Audit 415212

Criteria: Section 200.512 of the Uniform Guidance requires that the audit be completed, and the data collection form and reporting package be submitted within the earlier of 30 calendar days after receipt of the auditors’ reports, or nine months after the end of the audit period. Condition: The current audit report and reporting package was due to be completed and submitted by September 30, 2024. The completion of the audit and submission of the reporting package was not completed within the required submission timeline. Cause: Audit files were turned in complete on 9/30/2024 but were not submitted early enough to allow time for the auditors’ review and submission prior to the submission deadline. Effect: The audit and reporting package are considered late and will be submitted after the required submission timeline. Questioned Costs: None Recommendation: We recommend the Organization implement financial closing procedures that include the single audit performance and ensure the timely submission of both the data collection form and the reporting package. Management Response: BBCF will begin preparation for the federal audit each year between January and March for the prior calendar year in order to complete and meet the requirement to submit the program-specific audit to the California Department of Education and Federal Audit Clearinghouse on or prior to the deadline.

Criteria: The Uniform Guidance requires that a sponsoring organization must disburse advance and meal reimbursement payments to centers and day care homes under its sponsorship within five working days of receiving them from its State agency. Condition: During our testing of the cash management compliance requirement for the CACFP, we noted that the Organization did not consistently comply with applicable cash management requirements. The Organization remitted meal reimbursement payments to centers under its sponsorship beyond five working days of receiving them from its State agency. Cause: The Organization could not disburse meal reimbursement payments to the centers under its sponsorship within five working days of receiving them from the State agency. Effect: The Organization is in noncompliance with the terms and conditions of the CACFP award and may affect the reliability of financial and program reporting related to the federal award. Questioned Costs: None Recommendation: We recommend the Organization strengthen internal controls and procedures over cash management to ensure compliance with federal requirements. At a minimum, management should: • Develop or update written cash management procedures specific to CACFP, including requirements for reimbursement requests, advances, drawdowns, disbursements, reconciliations, documentation retention, and monitoring of federal cash balances. • Require documented supervisory review and approval of CACFP reimbursement claims, draw requests, and related supporting documentation before submission or recording. • Perform timely reconciliations between CACFP claims, reimbursement receipts, general ledger activity, bank records, and program expenditure reports. • Maintain adequate supporting documentation demonstrating that CACFP cash receipts and disbursements are allowable, properly authorized, accurately recorded, and used for program purposes. • Provide training to fiscal and program staff responsible for CACFP administration on federal cash management requirements and the Organization’s related policies and procedures. • Monitor and resolve exceptions promptly, including correcting claims or adjusting accounting records when necessary. Management Response: BBCF acknowledges the auditor’s finding that certain reimbursements to sponsored centers were distributed more than five working days after BBCF received the related State payments. Management recognizes that prompt disbursement must be supported by controls that operate consistently despite workload or staffing changes.

Criteria: Sponsoring organizations participating in the CACFP are required to monitor the facilities under their sponsorship in accordance with CACFP program requirements and the applicable federal and state administering agency rules. Monitoring visits are intended to provide oversight of participating facilities, verify compliance with program requirements, and support the allowability of meals claimed for reimbursement. For CACFP sponsoring organizations, required monitoring generally includes periodic reviews of each sponsored facility. At least one required monitoring visit must include observation of a meal service, as applicable under program requirements. The meal observation is a key control for verifying that reimbursable meals are served in accordance with the CACFP meal pattern, attendance, meal count, and program operating requirements. Condition: During our testing over subrecipient monitoring, we noted one instance where the Organization did not perform a meal observation across three site visits for one of the centers during a 12-month period. Cause: The condition appears to have resulted from insufficient controls over scheduling, performing, and documenting required CACFP monitoring visits. Specifically, the sponsoring organization did not have an effective process to ensure that monitoring staff: • Identified which visits were required to include a meal observation; • Scheduled visits to coincide with an approved meal service time; • Completed all required monitoring elements during the visit; and • Reviewed monitoring documentation for completeness before closing the visit. Effect: Failure to perform the required meal observation reduces the sponsoring organization’s ability to verify that meals claimed for reimbursement were served in compliance with CACFP requirements. Without a meal observation, the sponsor may not identify noncompliance related to meal counts, attendance, meal pattern requirements, approved meal service times, or other operational requirements affecting the allowability of CACFP claims. Questioned Costs: None Recommendation: We recommend that the sponsoring organization strengthen its CACFP monitoring procedures to ensure all required meal observations are performed and documented. At a minimum, management should: • Implement a monitoring schedule control that identifies which facility visits must include a meal observation and the applicable meal service time. • Require advance planning by monitoring staff to ensure visits occur during an approved meal service when a meal observation is required. • Revise monitoring forms or electronic checklists to require completion of meal observation fields before a monitoring visit can be closed. • Perform supervisory review of monitoring documentation to verify that required visit elements, including meal observations, are completed and supported. • Train monitoring staff on CACFP sponsor monitoring requirements, including when meal observations are required and how they should be documented. • Perform a retrospective review of monitoring visits during the audit period to determine whether additional required meal observations were missed. • Calculate and resolve questioned costs, if applicable, in coordination with the state administering agency, based on the affected meal service, claim period, and applicable reimbursement rates. Management Response: BBCF acknowledges this specific exception and the associated weakness in controls for scheduling and verifying required monitoring elements. The finding alone does not establish that other sponsored centers lacked required observations.