Audit 397116

Finding No. 2025-001 Information on the Federal Program U.S. Department of Agriculture Child Nutrition Cluster: Passed-through N.J. State Department of Agriculture: School Breakfast Program Assistance Listing 10.553 National School Lunch Program Assistance Listing 10.555 Criteria or Specific Requirement The Office of Management and Budget’s Matrix of Compliance Requirements identifies requirements addressed in the Compliance Supplement. One area addressed is reporting. Reporting must be properly completed with supporting documentation. Condition In several instances, the School District’s edit check worksheets did not agree with the number of meals requested for Federal reimbursement. Additionally, there were twenty-one instances where the food service daily meal count report did not agree with the School District’s edit check worksheets. Questioned Costs Known and likely questioned costs did not exceed $25,000.00. Context We noted several instances where the monthly edit check sheets did not agree to the number of meals requested for reimbursement. Also, during our testing of meals reported, we noted twenty-one instances where the number of meals served did not agree to the monthly edit check worksheets. Effect or Potential Effect The School District did not request reimbursement for the correct number of meals served and, as a result, did not receive the proper amount of Federal reimbursement. Cause As a result of a change in School District personnel, the School District did not reconcile the number of meals served with the number of meals claimed for reimbursement and did not maintain supporting documentation for all meals claimed for reimbursement. Identification as a Repeat Finding The condition existed in the immediately preceding fiscal year as finding 2024-006. Recommendation The School District should ensure that all edit check worksheets are maintained as supporting documentation and they agree to the number of meals requested for reimbursement. View of Responsible Officials and Planned Corrective Action The client has worked with the software provider and identified the issue with the edit check sheets not correctly reporting meals on a daily basis. The software has been adjusted by the provider and the issue should be resolved.

Finding No. 2025-002 Information on the Federal Program U.S. Department of Education Child Nutrition Cluster: Passed-through N.J. State Department of Education: Title I Grants to Local Educational Agencies Assistance Listing 84.010 Criteria or Specific Requirement The Office of Management and Budget’s Matrix of Compliance Requirements identifies requirements addressed in the Compliance Supplement. One area addressed is allowable costs and cost principles. Charges to the grant must be allowable and in accordance with all cost principles of the program. Condition The School District charged expenditures that are outside the scope of allowable program activities for the Title I program. Questioned Costs Known questioned costs were $218,196.43. The questioned costs were calculated based on a detailed review of expenditures charged to the Title I program during the audit period. The auditors identified specific transactions that did not meet the allowability requirements under 2 CFR Part 200. The total questioned costs represent the sum of those transactions. Context During our payroll testing for charges to the Title I grant, we noted several employee stipends for the December and June payrolls were incorrectly charged to the Title I program. Effect or Potential Effect As a result, the Title I program was charged for unallowable costs totaling $218,196.43, resulting in questioned costs. This reduces the funds available for allowable program activities and may require repayment to the granting agency. Cause The condition is the result of a miscommunication of what the proper account to charge employee stipends. The auditee did not have sufficient procedures in place to ensure that costs were evaluated for allowability prior to being charged to the Title I grant. Identification as a Repeat Finding The condition did not exist in the immediately preceding fiscal year. Recommendation The School District should review internal controls over the charging of grant expenditures to ensure expenditures are recorded to the proper account. View of Responsible Officials and Planned Corrective Action The responsible officials agree with the finding and will address the matter as part of their corrective action plan.