Finding 517500 (2024-005)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2024
Accepted
2025-01-02
Audit: 335506
Organization: One City Schools, Inc. (WI)

AI Summary

  • Core Issue: One City Schools, Inc. failed to account for nonprofit school food service revenues and expenses separately, violating federal requirements.
  • Impacted Requirements: This finding reflects a material weakness in internal controls and noncompliance with 7 CFR, Section 210.14(c).
  • Recommended Follow-Up: Implement internal controls and create a separate accounting class for the program's funds to ensure compliance.

Finding Text

Federal Agency: Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553 and 10.555 Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Number(s): 2024-678022-DPI-SB-546, 2024-010014-DPI-NSL-547, 2024-010014-DPISK_NSLAE-566 Award Period: July 1, 2023 through June 30, 2024 Type of Finding:  Material Weakness in Internal Control over Compliance  Material Noncompliance (Modified Opinion) Criteria or specific requirement: According to 7 CFR, Section 210.14(c) a non-federal entity is required to account for all nonprofit school food service revenues and expenditures separately from other funds. Condition: One City Schools, Inc. did not account for nonprofit school food service revenue and expenses of the program in a separate class in its accounting software. Questioned costs: None Cause: Policies and procedures were put in place after the prior year single audit findings, but were not able to be incorporated for the current fiscal year under audit. Effect: There could be a unallowed profit made on the program. Repeat Finding: Yes (2023-008) Recommendation: Internal controls for accounting for nonprofit school food service funds should be implemented. A separate class in the accounting software for the program could be utilized. Views of responsible officials: One City Schools, Inc. agrees with the finding and will be implementing a separate class in its accounting software for the program’s revenue and expenses.

Corrective Action Plan

MATERIAL WEAKNESS 2024-005 Child Nutrition Cluster – Assistance Listing Number 10.553 and 10.555 Nonprofit school food service fund Recommendation: Internal controls for accounting for nonprofit school food services funds should be implemented. A separate class in the accounting software should be utilized. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: One City Schools did improve their accounting procedures in 2023-24 to begin using separate classes for food expenses and revenues. To further implement best practice One City Schools is utilizing guidance from DPI to identify and account for program versus nonprogram foods to ensure there is no unallowed profit made off the program. Written policies and procedures are being drafted and will be implemented. Name(s) of the contact person(s) responsible for corrective action: Janel Vertz, Finance Director Planned completion date for corrective action plan: June 2025 (with all fiscal year 2024-25 revenues and expenses retroactively evaluated and appropriately accounted for).

Categories

School Nutrition Programs Material Weakness Internal Control / Segregation of Duties Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 517497 2024-002
    Material Weakness Repeat
  • 517498 2024-003
    Material Weakness
  • 517499 2024-004
    Material Weakness Repeat
  • 517501 2024-002
    Material Weakness Repeat
  • 517502 2024-003
    Material Weakness
  • 517503 2024-004
    Material Weakness Repeat
  • 517504 2024-005
    Material Weakness Repeat
  • 517505 2024-002
    Material Weakness Repeat
  • 517506 2024-003
    Material Weakness
  • 517507 2024-004
    Material Weakness Repeat
  • 517508 2024-005
    Material Weakness Repeat
  • 1093939 2024-002
    Material Weakness Repeat
  • 1093940 2024-003
    Material Weakness
  • 1093941 2024-004
    Material Weakness Repeat
  • 1093942 2024-005
    Material Weakness Repeat
  • 1093943 2024-002
    Material Weakness Repeat
  • 1093944 2024-003
    Material Weakness
  • 1093945 2024-004
    Material Weakness Repeat
  • 1093946 2024-005
    Material Weakness Repeat
  • 1093947 2024-002
    Material Weakness Repeat
  • 1093948 2024-003
    Material Weakness
  • 1093949 2024-004
    Material Weakness Repeat
  • 1093950 2024-005
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
84.010 Title I Grants to Local Educational Agencies $131,523
10.553 School Breakfast Program $100,095
84.027 Special Education Grants to States $90,033
84.282 Charter Schools $88,766
10.555 National School Lunch Program $53,936
84.367 Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) $19,239
84.196 Education for Homeless Children and Youth $15,000
84.424 Student Support and Academic Enrichment Program $10,000
84.173 Special Education Preschool Grants $1,539