Finding Text
U.S. Department of Agriculture Finding 2022-004: Child Nutrition Cluster Resource Management Procedures Pass-through entity: Michigan Department of Education CFDA/Assistance Listing Number(s): 10.555, 10.559, and 10.558 Award Numbers: COVID-19: 211971, 221971, 211961, 220910, 221961, 210904, 211920, 212010, 211925, 221920, 222010 Award Year Ends: June 30, 2021 and June 30, 2022 Specific Requirement: Resource Management and Special Tests ? General Program Management Criteria: Section 210.14(b) and 210.19(a)(1) of the Cost Principles of the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires a School District to limit its net cash resources in the Food Service Fund to the maximum allowable amount of three months of average expenditures. Questioned Costs: None. Condition: During our testing of the Child Nutrition Cluster net cash resources, we noted that the School District Food Service Fund net cash resources were in excess of maximum allowable amount. Context: As of June 30, 2022, the School District Food Service Fund net cash resources were in excess of the maximum allowable amount. Effect: The School District could receive reduced funding in future years if the condition continues. Cause: The School District served more meals than it had anticipated through the Child Nutrition Cluster Summer Food Service and Child and Adult Care Food Programs as a result of the COVID-19 pandemic. This caused a significant increase in funding, which resulted in excess fund balance. The School District had planned to reduce its Food Service Fund net cash resources below the maximum threshold, but due to timing, was unable to get proper approvals, order and receive purchased goods and/or services by the end of the fiscal year. Repeat Finding: This is a repeat finding. Recommendation: The School District should develop and complete a spend-down plan to ensure it reduces its Food Service Fund net cash resources below the maximum allowable amount. Views of Responsible Officials: The School District agrees with this finding.