Finding 1218288 (2023-010)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2026-06-24
Audit: 404529
Organization: Lead Academy (AL)

AI Summary

  • Core Issue: The school has excess net cash resources of $401,854, exceeding the limit by $261,641.
  • Impacted Requirements: This violates 7 CFR Subpart C – 210.14(b), risking forfeiture of Child Nutrition Program funds.
  • Recommended Follow-Up: Management should develop a plan for using the excess funds or consult with the Alabama Department of Education for guidance on returning the funds.

Finding Text

Item 2023-010 Net Cash Resource Compliance Child Nutrition Program ALN# 10.555 and 10.553 US Department of Agriculture Passed through Alabama State Department of Education Federal Grant/Contract Number: 802 Grant period – 2023 Criteria - Per 7 CFR Subpart C – 210.14(b), the school food authority shall limit its net cash resources to an amount that does not exceed its 3-month average expenditures for its nonprofit school food service or such other amount as may be approved by the State agency in accordance with 7 CFR Subpart D – 210.19(a). Condition – The cumulative net cash resources as of September 30, 2023, totaled $401,854 which exceeded the net cash resource limit by $261,641. Cause – The Academy has not formulated a plan for the use of excess net cash resources and has not communicated with the Alabama Department of Education to determine the remedy for its excess net cash resources. Effect – The school is not in compliance with 7 CFR Subpart C – 210.14(b). Noncompliance with this guidance exposes the school to the risk of forfeiture of Child Nutrition Program funds. Questioned Costs – None. Recommendation – It is recommended that management and the Academy review potential use for the net cash resources or communicate with the Alabama Department of Education for appropriate return of funds. Management’s Response - Management has reviewed and accepted the finding. See “Corrective Action Plan”.

Corrective Action Plan

Responsible Parties: Erik Estill and Russell Raney Finding: The child nutrition program cumulative net cash resources as of September 30, 2023, totaled $401,854 which exceeded the 3-month net cash resource limit by $261,641. Corrective Action: The child nutrition program accumulated a large net cash resource balance during the COVID pandemic and the USDA extension of the seamless summer feeding program. During the ALSDE review of the FY 2024 financial statement submission and the required CNP financial profile submission, the school was notified of the net cash resource balance and was required to submit a detailed spenddown plan to bring net cash resources under the 3-month limit. The spend-down plan was approved by the ALSDE, and the school is currently operating under the plan. The spend-down plan was revised by the school, reviewed and approved by the ALSDE in conjunction with the FY 2025 financial statement submission. Expected Completion Date: August 4, 2025

Categories

School Nutrition Programs

Other Findings in this Audit

  • 1218277 2023-007
    Material Weakness Repeat
  • 1218278 2023-008
    Material Weakness Repeat
  • 1218279 2023-007
    Material Weakness Repeat
  • 1218280 2023-008
    Material Weakness Repeat
  • 1218281 2023-009
    Material Weakness Repeat
  • 1218282 2023-010
    Material Weakness Repeat
  • 1218283 2023-009
    Material Weakness Repeat
  • 1218284 2023-010
    Material Weakness Repeat
  • 1218285 2023-009
    Material Weakness Repeat
  • 1218286 2023-010
    Material Weakness Repeat
  • 1218287 2023-009
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
84.425 COVID-19 EDUCATION STABILIZATION FUND $581,119
84.010 TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES $223,214
10.553 SCHOOL BREAKFAST PROGRAM $169,977
84.027 SPECIAL EDUCATION GRANTS TO STATES $86,736
84.367 SUPPORTING EFFECTIVE INSTRUCTION STATE GRANTS (FORMERLY IMPROVING TEACHER QUALITY STATE GRANTS) $56,432
10.555 NATIONAL SCHOOL LUNCH PROGRAM $26,712
84.424 STUDENT SUPPORT AND ACADEMIC ENRICHMENT PROGRAM $15,640
84.027 COVID-19 - SPECIAL EDUCATION_GRANTS TO STATES $6,885
96.001 SOCIAL SECURITY DISABILITY INSURANCE $80