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Finding 2025-001 Issue 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 six 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, 2025, net cash resources in the School Lunch Fund exceeded the allowable limit of cash by $130,028. At June 30, 2024, net cash resources in the School Lunch Fund exceeded the allowable limit of cash by $700,631. Cause: Revenues exceeded expenditures by $125,966 in the School Lunch Fund for the year ended June 30, 2025. Effect or Potential Effect: The School District is not in compliance with 7 CFR §210.9(b)(2). Questioned Costs: None. Context: The amount over the allowable limit of $376,780 in the amount of $130,028 at June 30, 2025, and compares with the amounts over the allowable limit in years ended June 30, 2024 of $700,631. Repeat Finding This Finding is a repeat of Finding 2023-002 and 2024-001. 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. Views of Responsible Officials of the Auditee: The School District is committed and will be diligent in prepared cost meals with high quality products. Regular cooked meals and expanded menu choices will be prepared which will result in an increase in expenses. There has been unpredictability with the increase of certain goods, and we expect this to continue into the 2025-2026 fiscal year as well. The School District also participates in the Community Eligibility Provision (CEP) which provides free breakfast and lunch to every student within the School District. Salaries for School Lunch employees have also been increasing year after year due to the increase of minimum wage in New York State. The minimum wage is expected to increase to $16.00 per hour and entry level wages have increased per contract. The School District does have a practice of transferring BOCES aid gained from the cost of the BOCES management contract to the School Lunch Fund; the aid will not be transferred in upcoming years. The School District has devised a NYSED approved plan to expend the excess funds in the School Lunch Fund through appropriating a substantial amount of fund balance to be planned for and used for the cafeteria and kitchen within the next planned capital project. We are currently in the planning phase of our next capital project with a vote anticipated during the 2025- 2026 fiscal year. If needed, we will examine other avenues to ensure we do not exceed the allowable limit of cash at year end.