Finding 1080771 (2023-001)

Finding No. 2023-001 Information on the Federal Program U.S. Department of Agriculture – Child Nutrition Cluster (Federal Award Year 7/1/22 to 6/30/23), passed through New Jersey State Department of Agriculture: School Breakfast Program (Assistance Listing Number 10.553) (FAIN - 231NJ304N1199) National School Lunch Program (Assistance Listing Number 10.555) (FAIN - 231NJ304N1199) National School Lunch Program - Food Distribution Program (Assistance Listing Number 10.555) (FAIN - 231NJ304N1199) National School Lunch Program - Supply Chain Assistance Funding (Assistance Listing Number 10.555) (FAIN - 221NJ344N8903) Summer Food Service Program (Assistance Listing Number 10.559) (FAIN – 231NJ304N1199) Criteria or Specific Requirement CFR Section 210.14 Resource Management (b) Net cash resources. The school food authority shall limit its net cash resources to an amount that does not exceed 3 months average expenditures for its nonprofit school food service or such other amount may be approved by the State agency in accordance with CFR Section 210.19(a). Condition The School District’s Food Service Fund Net Cash Resources exceeded its three months average expenditures by $385,159.09. Questioned Costs None. Context While performing the calculation to determine if the Food Service program is running at a nonprofit status, it was determined that the net cash resources totaled $1,234,702.85 at June 30, 2023 which exceeded the three months average expenditures of $849,543.76 calculated using the sample Net Cash Resources Schedule in the format provided by the U.S.D.A. Effect or Potential Effect The School District is not in compliance with CFR section 210.14 and requirements as prescribed the Office of School Finance, Department of Education, State of New Jersey Audit Program. Cause The School District was monitoring the finances of its Food Service Fund and had a plan to reduce the net cash resources; however, delay in procurement process, as well as additional supply chain assistance funding received caused the net cash resources to be above the three month’s average expenditures. Identification as a Repeat Finding Not applicable. Recommendation The School District continue to monitor the finances of its Food Service Fund and follow up the plan to reduce the net cash resources below its three month average expenditures. 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.