Finding 2023-004 - Corrective Action Plan
CHSD - 2022-2023 Audit Findings
Finding 2023-004 – SPECIAL TESTS AND PROVISIONS (repeat comment)
Type: Significant Deficiency in Internal Control / Noncompliance
Program: Child Nutrition Cluster (ALN 10.553, 10.555 and 10.559)
Condition: As of year-end the District had a fund balance in the non-profit food service fund in excess
of three months’ operating expenses by approximately $157,881.
Criteria: The USDA requires that the District limit its net cash resources to an amount that does not
exceed 3 months average expenditures of the non-profit food service fund per
requirements in 7 CFR Part 210.14(b).
Cause: This condition was caused by the meal claims increasing and having more
reimbursements come in than anticipated.
Corrective action to be taken:
Over the 2023-2024 school year, the District will continue to leverage the excess fund balance to
improve the quality of the food service program. Efforts to address the ongoing excess fund balance
condition are ongoing and, while planning started in the 2022-2023 school year, an aggressive food
service capital reinvestment project is scheduled to be completed in the 2023-2024 school year. This
$220,000+ project will address equipment replacement and student service improvements in both the
High School and the Middle School. The spend down associated with this project is anticipated to offset
the excess fund balance on June 30, 2023, as noted in this finding. However, anticipating the potential
for continued Food Service Program funding support at a state and federal level, the CHSD food service
department will continue to monitor the fund balance with the goal of proactively managing any
forecasted excess balance by continuing to offer more new food choices and improve the quality of the
food served (including more fresh produce and better-quality ingredients). These improvements will
continue to be in conjunction with the Michigan Department of Education's Office of School Support
Services which will again approve the spending plan.
The corrective action timeline is as follows:
The corrective action is effective immediately and encompasses the ongoing efforts on the part of the
District to comply with program criteria while balancing unpredictable statutory revenue streams against
spending forecasts in the highly volatile food service market conditions. The District anticipates
compliance with the Fund Balance condition set forth in the program by 6-30-2024.
District Leader Responsible for Corrective Action Plan:
The Food Service Administrator will be responsible for ensuring compliance with this corrective action.
Respectfully submitted,
Marc Forrest, Director of Finance