Finding Text
#2024-003 National School Lunch Program – Assistance Listing No. 10.555; Grant period: Year Ended June 30, 2023; Pass-through entity name – Florida Department of Agriculture. Criteria – The National School Lunch Program (NSLP) federal award is to provide nutritious lunch services for school children and to encourage the domestic consumption of nutritious agriculture commodities. The NSLP grant was awarded to the School. Condition – During the year ended June 30, 2024, the School expended $6,291,540 of NSLP funds used by management to purchase a building which is not considered an allowable cost under the terms of the grant award. Cause – The use of $6,291,340 in NSLP funds for acquiring additional assets including a building, the construction of new kitchen and related facilities is considered to be a contractually non-reimbursable cost. Management made a decision to use the NSLP funds. A lack of independent organizational oversight is a contributing factor to allow the condition to exist. A material weakness in internal control is more fully described in Findings and Questioned Cost – Major Federal Award Program Audit #2024-004. Possible Effect – Due to the contractually unallowable use of the NSLP grant funds, $6,291,340 represents a School liability to be paid back to the grantor (Florida Department of Agriculture). Perspective Information – Although it was clearly intended as a temporary loan, until the State of Florida provides directions to the Organization, the contractually non-reimbursable use of NSLP funds to acquire additional assets including a building, the construction of new kitchen and related facilities was a decision made by management. The audited financial statements reported a ‘Due to Government’ liability in the amount of $6,291,340 in the Statement of Financial Position at June 30, 2024. Recommendation – The School and the Florida Department of Agriculture should decide on remedial actions including the possible repayment of $6,291,340. Views of Responsible Officials – Management of the School agrees with the findings and will coordinate with the State of Florida, Department of Agriculture the repayment of the contractually non-reimbursable use of funds.