Finding Text
Criteria: According to 7 CFR Section 210.14(a), a school food authority shall maintain a nonprofit school food service. In addition, 7 CFR Section 210.14(b) states that the school food service authority shall limit its net cash resources to an amount that does not exceed three months' average expenditures for its nonprofit school food service. Condition: The District has food service net cash resources in excess of the three month average expenditure carryover limit. Questioned Costs: None. Context: The District has net cash resources of $307,761, and the three month average expenditures is $90,211, resulting in excess net cash resources of $217,550. Effect: The effect of an excessive profit in the food service program is that federal funds intended to feed school children could be used to subsidize other programs. Cause: The District was unaware the program has been operating at a profit. Recommendation: We recommend that the District monitor the profit made by the food service program. All allowable expenditures used to operate the program should be charged to the program. In addition, the District needs to adopt a plan to spend the accumulated cash reserves. Management's Response: The District will continue to allocate indirect costs to eliminate the surplus.