Finding 2301 (2023-001)

- Repeat Finding
Requirement
J
Questioned Costs
-
Year
2023
Accepted
2023-11-21
Audit: 3941
Organization: Pontiac Academy for Excellence (MI)
Auditor: Croskey Lanni PC

AI Summary

  • Core Issue: The Academy's fund balance in the Nonprofit School Food Service Account exceeds the limit of three months' average expenditures.
  • Impacted Requirements: This noncompliance violates 7 CFR 210.19(a)(2), which regulates fund balance limits.
  • Recommended Follow-Up: The Academy must submit a Plan of Action to the Michigan Department of Education for approval to address the excess fund balance and improve program quality.

Finding Text

REPEAT FINDING – 2022‐002, 2021‐001 & 2020‐002 Finding Type – Noncompliance with laws and regulations Program Income Criteria – In accordance with 7 CFR 210.19(a)(2), the Academy’s Nonprofit School Food Service Account’s (NSFSA) fund balance, or net cash resources, must not exceed three months’ average expenditures. Condition – The Academy’s NSFSA’s fund balance exceeded the allowable three months’ average expenditures balance as of June 30, 2023. The Academy had approximately 4.96 months of expenditures as fund balance as of June 30, 2023. The Academy will be required to submit a Plan of Action and obtain Michigan Department of Education’s (MDE) prior approval to improve the food quality or take other action designed to improve the program in accordance with 7 CFR 210.19(a)(2). Questioned Costs – None Cause – Unknown Effect – The Academy is not in compliance with U.S. Department of Agriculture regulations. Recommendation – The Academy should submit a Plan of Action and obtain Michigan Department of Education’s (MDE) prior approval to improve the food quality or take other action designed to improve the program in accordance with 7 CFR 210.19(a)(2). Auditee Response – The Academy agrees with the finding has a current Plan of Action to spend down its excess cash resources. The Academy has revised and implemented its internal controls in effort to resume compliance with respect to maintaining a fund balance less than three months’ average expenditures.

Corrective Action Plan

Finding and Recommendation - Finding: 2023‐001 (repeat finding 2022-002, 2021‐001 & 2020‐002) Finding Type: Noncompliance with laws and regulations. Condition: The Academy NSFSA’s fund balance exceeded the allowable three months’ average expenditures balance as of June 30, 2023. The Academy had approximately 4.96 months of expenditures as fund balance as of June 30, 2023. Recommendation: The Academy should ensure it has proper internal controls in place to comply with its annual external reporting requirements in accordance with state law. Corrective Action Plan - The management company for the Academy will work with the Academy leadership to increase expenditures in a manner necessary to spend down the excess fund balance in an allowable and timely fashion. The spend down plan will include improvements to the food service program, including adding an additional food service support position. The number of salad bar offerings and daily hot breakfast options will be increased for all grade levels. The Academy will also explore allowable options for spending funds on supplies, equipment and initiatives that will create sustainable improvements to the food service program for future years. Responsible Department - Finance department and Food Service department Responsible Persons - Melinda Benkovsky, VP of Finance Gwen Hovey, Food Service Coordinator Planned Completion Date (TBD or Date) - June 30, 2024

Categories

Cash Management Program Income Internal Control / Segregation of Duties

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
84.425 Education Stabilization Fund $1.17M
10.555 National School Lunch Program $46,437
84.367 Improving Teacher Quality State Grants $25,643
10.553 School Breakfast Program $19,725
84.424 Student Support and Academic Enrichment Program $16,531
84.010 Title I Grants to Local Educational Agencies $16,148
84.027 Special Education_grants to States $15,282
84.365 English Language Acquisition State Grants $5,997
93.778 Medical Assistance Program $985
10.558 Child and Adult Care Food Program $766
10.649 Pandemic Ebt Administrative Costs $628