Finding Text
FINDING 2022-001 CASH MANAGEMENT (REPEAT FINDING) MATERIAL WEAKNESS Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553 & 10.555 Criteria Per 7 CFR 210.14(b) and 7 CFR 220.7(e)(1)(iv), the ?school food authority shall limit its net cash resources to an amount that does not exceed 3 months average expenditures for its nonprofit school food service or such other amount as may be approved by the State agency.? Condition Based on the School?s expense reporting, a three-month average of expenditures would be approximately $96,000. The School was carrying a balance in excess of the three months average of expenditures in all twelve months, including a balance of approximately $329,000 as of June 30, 2022, after subtracting prepaid balances. Cause The School has not properly monitored the balance of these funds to make sure funds were expended in a manner to allow for compliance with federal guidelines. Effect This material weakness in internal control resulted in the School having an excessive cash balance in its meal program funds and not being in compliance with 7 CFR 210.14(b) and 7 CFR 220.7(e)(1)(iv). Recommendation We recommend the School develop internal controls to allow for closer monitoring of the balance of these funds. We also recommend the School proactively communicate the cash management finding to the Indiana Department of Education to discuss a remedial plan of action.