Finding 1105223 (2024-001)

U.S. DEPARTMENT OF AGRICULTURE PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION CHILD NUTRITION CLUSTER - AL NUMBERS 10.553 AND 10.555 PASS-THROUGH NUMBER 2202 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 2024-001. Allowable Costs/Cost Principles Criteria or specific requirement: Office of Management and Budget (OMB) 2 CFR part 200, subpart E – Cost Principles, establishes principles for determining the allowable costs incurred by the District under federal awards. Such costs are to be necessary and reasonable for the performance of the federal award. Condition: In our test of non-payroll expenditures, we identified unallowable costs totaling $8,217 that were paid from the Child Nutrition program. Cause: Lack of internal controls and management oversight over program expenditures. Effect or potential effect: Unallowable costs of $8,217 were paid from Child Nutrition funds. Questioned costs: The amount of questioned costs was $8,217. Context: An examination of 13 Child Nutrition non-payroll expenditures totaling $45,852 from a population of 115 checks totaling $692,615. Identification as a repeat finding: No Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education- Child Nutrition Unit (DESE-CNU) for guidance regarding this matter and implement proper controls over program expenditures. Views of responsible officials: The Chief Financial Officer (CFO) and the Child Nutrition Director (CND) will take more care to ensure that all expenditures are properly classified per the Arkansas Public School Computer Network manual. If at any time the CFO and CND are unsure if an expense is allowable, the CND will contact the Child Nutrition Unit at DESE for guidance prior to purchasing. The District will contact DESE for guidance regarding this matter and will implement proper controls over program expenditures moving forward.