Finding 51360 (2022-001)

Significant Deficiency Repeat Finding
Requirement
P
Questioned Costs
-
Year
2022
Accepted
2022-11-20
Audit: 49049
Organization: Saranac Community Schools (MI)

AI Summary

  • Core Issue: The District's food service fund balance exceeds the allowable limit of three months of expenditures.
  • Impacted Requirements: A spending plan must be created and submitted to the Michigan Department of Education to reduce the excess fund balance.
  • Recommended Follow-Up: Monitor revenues closely, complete planned expenditures, and develop a spend-down plan to ensure compliance.

Finding Text

Findings--Financial Statement Audit Finding 2022-001 Considered a significant deficiency (repeat finding) Criteria: The District?s fund balance in the food service fund is required to be less than three months of food service expenditures. Condition: Saranac Community Schools currently has more than the allowable fund balance in the nonprofit food service fund. As a result, the District will be required to develop a spending plan to reduce the balance to an acceptable level during the 2022-2023 school year. The plan must be submitted to the Michigan Department of Education prior to implementation. Excess fund balance cannot be transferred to the general fund. Effect: At June 30, 2022 the District?s food service fund balance was greater than three months of expenditures. Cause: An increase in federal revenues from meal reimbursements caused a significant increase in fund balance. The District did not complete the planned equipment replacement and purchases. Recommendation: The District should monitor revenues more closely and adjust food service program to match revenues. Management should complete the planned expenditures needed to maintain acceptable fund balance. A spend-down plan should be developed and followed to reduce fund balance below acceptable levels. District?s response: The District concurs with the facts of this finding and is implementing procedures to prevent this in the future.

Corrective Action Plan

Saranac Community Schools Corrective Action Plan For the Year Ended June 30, 2022 Saranac Community Schools respectfully submits the following corrective action plan for the year ended June 30, 2022. Audit Period: June 30, 2022 District responsible individual to implement this plan: Jammie Sprank, Finance Director The findings from the June 30, 2022 schedule of findings and questioned costs is discussed below. The finding is numbered consistently with the number assigned in the schedule. Finding: Financial statement audit Finding 2022-001 ? Significant Deficiency Recommendation: The District should monitor revenues more closely and adjust food service program to match revenues. Management should complete the planned expenditures needed to maintain acceptable fund balance. A spend-down plan should be developed and followed to reduce fund balance below acceptable levels. Planned Corrective Action: Management agrees with the finding and we are in the process of developing a spend down plan. The spend down plan will include completion of the fixed asset purchases and other upgrades to equipment. Management is looking at changing food choices including increasing healthy food options as a means of matching expenditures with revenues. Planned Completion Date: The District's spend down plan is anticipated to be completed by June 30, 2023. Kitchen equipment availability is severely limited due to national supply chain delays. The installation of some equipment may be limited to times when school is not in session. Due to this the District may not complete the spend spend down by June 30, 2023.

Categories

Cash Management Procurement, Suspension & Debarment Significant Deficiency Equipment & Real Property Management

Other Findings in this Audit

  • 627802 2022-001
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
84.425 Education Stabilization Fund $551,968
10.555 National School Lunch Program $425,237
84.010 Title I Grants to Local Educational Agencies $105,669
10.553 School Breakfast Program $76,416
84.027 Special Education_grants to States $37,370
84.367 Improving Teacher Quality State Grants $30,812
84.424 Student Support and Academic Enrichment Program $9,975
10.649 Pandemic Ebt Administrative Costs $614
84.365 English Language Acquisition State Grants $150