Finding 521039 (2024-002)

Information on the Federal Program U.S. Department of Agriculture – Passed through State Department of Agriculture – Child Nutrition Cluster (Federal Award Year 7/1/23 to 6/30/24) School Breakfast Program (Assistance Listing 10.553) (FAIN 241NJ304N1099) National School Lunch Program (Assistance Listing 10.555) (FAIN 241NJ3041099) National School Lunch Program – Commodities (Assistance Listing 10.555) (FAIN 241NJ3041099) After School Snack Program (Assistance Listing 10.555) (FAIN 241NJ3041099) COVID Supply Chain Assistance Award (Assistance Listing 10.555) (FAIN 241NJ3041099) Criteria or Specific Requirement CFR Section 210.14 Resource Management (b) Net cash resources. The school food authority shall limit its net cash resources to an amount that does not exceed 3 months average expenditures for its nonprofit school food service or such other amount may be approved by the State agency in accordance with CFR Section 210.19(a). Condition The School District’s Food Service Fund Net Cash Resources exceeded its three months average expenditures by $1,552,933.84. Questioned Costs There are no questioned costs related to this finding. Context Per the calculation of the Food Service Fund’s Net Cash Resources, Net Cash Resources at June 30, 2024 were $2,628,593.11 and its three months average expenditures were $1,075,659.27, resulting in an excess of $1,552,933.84. Effect or Potential Effect The School District is not in compliance with CFR section 210.14 and requirements as prescribed the Office of School Finance, Department of Education, State of New Jersey Audit Program. Cause Due to the COVID 19 pandemic, the School District’s Food Service Fund federal and state subsidy revenues increased significantly during fiscal year ended June 30, 2022, thereby resulting in excess net cash resources as of June 30, 2022, 2023 and 2024. Identification as a Repeat Finding The condition existed in the immediately preceding fiscal year – See Finding No. 2023-001 Recommendation That the School District develop a plan to reduce the Food Service Fund’s Net Cash Resources below its three months average expenditures. View of Responsible Officials and Planned Corrective Action The responsible officials agree with the finding and will address the matter as part of their corrective action plan.