2023-003 – EXCESS FUND BALANCE IN FOOD SERVICE FUND (repeat finding)
Type: Material Weakness in Internal Control / Noncompliance – Special Tests and Provisions
Program: Child Nutrition Cluster (ALN 10.553 and 10.555)
Condition: As of year-end the District had a fund balance in the non-profit food service fund in excess of three months’ operating expenses by $270,525.
Criteria: The USDA requires that the District limit its net cash resources to an amount that does not exceed a 3 month average of expenditures in the non-profit food service fund per requirements in 7 CFR Part 210.14(b).
Cause: This condition was caused by an increase in meals claimed for reimbursement, which resulted in more reimbursement revenue than anticipated.
Effect: The District will be required to develop a spending plan for reducing the balance to an acceptable level during the following school year. The plan must be submitted to the Michigan Department of Education (MDE), Office of School Support Services for prior approval.
Recommendation: We recommend that the District develop a spending plan as required by MDE and submit the plan at their earliest convenience.
Management’s Resp: We are in agreement with this finding. The district is now working on a spend down plan to enhance the Food Service Program.
2023-003 – EXCESS FUND BALANCE IN FOOD SERVICE FUND (repeat finding)
Type: Material Weakness in Internal Control / Noncompliance – Special Tests and Provisions
Program: Child Nutrition Cluster (ALN 10.553 and 10.555)
Condition: As of year-end the District had a fund balance in the non-profit food service fund in excess of three months’ operating expenses by $270,525.
Criteria: The USDA requires that the District limit its net cash resources to an amount that does not exceed a 3 month average of expenditures in the non-profit food service fund per requirements in 7 CFR Part 210.14(b).
Cause: This condition was caused by an increase in meals claimed for reimbursement, which resulted in more reimbursement revenue than anticipated.
Effect: The District will be required to develop a spending plan for reducing the balance to an acceptable level during the following school year. The plan must be submitted to the Michigan Department of Education (MDE), Office of School Support Services for prior approval.
Recommendation: We recommend that the District develop a spending plan as required by MDE and submit the plan at their earliest convenience.
Management’s Resp: We are in agreement with this finding. The district is now working on a spend down plan to enhance the Food Service Program.
2023-003 – EXCESS FUND BALANCE IN FOOD SERVICE FUND (repeat finding)
Type: Material Weakness in Internal Control / Noncompliance – Special Tests and Provisions
Program: Child Nutrition Cluster (ALN 10.553 and 10.555)
Condition: As of year-end the District had a fund balance in the non-profit food service fund in excess of three months’ operating expenses by $270,525.
Criteria: The USDA requires that the District limit its net cash resources to an amount that does not exceed a 3 month average of expenditures in the non-profit food service fund per requirements in 7 CFR Part 210.14(b).
Cause: This condition was caused by an increase in meals claimed for reimbursement, which resulted in more reimbursement revenue than anticipated.
Effect: The District will be required to develop a spending plan for reducing the balance to an acceptable level during the following school year. The plan must be submitted to the Michigan Department of Education (MDE), Office of School Support Services for prior approval.
Recommendation: We recommend that the District develop a spending plan as required by MDE and submit the plan at their earliest convenience.
Management’s Resp: We are in agreement with this finding. The district is now working on a spend down plan to enhance the Food Service Program.
2023-003 – EXCESS FUND BALANCE IN FOOD SERVICE FUND (repeat finding)
Type: Material Weakness in Internal Control / Noncompliance – Special Tests and Provisions
Program: Child Nutrition Cluster (ALN 10.553 and 10.555)
Condition: As of year-end the District had a fund balance in the non-profit food service fund in excess of three months’ operating expenses by $270,525.
Criteria: The USDA requires that the District limit its net cash resources to an amount that does not exceed a 3 month average of expenditures in the non-profit food service fund per requirements in 7 CFR Part 210.14(b).
Cause: This condition was caused by an increase in meals claimed for reimbursement, which resulted in more reimbursement revenue than anticipated.
Effect: The District will be required to develop a spending plan for reducing the balance to an acceptable level during the following school year. The plan must be submitted to the Michigan Department of Education (MDE), Office of School Support Services for prior approval.
Recommendation: We recommend that the District develop a spending plan as required by MDE and submit the plan at their earliest convenience.
Management’s Resp: We are in agreement with this finding. The district is now working on a spend down plan to enhance the Food Service Program.
2023-004 - ACTIVITIES ALLOWED OR UNALLOWED / ALLOWABLE COSTS/COST PRINCIPLES
Type: Significant Deficiency in Internal Control / Non-compliance
Program: ALN 84.425 Education Stabilization Fund, COVID-19 - ESSER II - Formula
Criteria: As detailed in 2 CFR 200.402, the total cost of a Federal award is the sum of the allowable direct and allocable indirect costs less any applicable credits.
Condition: During testing of grant disbursements, it was noted that a charge for a sound system was not authorized by the grant. The total amount charged to the grant for this purchase was $20,050.
Cause/Effect: This condition appears to be the result of a misunderstanding of costs allowed under this grant. These costs were not in compliance with 2 CFR 200.402.
Recommendation: We recommend that the District review all grant agreements to gain a thorough understanding of allowable costs and then establish/modify internal controls to assure that only allowable costs are charged to the grant.
View of Responsible
Official: Management is in agreement with this recommendation
2023-006 – ACTIVITIES ALLOWED OR UNALLOWED
Type: Significant Deficiency in Internal Control
Program: ALN 84.425 Education Stabilization Fund, COVID-19 - ESSER II – Summer School and ESSER II – 98c
Criteria: As detailed by 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition: During testing of amounts charged to the grants, it was noted that several items charged to the grant did not have proper approval signatures.
Cause/Effect: This condition appears to be the result of a vacancy in the business manager position.
Recommendation: We recommend that the District establish/modify internal controls to assure that internal controls are maintained/alternate internal controls are in place when a key position is vacant.
View of Responsible
Official: Management is in agreement with this recommendation
2023-005 – PERIOD OF PERFORMANCE
Type: Significant Deficiency in Internal Control / Non-compliance
Program: ALN 84.425 Education Stabilization Fund, COVID-19 - ESSER II – Credit Recovery
Criteria: As detailed by 2 CFR 200.308, 2 CFR 200.309, and 2 CFR 200 403(h), A non-federal entity may only charge allowable costs incurred 1) during the approved budget period, or 2) before the approved budget period if authorized by the federal awarding agency or pass-through entity.
Condition: During testing of amounts charged to the grants, it was noted that an amount charged to the grant was incurred outside the approved budget period of performance.
Cause/Effect: This condition appears to be the result of a misunderstanding of costs allowed under this grant. These costs were not in compliance with 2 CFR 200.
Recommendation: We recommend that the District review all grant agreements to gain a thorough understanding of the period of performance for each grant and then establish/modify internal controls to assure that only costs incurred within the approved budget period of performance are charged to the grant.
View of Responsible
Official: Management is in agreement with this recommendation
2023-006 – ACTIVITIES ALLOWED OR UNALLOWED
Type: Significant Deficiency in Internal Control
Program: ALN 84.425 Education Stabilization Fund, COVID-19 - ESSER II – Summer School and ESSER II – 98c
Criteria: As detailed by 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition: During testing of amounts charged to the grants, it was noted that several items charged to the grant did not have proper approval signatures.
Cause/Effect: This condition appears to be the result of a vacancy in the business manager position.
Recommendation: We recommend that the District establish/modify internal controls to assure that internal controls are maintained/alternate internal controls are in place when a key position is vacant.
View of Responsible
Official: Management is in agreement with this recommendation
2023-003 – EXCESS FUND BALANCE IN FOOD SERVICE FUND (repeat finding)
Type: Material Weakness in Internal Control / Noncompliance – Special Tests and Provisions
Program: Child Nutrition Cluster (ALN 10.553 and 10.555)
Condition: As of year-end the District had a fund balance in the non-profit food service fund in excess of three months’ operating expenses by $270,525.
Criteria: The USDA requires that the District limit its net cash resources to an amount that does not exceed a 3 month average of expenditures in the non-profit food service fund per requirements in 7 CFR Part 210.14(b).
Cause: This condition was caused by an increase in meals claimed for reimbursement, which resulted in more reimbursement revenue than anticipated.
Effect: The District will be required to develop a spending plan for reducing the balance to an acceptable level during the following school year. The plan must be submitted to the Michigan Department of Education (MDE), Office of School Support Services for prior approval.
Recommendation: We recommend that the District develop a spending plan as required by MDE and submit the plan at their earliest convenience.
Management’s Resp: We are in agreement with this finding. The district is now working on a spend down plan to enhance the Food Service Program.
2023-003 – EXCESS FUND BALANCE IN FOOD SERVICE FUND (repeat finding)
Type: Material Weakness in Internal Control / Noncompliance – Special Tests and Provisions
Program: Child Nutrition Cluster (ALN 10.553 and 10.555)
Condition: As of year-end the District had a fund balance in the non-profit food service fund in excess of three months’ operating expenses by $270,525.
Criteria: The USDA requires that the District limit its net cash resources to an amount that does not exceed a 3 month average of expenditures in the non-profit food service fund per requirements in 7 CFR Part 210.14(b).
Cause: This condition was caused by an increase in meals claimed for reimbursement, which resulted in more reimbursement revenue than anticipated.
Effect: The District will be required to develop a spending plan for reducing the balance to an acceptable level during the following school year. The plan must be submitted to the Michigan Department of Education (MDE), Office of School Support Services for prior approval.
Recommendation: We recommend that the District develop a spending plan as required by MDE and submit the plan at their earliest convenience.
Management’s Resp: We are in agreement with this finding. The district is now working on a spend down plan to enhance the Food Service Program.
2023-003 – EXCESS FUND BALANCE IN FOOD SERVICE FUND (repeat finding)
Type: Material Weakness in Internal Control / Noncompliance – Special Tests and Provisions
Program: Child Nutrition Cluster (ALN 10.553 and 10.555)
Condition: As of year-end the District had a fund balance in the non-profit food service fund in excess of three months’ operating expenses by $270,525.
Criteria: The USDA requires that the District limit its net cash resources to an amount that does not exceed a 3 month average of expenditures in the non-profit food service fund per requirements in 7 CFR Part 210.14(b).
Cause: This condition was caused by an increase in meals claimed for reimbursement, which resulted in more reimbursement revenue than anticipated.
Effect: The District will be required to develop a spending plan for reducing the balance to an acceptable level during the following school year. The plan must be submitted to the Michigan Department of Education (MDE), Office of School Support Services for prior approval.
Recommendation: We recommend that the District develop a spending plan as required by MDE and submit the plan at their earliest convenience.
Management’s Resp: We are in agreement with this finding. The district is now working on a spend down plan to enhance the Food Service Program.
2023-003 – EXCESS FUND BALANCE IN FOOD SERVICE FUND (repeat finding)
Type: Material Weakness in Internal Control / Noncompliance – Special Tests and Provisions
Program: Child Nutrition Cluster (ALN 10.553 and 10.555)
Condition: As of year-end the District had a fund balance in the non-profit food service fund in excess of three months’ operating expenses by $270,525.
Criteria: The USDA requires that the District limit its net cash resources to an amount that does not exceed a 3 month average of expenditures in the non-profit food service fund per requirements in 7 CFR Part 210.14(b).
Cause: This condition was caused by an increase in meals claimed for reimbursement, which resulted in more reimbursement revenue than anticipated.
Effect: The District will be required to develop a spending plan for reducing the balance to an acceptable level during the following school year. The plan must be submitted to the Michigan Department of Education (MDE), Office of School Support Services for prior approval.
Recommendation: We recommend that the District develop a spending plan as required by MDE and submit the plan at their earliest convenience.
Management’s Resp: We are in agreement with this finding. The district is now working on a spend down plan to enhance the Food Service Program.
2023-004 - ACTIVITIES ALLOWED OR UNALLOWED / ALLOWABLE COSTS/COST PRINCIPLES
Type: Significant Deficiency in Internal Control / Non-compliance
Program: ALN 84.425 Education Stabilization Fund, COVID-19 - ESSER II - Formula
Criteria: As detailed in 2 CFR 200.402, the total cost of a Federal award is the sum of the allowable direct and allocable indirect costs less any applicable credits.
Condition: During testing of grant disbursements, it was noted that a charge for a sound system was not authorized by the grant. The total amount charged to the grant for this purchase was $20,050.
Cause/Effect: This condition appears to be the result of a misunderstanding of costs allowed under this grant. These costs were not in compliance with 2 CFR 200.402.
Recommendation: We recommend that the District review all grant agreements to gain a thorough understanding of allowable costs and then establish/modify internal controls to assure that only allowable costs are charged to the grant.
View of Responsible
Official: Management is in agreement with this recommendation
2023-006 – ACTIVITIES ALLOWED OR UNALLOWED
Type: Significant Deficiency in Internal Control
Program: ALN 84.425 Education Stabilization Fund, COVID-19 - ESSER II – Summer School and ESSER II – 98c
Criteria: As detailed by 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition: During testing of amounts charged to the grants, it was noted that several items charged to the grant did not have proper approval signatures.
Cause/Effect: This condition appears to be the result of a vacancy in the business manager position.
Recommendation: We recommend that the District establish/modify internal controls to assure that internal controls are maintained/alternate internal controls are in place when a key position is vacant.
View of Responsible
Official: Management is in agreement with this recommendation
2023-005 – PERIOD OF PERFORMANCE
Type: Significant Deficiency in Internal Control / Non-compliance
Program: ALN 84.425 Education Stabilization Fund, COVID-19 - ESSER II – Credit Recovery
Criteria: As detailed by 2 CFR 200.308, 2 CFR 200.309, and 2 CFR 200 403(h), A non-federal entity may only charge allowable costs incurred 1) during the approved budget period, or 2) before the approved budget period if authorized by the federal awarding agency or pass-through entity.
Condition: During testing of amounts charged to the grants, it was noted that an amount charged to the grant was incurred outside the approved budget period of performance.
Cause/Effect: This condition appears to be the result of a misunderstanding of costs allowed under this grant. These costs were not in compliance with 2 CFR 200.
Recommendation: We recommend that the District review all grant agreements to gain a thorough understanding of the period of performance for each grant and then establish/modify internal controls to assure that only costs incurred within the approved budget period of performance are charged to the grant.
View of Responsible
Official: Management is in agreement with this recommendation
2023-006 – ACTIVITIES ALLOWED OR UNALLOWED
Type: Significant Deficiency in Internal Control
Program: ALN 84.425 Education Stabilization Fund, COVID-19 - ESSER II – Summer School and ESSER II – 98c
Criteria: As detailed by 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition: During testing of amounts charged to the grants, it was noted that several items charged to the grant did not have proper approval signatures.
Cause/Effect: This condition appears to be the result of a vacancy in the business manager position.
Recommendation: We recommend that the District establish/modify internal controls to assure that internal controls are maintained/alternate internal controls are in place when a key position is vacant.
View of Responsible
Official: Management is in agreement with this recommendation