Finding Text
2023-003 – EXCESS FUND BALANCE IN FOOD SERVICE FUND (repeat finding)
Type: Material Weakness in Internal Control / Noncompliance – Special Tests and Provisions
Program: Child Nutrition Cluster (ALN 10.553 and 10.555)
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 $270,525.
Criteria: The USDA requires that the District limit its net cash resources to an amount that does not exceed a 3 month average of expenditures in the non-profit food service fund per requirements in 7 CFR Part 210.14(b).
Cause: This condition was caused by an increase in meals claimed for reimbursement, which resulted in more reimbursement revenue than anticipated.
Effect: The District will be required to develop a spending plan for reducing the balance to an acceptable level during the following school year. The plan must be submitted to the Michigan Department of Education (MDE), Office of School Support Services for prior approval.
Recommendation: We recommend that the District develop a spending plan as required by MDE and submit the plan at their earliest convenience.
Management’s Resp: We are in agreement with this finding. The district is now working on a spend down plan to enhance the Food Service Program.