Audit 391507

Criteria: Federal awarding agencies and pass-through entities require recipients to submit periodic financial and performance reports, including but not limited to cash reconciliation reports, quarterly reports, and final expenditure reports, within specified deadlines. These reports must be accurate, complete, and supported by underlying accounting records. Additionally, recipients are required to establish and maintain effective internal controls to ensure the accurate preparation, reconciliation, and timely submission of all required federal reports in accordance with 2 CFR 200.302 and 2 CFR 200.303. Condition: The District did not consistently file required federal reports within established deadlines. Specifically, certain required quarterly cash reconciliation reports were submitted after the required due dates, and in some instances, required reports were not submitted. Additionally, the District was unable to provide adequate supporting documentation to reconcile reported expenditures to the general ledger for certain federal reports. Furthermore, required final expenditure reports were not always submitted after funds were fully expended. These issues were noted across multiple federal programs, indicating deficiencies in the District’s overall internal controls over federal reporting. Cause: The District's internal controls and review process over federal reporting were not operating effectively. There was a lack of adequate supervisory review and monitoring to ensure that all federal reports were prepared accurately, reconciled to the general ledger, and submitted in a timely manner. Effect: The District is not in compliance with federal reporting requirements. Failure to submit accurate and timely reports could result in delayed reimbursements, increased scrutiny by federal and pass-through agencies, or potential withholding or loss of federal funding. Questioned Costs: None Recommendation: We recommend that the District strengthen internal controls over federal reporting for all federal programs. The District should implement formal procedures to ensure that all required federal reports are prepared accurately and completely, reconciled to the general ledger, reviewed by appropriate supervisory personnel, and submitted timely in accordance with federal and pass-through agency requirements. Additionally, the District should provide training to personnel responsible for federal reporting and implement a monitoring process to ensure ongoing compliance with federal requirements. Views of Responsible Officials: Management is in agreement with the finding. Prior Year Finding: 2023-02

Criteria: In accordance with 7 CFR 210.14 and 7 CFR 220.7, School Food Authorities are required to maintain a nonprofit school food service account. All revenues received from food service operations and federal reimbursements must be retained and used only for the operation or improvement of the nonprofit school food service. Additionally, sound internal control practices and fund accounting principles require that food service funds be accounted for separately to ensure proper accountability, transparency, and compliance with federal program requirements. Condition: The District did not maintain a separate bank account for its Cafeteria Fund during fiscal year 2024. Instead, cafeteria-related receipts and disbursements were processed through the District’s General Fund bank account. As a result, cafeteria activity was commingled with General Fund activity rather than maintained separately. Cause: The District did not establish separate cash management procedures to ensure cafeteria fund activity was maintained in a separate bank account. This resulted from inadequate internal controls over fund segregation and cash management for the nonprofit school food service program. Effect: Failure to maintain a separate bank account for the Cafeteria Fund increases the risk that cafeteria funds may not be properly safeguarded, tracked, or used solely for allowable food service purposes. This condition may result in noncompliance with federal program requirements and reduces transparency and accountability over cafeteria fund operations. Questioned Costs: None Recommendation: We recommend that the District establish a separate bank account for its Cafeteria Fund to ensure that all food service revenues and expenditures are properly segregated and accounted for in accordance with federal regulations and sound internal control practices. The District should implement procedures to ensure cafeteria funds are used exclusively for allowable food service purposes and are properly monitored and reconciled. Views of Responsible Officials: Management is in agreement with the finding. Prior Year Finding: None