Finding Text
Program Name: Child Nutrition Cluster - CFDA# 10.553/10.555/10.559. Pass-through entity: Michigan Department of Education. Finding type: noncompliance. Criteria: Section 7 Part 210.14b of the Code of Federal Regulations requires the school district's school food authority to limit its net cash resources by an amount that does not exceed three months average expenditures or other amount approved by the State Authority. Condition: The District's Cafeteria fund balance exceeded three months average expenditures at June 30, 2022. Questioned Costs: None. Perspective/Context: At June 30, 2022, the District's Cafeteria Fund had approximately 9 months of average monthly expenditures in fund balance. Additionally, the District has an approved Excess Fund Balance Elimination Plan in place which has been approved by the Michigan Department of Education since June 30, 2019. The original plan was delayed due to pandemic shutdowns and the District has been working to reinvest the excess into the food service authority. However, supply chain issues have delayed the implementation. See management's response for additional information. Cause/Effect: Management did not monitor the net cash resources before the pandemic to ensure the Fund did not exceed three months average expenditures. Recommendation: The District should review the Cafeteria fund balance periodically to ensure fund balance will not have an excess of three months average expenditures at the end of the fiscal year. Management's response: Management continues to follow the approved Excess Fund Balance Elimination Plan. It is expected the equipment investment will be made in the upcoming fiscal year. Quarterly reviews of the Cafeteria fund balance are planned.