Audit 390175

CONDITION: The School District did not make the necessary monthly adjustments to the Cafeteria Fund general ledger to properly reconcile all of the balance sheet, revenue, and expense accounts to the underlying supporting documentation on hand at the School District. Accordingly, the financial position and results of operations for the Cafeteria Fund were stated incorrectly during the 2023-2024 fiscal year.CRITERIA: Prudent internal control over accounting for federal program funds requires non-federal organizations such as the School District to maintain financial records which account for federal funds in such a manner as to be able to properly track the receipt and use of federal funds as stated in Section 2 CFR Part 200 of the Uniform Guidance. EFFECT: By not making the necessary monthly adjustments to properly state the balance sheet, revenue, and expense accounts of the School District’s Cafeteria Fund general ledger during the fiscal year significantly reduces the ability to properly manage and account for the assets and financial results of the Cafeteria Fund. In addition, the lack of these procedures reduces the District’s ability to comply with the compliance requirements for internal control over financial reporting for federal programs as stated in Section 2 CFR Part 200 of the Uniform Guidance. CAUSE: The School District does not employ a general ledger accountant with the requisite skills necessary to perform the monthly reconciliations of all balance sheet, revenue, and expense accounts of the Cafeteria Fund general ledger. RECOMMENDATION: I am recommending that the management of the School District establish written procedures for all accounting functions, but most notably for the function of making the necessary adjustments to the School District’s Cafeteria Fund general ledger in order to properly present the financial position and results of operations of this Fund over the course of the fiscal year. Consideration should be given to either performing this process in-house based on available manpower or contracted to a third-party accounting Firm quarterly or annually independent of the audit process. Management needs to ensure the performance of these procedures monthly in order to ensure its compliance with Section 2 CFR Part 200 of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.