Finding Text
Criteria: California Department of education Management Bulletin SNP-27-2015 and CACFP-07-2015 require educational agencies operating multiple child nutrition programs to separately account for program revenue and expenses. Condition: During our review expenditures we discovered that the District does not track expenses separately for Child Nutrition Program and Child and Adult Care Food Program (CACFP). The District does not maintain separate invoices, and they do not have an established interprogram vending agreement. Context: Condition was noted in fiscal year 2024-25, occurring in the Cafeteria Fund (Fund 13). Questioned Costs: District overcharged the National School Lunch Program $844,729 and undercharged CACFP. Cause: The District does not have adequate controls in place to ensure that direct costs and indirect costs are consistently allocated to all categorical programs. Effect: Common, shared expenses are not being charged in an equitable, logical manner between programs. Recommendation: The District has been working with consultants and state auditors to establish an interprogram vending agreement to properly move expenses from resource 5310 to 5320 each month or establish controls to track invoices separately for each program. We recommend that once they have determined how these expenses will be tracked that they immediately implement them and ensure that expenses are properly allocated going forward. Views of Responsible Officials: The District acknowledges the finding and is committed to strengthening internal controls over expenditure tracking within the Child Nutrition Program to ensure compliance with all applicable federal and state requirements. Historically, the District rolled up related expenditures through the SACs process. Based on the auditors’ guidance, the District will now track and report these expenses separately to improve transparency and ensure proper classification. The District does not anticipate any financial impact as a result of this change, as it represents a reclassification of costs rather than the incurrence of new expenses. Additionally, the District has been working collaboratively with consultants and state auditors to develop and implement an appropriate inter program vending agreement between the National School Lunch Program and the Child and Adult Care Food Program. This agreement will support the proper allocation and monthly transfer of shared costs between the respective program resources. Additionally, the District will establish improved procedures to ensure expenses and invoices are tracked and maintained separately for each nutrition program, allowing for consistent and equitable cost distribution.