Audit 380780

Criteria: According to 7 CFR Section 210.14(a), a school food authority shall maintain a nonprofit school food service. In addition, 7 CFR Section 210.14(b) states that the school food service authority shall limit its net cash resources to an amount that does not exceed three months' average expenditures for its nonprofit school food service. Condition: The District has food service net cash resources in excess of the three month average expenditure carryover limit. Questioned Costs: None. Context: The District has net cash resources of $307,761, and the three month average expenditures is $90,211, resulting in excess net cash resources of $217,550. Effect: The effect of an excessive profit in the food service program is that federal funds intended to feed school children could be used to subsidize other programs. Cause: The District was unaware the program has been operating at a profit. Recommendation: We recommend that the District monitor the profit made by the food service program. All allowable expenditures used to operate the program should be charged to the program. In addition, the District needs to adopt a plan to spend the accumulated cash reserves. Management's Response: The District will continue to allocate indirect costs to eliminate the surplus.

Criteria: Semi-annual certifications are required for Title I personnel whose compensation is funded solely from the Title I grant. Additionally, time and effort documentation is required for Title I personnel whose time is charged in part to Title I and in part to other revenue sources (split-funded staff). Condition: During our testing, we noted that four employees could not substantiate time charged to Title I for 11 pay periods. In addition, we noted one employee that could not substantiate all time charged to Title I. Questioned Costs: While testing payroll expenditures, we noted thirteen of forty pay checks were supporting documentation for five employees was incomplete resulting in known questioned costs of $12,141.77. Projected to the population as a whole, questioned costs are estimated to be approximately $68,075.92. Context: Total salaries charged to Title I were $167,490 for the year ended June 30, 2025. Effect: The District was not in compliance with the Federal requirement. Cause: The District was unaware that semi-annual certifications, time and effort logs, or a substitute system for time-and-effort reporting needed to be documented for employees working on multiple cost objects. Recommendation: We recommend that the District complete the required semi-annual certifications or time and effort logs for each employee who has time allocated to the grant. Management's Response: The District will begin completing the necessary semi-annual certifications of time and effort distribution records.

Criteria: For employees whose time is coded to multiple cost centers, time and effort documentation is essential to support the amount of time charged to each program. That documentation should be approved by the employee's supervisor. Condition: We found that time sheets supporting the amount of time charged to the grant program contained no evidence of supervisory approval. Questioned Costs: None. Context: Total salaries of the program were $167,490 for the year ended June 30, 2025. The portion of these salaries paid to employees working for multiple costs centers is not known. Effect: Increses the risk that inappropriate time charges could be applied to the grant program resulting in overcharging the grant for costs incurred. Our test was a statistical sample of 40 expenditures and 14 did not have supervisory approval. Cause: The District was not aware that approval needed to be documented on these timesheets. Recommendation: We recommend that the Superintendent approves all timesheets and the approval is documented and maintained. Management's Response: The Superintendent will begin to document his approval for all timesheets.