost rates for California local education agencies (LEAs). The CDE has been delegated authority to calculate and approve indirect cost rates annually for LEAs. For the Child Nutrition Cluster in fiscal year 2022-2023, California Education Code Section 38101(c) limits school district indirect costs to the lesser of the District’s individual CDE approved indirect cost rate or the statewide average indirect rate. Condition The District charged unallowable indirect costs totaling $60,501 to the Child Nutrition Cluster. Questioned Costs The condition identified above resulted in $60,501 of questioned costs for unallowable indirect costs charged to the grant funds. Context The condition was identified through recalculation of the indirect costs charged to the federal programs. Effect The District has charged unallowable expenditures to the federal programs. Cause The condition identified appears to be due to the District not being familiar with the indirect cost requirements for each of the federal programs. Repeat Finding No. Recommendation It is recommended that the District implements a review process for indirect costs, which should include review of relevant grant agreements and relevant federal guidance.

Federal Program Affected Federal Agency: U.S. Department of Agriculture Pass-Through Entity: California Department of Education (CDE) Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555 Compliance Requirement: A/B (Activities Allowed or Unallowed and Allowable Costs/Cost Principles) Criteria or Specific Requirements The United States Department of Education has approved a delegation agreement with the California Department of Education (CDE) that authorizes the CDE to establish indirect cost rates for California local education agencies (LEAs). The CDE has been delegated authority to calculate and approve indirect cost rates annually for LEAs. For the Child Nutrition Cluster in fiscal year 2022-2023, California Education Code Section 38101(c) limits school district indirect costs to the lesser of the District’s individual CDE approved indirect cost rate or the statewide average indirect rate. Condition The District charged unallowable indirect costs totaling $60,501 to the Child Nutrition Cluster. Questioned Costs The condition identified above resulted in $60,501 of questioned costs for unallowable indirect costs charged to the grant funds. Context The condition was identified through recalculation of the indirect costs charged to the federal programs. Effect The District has charged unallowable expenditures to the federal programs. Cause The condition identified appears to be due to the District not being familiar with the indirect cost requirements for each of the federal programs. Repeat Finding No. Recommendation It is recommended that the District implements a review process for indirect costs, which should include review of relevant grant agreements and relevant federal guidance.

Federal Program Affected Federal Agency: U.S. Department of Agriculture Pass-Through Entity: California Department of Education (CDE) Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555 Compliance Requirement: A/B (Activities Allowed or Unallowed and Allowable Costs/Cost Principles) Criteria or Specific Requirements The United States Department of Education has approved a delegation agreement with the California Department of Education (CDE) that authorizes the CDE to establish indirect cost rates for California local education agencies (LEAs). The CDE has been delegated authority to calculate and approve indirect cost rates annually for LEAs. For the Child Nutrition Cluster in fiscal year 2022-2023, California Education Code Section 38101(c) limits school district indirect costs to the lesser of the District’s individual CDE approved indirect cost rate or the statewide average indirect rate. Condition The District charged unallowable indirect costs totaling $60,501 to the Child Nutrition Cluster. Questioned Costs The condition identified above resulted in $60,501 of questioned costs for unallowable indirect costs charged to the grant funds. Context The condition was identified through recalculation of the indirect costs charged to the federal programs. Effect The District has charged unallowable expenditures to the federal programs. Cause The condition identified appears to be due to the District not being familiar with the indirect cost requirements for each of the federal programs. Repeat Finding No. Recommendation It is recommended that the District implements a review process for indirect costs, which should include review of relevant grant agreements and relevant federal guidance.

Federal Program Affected Federal Agency: U.S. Department of Agriculture Pass-Through Entity: California Department of Education (CDE) Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555 Compliance Requirement: A/B (Activities Allowed or Unallowed and Allowable Costs/Cost Principles) Criteria or Specific Requirements The United States Department of Education has approved a delegation agreement with the California Department of Education (CDE) that authorizes the CDE to establish indirect cost rates for California local education agencies (LEAs). The CDE has been delegated authority to calculate and approve indirect cost rates annually for LEAs. For the Child Nutrition Cluster in fiscal year 2022-2023, California Education Code Section 38101(c) limits school district indirect costs to the lesser of the District’s individual CDE approved indirect cost rate or the statewide average indirect rate. Condition The District charged unallowable indirect costs totaling $60,501 to the Child Nutrition Cluster. Questioned Costs The condition identified above resulted in $60,501 of questioned costs for unallowable indirect costs charged to the grant funds. Context The condition was identified through recalculation of the indirect costs charged to the federal programs. Effect The District has charged unallowable expenditures to the federal programs. Cause The condition identified appears to be due to the District not being familiar with the indirect cost requirements for each of the federal programs. Repeat Finding No. Recommendation It is recommended that the District implements a review process for indirect costs, which should include review of relevant grant agreements and relevant federal guidance.