Corrective Action Plans

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

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 Program. 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))). The School District must: (a) 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). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. Condition/Context A sample of 40 students receiving benefits were selected to be tested under the Child Nutrition Cluster. Applications were viewed determining eligibility that are to be reviewed and signed by the Director of Food Services to ensure the eligibility status was deemed correct for each application. 24 applications were not documented as having been reviewed. Known and likely questioned costs were determined not to 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 should institute additional procedures to ensure that eligibility determinations are reviewed and accurate. Corrective Action Plan The School District is utilizing the service of the Capital Region BOCES Food Service Management Program. The service 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

Finding 2023-004- Eligibility- Reimbursements Request Auditor Description of Condition: The School District's support for the number of meals served did not agree to the meals requested on the reimbursement requests. The District should request reimbursement for the actual number of meals served and should maintain support for the number of meals served for each reimbursement request. The School District maintained records from a point-of-sale system, but those meals served could not be reconciled or agreed to the reimbursement requests for our sample of 3 claims. The lack of reconciliation or other records to explain the differences could have resulted in the School District over or under requesting reimbursement from Michigan Department of Education. Corrective Action Plan: The Business Office will work with the Food Service Director to implement procedures to ensure meals service data is retained and communicated to the entity requesting reimbursement for meals served. Responsible Person: Director of Finance and Director of Food Service. Anticipated Completion Date: June 30, 2024

Views of the Responsible Officials and Planned Corrective Actions: The Business Administrator will work closely with the new Food Service Director to verify and record any company/vendor that is paid with Federal money.

The District will monitor vendors to ensure they are able to accept federal monies. By Ashley Simmons, Accounts Payable clerk by 6/30/2024.

Finding: 2023-001 – Reporting – Meal Claim Reimbursement Noncompliance Auditor Description of Condition and Effect. Two of three meal claim reimbursement reports selected for testing did not agree to underlying meal count sheets and on all three reports tested, the District understated claims for one of its facilities. As a result of this condition, the District submitted inaccurate claims for reimbursement, resulting in a reimbursement less than what the District should have received. Auditor Recommendation. We recommend that the District thoroughly review its monthly reports to count sheets and familiarize itself with allowable reimbursement claims. Corrective Action. Management concurs with finding. The District will utilize a thorough review of entered data prior to certification of claims data. A secondary review of claims data will be reviewed by a District finance department staff to ensure proper claims data. Responsible Person: Emili Jones, Director of Business and Finance Anticipated Completion Date: November 1, 2023

Condition: During the testing of internal controls surrounding the child nutrition program claims reimbursement reporting, it was identified that review of the meal counts and monthly claims reports is not taking place. Planned Corrective Action: The 2022-23 school year returned to students having to pay for their school meals since COVID. The district had a FS bookkeeper who was hired in the spring of 2020. The 2022-23 school year was her first-time filing school meal claims based on if students were free, reduced, or full pay. She started by exporting student counts from Skyward then adjusting them for GSRP and Heartwood student meal claims. Since this was a manual process, a few errors occurred. This FS bookkeeper resigned in the spring of 2023. The district hired a new FS Bookkeeper. She will be exporting the count information directly from Skyward, then using an Excel spreadsheet to adjust for GSRP and Heartwood students. The FS Bookkeeper will enter the counts into School Meal Claims website. The counts will be reviewed by the FS Director who will complete the actual submission of the meal claims. The entire process will be audited by the district accountant monthly. Contact person responsible for corrective action: Tracey Wooden, CFO Anticipated Completion Date: 07/12/2023

Child Nutrition Cluster - Assistance Listing nos. 10.553 and 10.555 Recommendation: CLA recommends the District review and update policies and procedures over review of certain transactions to ensure that all federal grants with covered transaction have vendors reviewed for suspension and debarment status. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: All food service vendors will be checked for suspension and debarment on the Sam.gov website. Name(s) of the contact person(s) responsible for corrective action: Morgan Mueller, Bookkeeper Planned completion date for corrective action plan: July 1st 2023

Condition: In a population of 3 error prone applications selected for verification, exceptions were noted on 1 of the applications selected for verification. The 1 verification documentation received determined the student should be changed from reduced lunch to paid lunch and this change was not made. Plan: Management will review and implement procedures to ensure the free or reduced lunch status is properly updated during the application verification process. Anticipated Date of Completion: 6/30/2024 Name of Contact Person: LeeAnn Taylor, Assistant Superintendent of Finance & Business Operations Management Response: N/A

Condition: The determining official did not complete the form and did not sign the form for all applications selected. Plan: Management will review and implement procedures to ensure the verification forms are completed correctly. Anticipated Date of Completion: 6/30/2024 Name of Contact Person: LeeAnn Taylor, Assistant Superintendent of Finance & Business Operations Management Response: N/A

Material Weakness, Internal Control over Compliance Personnel Responsible for Corrective Action: Julie Whitmore, Director of Nutrition Services and Leon Hanhardt, Superintendent of Schools Anticipated Completion Date: June 30, 2024 Corrective Action Plan: The District will document the review of a sampling of eligibility determinations for program participants.

2023-002 - Child Nutrition Cluster - Special Tests and Provisions - Verification Condition Of the six households selected for testing of verification compliance, two were found to have been incorrectly calculated as being eligible for reduced price meals. Recommendation We recommend that the District review its controls related to verification in order to ensure that only eligible households receive free or reduced price meals. Comment on the Finding Recommendation The District is aware of the errors and has taken extra care with the verifications completed for the ongoing school year. Action Taken Kristy Alvord and Cindy Clark attended training in the Fall of 2023 that was conducted by the Kansas State Department of Education, regarding verification compliance. In addition, all verification calculations will be double-checked by a staff member who did not perform the initial calculation.

SIGNIFICANT DEFICIENCIES 2023-001 - Child Nutrition Cluster - Allowable Activities and Costs/Cost Principles and Reporting Condition During testing of the sponsor claim reimbursement reports, it was found that the District submitted inaccurate meal counts on two monthly reports. Recommendation We recommend that the District review its controls related to monthly reimbursement requests for the Child Nutrition Cluster in order to ensure that accurate meal counts are submitted. Comment on the Finding Recommendation The District is aware of the errors and will continue to strive to improve its processes and controls related to meal counts. Action Taken As of the date of this notice, staff members involved in recording manual meal counts for the Summer Food Service Program and Afterschool Snack Program have undergone training regarding the importance of submitting accurate numbers. In addition, meal counts are now required to be summed twice, in order to ensure that there are no calculation errors.

U.S. Department of Agriculture 2023-002 Child Nutrition Reporting Child Nutrition Cluster – Assistance Listing No. 10.553, 10.555, 10.559 Recommendation: CLA recommends the District implement a review procedure over reimbursement requests where someone other than the preparer reviews the claim to ensure counts agree back to supporting documentation prior to the reimbursement request being filed with the granting agency. In addition, due to the size and complexity of the reporting, we recommend the District review the compiling procedures for the schools to ensure the compilation procedure is complete and accurate. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The district is implementing an internal cross check procedure to prevent errors on future claims. Name(s) of the contact person(s) responsible for corrective action: Dr. Thomas Owens Planned completion date for corrective action plan: Ongoing.

Internal Controls over distribution of USDA Foods to recipients (Material Weakness) Response and Corrective Action Plan: In addition to strides made in FY23 towards correcting the documentation of recipients in Link2Feed, Brown Bag has continued to address it in FY24 by performing the following- 1) Build communication and relationships with the remaining sites still not documenting (16 of our current 77) 2) Issued emails and phone calls asking sites to update their records. 3) Making appointments and visiting all sites still not in compliance to make an in-person plea to comply. 4) As of November 1, issue written communications warning any remaining sites that food deliveries will cease at the end of the year for any remaining sites not in compliance. No exceptions. Participants will be invited to go to the closest open MBBP site in their area. 5) Management is actively trying to close the loop on the remaining MOU’s, including SAHA, which remains unsigned. Deliveries will cease to any sites not covered with an MOU at the end of calendar year. No exceptions. Responsible Person: Janice Roberts, Program Director, under the oversight of the Mercy Executive Director. Estimated Completion Date: July 1, 2023

Internal Controls over inventory management (Material Weakness) Response and Corrective Action Plan: The impact of COVID on the Mercy Brown Bag program's execution and associated inventory documentation was significant. It necessitated the restructuring of historical food distribution practices with recipients and the increase in food provided through the TEFAP program. Priority was given to distributing food to recipients, despite limited staffing caused by the increased operational workload and social distancing requirements. Starting in FY23, the program management initiated semi-annual inventory counts, which will continue into FY24 and beyond. Additionally, an Inventory Management System was implemented at the end of FY23 and will be used throughout FY24, starting on July 1, 2023. Responsible Person: Janice Roberts, Program Director, under the oversight of the Mercy Executive Director. Estimated Completion Date: July 1, 2023