Finding Text
I ssue: Net Cash Resources
Federal Agency: U.S. Department of Agriculture
Federal Program: Child Nutrition Cluster
Assistance Listing Number: 10.553/10.555/10.559
Pass-Through Agency: NYS Department of Education
Criteria:
The School Food Authority shall limit its net cash resources to an amount that does not exceed
three months' average expenditures for its School Lunch Fund or such other amount as may be
approved by the NYS Department of Education in accordance with 7 CFR §210.9(b)(2).
Condition:
At June 30, 2024, net cash resources in the School Lunch Fund exceeded the allowable limit by
$1,298,609.
Cause:
For the year ended June 30, 2024 and 2023, revenues exceeded expenditures in the School
Lunch Fund by $175,273 and $382,261, respectively.
Effect or Potential Effect:
The School District is not in compliance with 7 CFR §210.9(b)(2).
Questioned Costs:
None.
Context:
The School District was $1,298,609 over the allowable limit at year end June 30, 2024
compared to $1,254,282 over for the year ended June 30, 2023. Repeat Finding:
This finding is a repeat of Finding 2023-001 from the prior year.
Recommendation:
We recommend the School District review its net cash resources in the School Lunch Fund and
develop a plan to reduce them to an allowable amount.
Response/Board Action:
The Elmira City School District has been cited for excessive net cash resources since the onset
of the pandemic in 2021 and correlated increased aid reimbursements for the school feeding
programs.
The most notable increase to revenues for the 2023-2024 fiscal year was interest income. The
districts interest revenues were 95% greater than the 2022-2023 school year. Overall revenues
within the School Lunch fund only increased 4.69% over the 2022-2023 school year, while
expenditures increased at 10.64%.
As part of our 2022-2023 corrective action plan, a new contract was entered within our labor
union for cafeteria workers. Those efforts resulted in a 37.48% expenditure increase in 2023-24
to salaries and benefits over the 2022-23 school year. The district also can demonstrate that we
closed the gap between revenues and expenses by roughly 5% over the prior fiscal year. This is
the result of increased spending on equipment purchases, food purchases and wages as so
outlined in prior corrective action plans. Plans for the 2024-25 fiscal year include a projected budget that equates to over 22% spending
over the 2023-24 expenditures. Those increases are mainly in our equipment and salary
budgets. The district has plans to put out a new capital project to vote in December of 2024.
While many building and facility upgrades are included, the district plans to utilize the school
lunch fund for any equipment purchases related to our cafeterias within our facilities as so
allowed.
Our School Food Service Director, in conjunction with our School Lunch Manager will assist
in the continued upgrades to school serving lines, and new initiatives within our serving
programs in response to population changes and needs. They will also continue our equipment
replacement cycle throughout our buildings to ensure outdated equipment is replaced timely.
The School Business Official will work in conjunction with the Food Service Director and
Manager to manage fund balance and expenditures throughout the year. In prior years fund
balance has been appropriated to afford increased food and equipment expenses. To combat the
net cash resources, we will first look to move funds within the existing budget to afford those
increased expenses, oppose to moving monies from fund balance.
Our plans, as so outlined above, are targeting a completion date of this finding in June 2025.