Corrective Action Plans

Corrective action Plan: The District recognizes that due to increased reimbursement during the past few years, the District has an excess of cash on hand over the permitted levels. Over the course of the 2022-23 school year, the district reviewed the program's needs to develop a strategy to utilize these funds by the food service program. To date the District has identified over thirty items for purchase by the Cafeteria Fund totaling in excess of $280,000. Along with these purchases, further equipment needs are currently being assessed in conjunction with the capital project approved by the voters in December of 2022. We expect such purchases will expend the entire amount of the excess fund balance if not more. The District expects to begin these purchases before the end of the 2023 - 2024 school year (June 30, 2023).

Finding Number 2023-002 Condition: At June 30, 2023, the District maintained fund balances in excess of three months’ average expenditures. Management Response/Plan: The District is working on a Spend Down Plan for the food service program based off guidance from Illinois State Board of Education. The District is working on replacing equipment and renovating cafeterias. Anticipated Date of completion: June 2024 Name of Contact Person: Melissa Geyman Sell

Finding Number: 2023-001 Condition: The School District did not properly review student applications to be eligible for free or reduced cost meals within the school nutrition program. As a result, one application, approved for reduced lunch, was ultimately ineligible for reduced cost meals under the school nutrition program. Planned Corrective Action: Grand Rapids Public Schools has updated to a new version of software, which should prevent the issue from occurring again. In order to confirm this, we will manually check 100% of the manual applications submitted for Fiscal Year 2023/24 before the final reimbursement request is submitted next year. Contact person responsible for corrective action: Phillip Greene Anticipated Completion Date: 10/16/2023

2023-002 Net Cash Resources - Child Nutrition Cluster (ALN # 10.553/10.555/10.559) Corrective Action Plan School District management agrees with condition, cause, and recommendation. With this overage, the district has purchased some new equipment for the cafeteria. Since the School District is CEP, there is no option to changing the revenue. The School District will continue upgrading the kitchens with the excess. Expected Correction Date: June 30, 2024

The District has responded with corrective action and has notified and informed the fixed asset appraisal company of all capitalized items purchased with federal funding. The District also implemented a review process. The Director of Business Services will review the listing sent to the fixed asset company to ensure compliance and verify the completeness of the data received from the appraisal company.

CORRECTIVE ACTION PLAN (CAP): 1. Explanation of Disagreement with Audit Finding There is no disagreement with the audit finding. 2. Actions Planned in Response to Finding Administration will ensure sufficient backup documentation is available. 3. Official Responsible for Ensuring CAP The Superintendent is responsible for ensuring corrective action of the deficiency. 4. Planned Completion Date for CAP The planned completion date for the CAP is immediate. 5. Official Responsible for Ensuring CAP The Board of Education will be monitoring this CAP

Finding: 2023-001 School Food Account - Net Cash Resources Child Nutrition Cluster (ALN Nos. 10.553, 10.555, and 10.559) Corrective Action Plan: The School District has a multi-tiered plan in place to address the excessive Net Cash Resources as so reported. The overall plan includes equipment replacements, increased wages for cafeteria staff, avoiding procurement of grants as well as buying more locally sourced food. During the 2022-2023 school year, as part of the 2021-2022 corrective action, the School District appropriated $380,000 from its appropriated fund balance to afford the purchase of a new refrigerated food truck, as well as to cover increased food costs and employee benefits. Equipment replacement purchases took place in the 22-23 school year; however, due to supply chain issues $202,984 in encumbrances were carried over to the 23- 24 school year as they have not yet been furnished by the vendors. The School District is in the process of finalizing a labor contract to commence in the 2023-2024 fiscal year, which will be a three year agreement. Money from this fund will be allocated towards increases to wages negotiated in that contract. The 2023-2024 School Lunch Fund budget is 47.45% higher than the 2022-2023 budget. The most notable increase to spending is within the Food Service Equipment line, to coincide with the plan to replace and cycle out aging equipment. Additional increases can be noted in the salaries, supplies, food purchases and contractual services budgetary lines. With the above in place, the School District plans to resolve the issue of excessive cash resources by the conclusion of the 2023-2024 school year.

Finding: 2023-002 Net Cash Resources Condition: At June 30, 2023, net cash resources in the school lunch fund exceeded the allowable limit of cash by $572,746. Corrective Action Plan: The School District is committed and will be diligent in preparing meals with high quality products. Regular cooked meals with expanded menu choices will be prepared which will result in an increase in expenses. There has been unpredictability with the increase of certain goods, and we expect this to continue into the 2023-2024 fiscal year as well. The School District also participates in the Community Eligibility Provision (CEP) which provides free breakfast and lunch to every student within the district. Salaries for School Lunch employees have also been increasing year after year due to the increase of minimum wage in New York State. The minimum wage is expected to increase to $15 per hour. The School District does have a practice of transferring BOCES aid gained from the cost of the BOCES management contract to the School Lunch Fund; the aid will not be transferred in upcoming years. The School District has devised a NYSED approved plan to expend the excess funds in the School Lunch Fund through appropriating a substantial amount of fund balance to be planned for and used for the cafeteria and kitchen capital project. If needed, we will examine other avenues to ensure we do not exceed the allowable limit of cash at year end.

To allocate direct cafeteria overhead costs and plan capital equipment purchases for cafeteria equipment to enhance delivery of student meals which will ensure reduction of net cash resources so as to not exceed three months of expenditures. In addition to the current mechanisms in place to utilize net cash resources, a formula was obtained and will be used to ensure the correct amount is spent. During the 22-23 school year, the district received additional covid related funding which also contributed to excess net cash resources.

The position of Child Nutrition Liason was vacant for 50% of FY23. As of October 23, this position is now filled. The Child nutrition Liason will ensure all applications are thoroughly reviewed before submisison of approval or denial. The Office of Child Nutrition will implement a new process for storing all applications for retrieval access.

The District will reduce net cash resources by investing in capital equiment where necessary and allocating direct cost overhead expenditures.

The district will provide a clear segregation of duties between the preparer and the approver by documenting written approval prior to submission of the student counts through the CNPWeb.

The district has already implemented the corrective action plan by submitting the PLE for the 2023-24 school year. The district will continue to submit the PLE on an annual basis.

Finding: 2023-002 School Food Account - Net Cash Resources (ALN #10.553/10.555/10.559) Corrective Action Plan: The School District has begun taking action to address this issue, as follows: Equipment Improvement - School Food Service Director, Joe Kilmer, Food Service Manager, Ann Overhiser, and the School Business Administrator have plans to improve and replace cafeteria equipment. The replacement plan will be completed in conjunction with the School District’s upcoming Capital Project. This work was originally expected to be included in a prior project but due to scheduling issues, is now included in the upcoming project which is expected to be completed by June 30, 2025. Retained Balance for Pending Settlements - Wages will increase into 2023 and beyond. The minimum wage in New York State is expected to continue to rise over the next several years according to legislation. The rate will rise to $15 per hour by the end of 2023. Annual increases will continue until the rate reaches $16 per hour in 2026. Annual increases will be published by the Commissioner of Labor and based on a number of economic factors. Due to the critical labor shortage, the School District recently increased hourly wages for food service helpers and cooks in order to attract additional workers to maintain operations. Enhanced Meals - The Food Service Director and Food Service Manager continue to take steps to improve food options. They include making improvements to center of the plate options and improving local food options as well. In addition, the School District plans to spend a portion of the School Lunch excess cash on cafeteria equipment as a part of its upcoming Capital Project which is expected to be completed by June 30, 2025. Anticipated Correction Date: June 30, 2024

Finding Number: 2023-005 Approval Of Expense Transactions Corrective Action Plan: A process was put in place in May 2023 to ensure that all principal approvals are documented in writing or electronic approval in the system which can be date stamped by the system. Payroll will not be run, nor grants submitted, until proper approval is received. Personnel Responsible for Corrective Action: Nachum Golodner, Academica Director of Accounting Anticipated Completion Date: June 30, 2024

Name of Contact Person: Rob Wright, Superintendent. Recommendation: We recommend the District follow the USDA guidelines for verification testing and income eligibility guidelines when making eligibility determinations of free and reduced breakfasts and lunches. Corrective Action: We will ensure the Food Service Director is completing the processes accurately and timely going forward. Proposed Completion Date: Immediately.

1. Explanation of Disagreement with Audit Finding There is no disagreement with the audit finding. 2. Actions Planned in Response to Finding The District will evaluate current procedures for accurately monitoring, recording, and reporting the number and type of meals served. 3. Official Responsible Dr. Jeff Ridlehoover, Superintendent, is the official responsible for ensuring corrective action. 4. Planned Completion Date June 30, 2024 5. Plan to Monitor Completion The Board of Education will be monitoring this Corrective Action Plan.

1. Explanation of Disagreement with Audit Finding There is no disagreement with the audit finding. 2. Actions Planned in Response to Finding The District will complete annual income verifications in the future in accordance with the requirements of the OMB Compliance Supplement. 3. Official Responsible Dr. Jeff Ridlehoover, Superintendent, is the official responsible for ensuring corrective action. 4. Planned Completion Date June 30, 2024 5. Plan to Monitor Completion The Board of Education will be monitoring this Corrective Action Plan.

Finding: 2023-004 – Written Policies Required by the Uniform Grant Guidance Auditor Description of Condition and Effect: Although the District has processes in place to cover these areas, there are no formal written policies covering payments, allowability of costs, and compensation. As a result of this condition, the District did not fully comply with the Uniform Guidance applicable to the above noted grants. Auditor Recommendation: We are aware that the District is evaluating options using internal and external resources to take corrective action. We recommend that the District proceed with its selected option as soon as practical, but no later than the end of the next fiscal year. Corrective Action: As noted, the District has processes in place that cover all grant guidelines related to federal funds. However, upon bringing it to our attention that these policies should be in writing, we are making every endeavor to comply. The District is currently working on drafting policies that will meet the criteria set out in the Uniform Guidance and plan to have those in place by the end of the fiscal year. Responsible Person: Mike Beltnick, CFO Anticipated Completion Date: June 30, 2024

Recommendation Number - 2023-001 Correction Action - Develop a plan to reduce the food service fund’s net cash resources below its three (3) month average expenditures. Method of Implementation - Monitor net cash resources. Work with cafeteria staff and administration to identify and create plan to use funds on allowable purchases to reduce net cash. Responsible for Implementation - Mr. Matt Sheehan, Superintendent Estimated Completion Date - March 2024, ongoing

Name of Contact Person: Matt Lacy, Chief Financial Officer; Recommendation: We recommend the District verify a vendor's status by checking the System for Award Management (SAM) maintained by the General Services Administration before making purchases expected to exceed $25,000; Corrective Action: We will verify all vendors' status using the System for Award Management (SAM) maintained by the General Services Administration before making purchases expected to exceed $25,000.

Name of Contact Person: Matt Lacy, Chief Financial Officer; Recommendation: We recommend the District monitor the Child Nutrition profit made and ensure all expenditures used to operate the program are properly charged to the program; Corrective Action: We will ensure that all eligible costs are charged to the program and modernize the equipment to reduce the accumulated carry-over; Proposed Completion Date: Immediately.

The Rochester Schools will implement a plan which will eliminate discrepancies between meal counting at the homeroom level, reporting at the school level, and claims made at the state and federal levels. This implementation plan includes a heighten responsibility with data collection, multiple quality checks and data transfer. Procedures to prevent reoccurrence in the future are listed below:

Finding Number: 2023-004 Approval Of Expense Transactions Corrective Action Plan: A process was put in place in May 2023 to ensure that all principal approvals are documented in writing or electronic approval in the system which can be date stamped by the system. Payroll will not be run, nor grants submitted, until proper approval is received. Personnel Responsible for Corrective Action: Nachum Golodner, Academica Director of Accounting Anticipated Completion Date: June 30, 2024

Child Nutrition Cluster: National School Lunch Program (Assistance Listing # 10.555) School Breakfast Program (Assistance Listing # 10.553) Summer Food Service Program for Children (Assistance Listing # 10.559) Compliance Requirement: Eligibility Criteria Children from households with incomes at or below 130 percent of the Federal poverty level are eligible to receive meals or milk free under the School Nutrition Programs. Children from households with incomes above 130 percent but at or below 185 percent of the Federal poverty level are eligible to receive reduced price meals. Persons from households with incomes exceeding 185 percent of the poverty level pay the full price (7 CFR sections 245.2, 245.3, and 245.6; section 9(b)(1) of the NSLA (42 USC 1758 (b)(1)); sections 3(a)(6) and 4(e) of the CNA (42 USC 1772(a)(6) and 1773(e))). Condition A sample of 40 students receiving benefits were selected to be tested under the Child Nutrition Cluster program. Two students received free lunch benefits who should have received reduced lunch benefits. In this instance, income was incorrectly calculated when determining eligibility, causing an incorrect certification. Additionally, one student was denied lunch benefits but should have received free lunch benefits. Known and likely questioned costs were determined not to be material or exceed $25,000. The sampling methodology used was not statistically valid. Cause Adequate oversight of the eligibility determination process was not in place in order to identify mistakes in determining eligibility. Effect Without demonstrable, documented controls supporting compliance with Child Nutrition compliance standards, compliance with the requirements may not be assured. Recommendation The School District institute additional procedures to ensure that eligibility determinations are made correctly. The School District should ensure that the household number and income be compared to the National Income Eligibility Guidelines to calculate whether the student qualifies for free or reduced lunch. Corrective Action Plan The School District became Community Eligible in 2023-2024 and all students are now eligible to receive free meals without the requirement to submit an eligibility application. However, students may qualify for other benefits based on their eligibility for free or reduced priced meals. Beginning in 2023-2024, Hyde Park CSD is utilizing the service of the Capital Region BOCES Food Service Management Program which includes review and oversight of the eligibility applications to ensure compliance. Responsible School District Official Director of Food Services Completion Date June 30, 2024 Linda Steinberg, Assistant Superintendent for Finance and Operations