Finding Text
Finding Number: 2024‐001
Repeat Finding: No
Program Name/Assistance Listing Title: Child Nutrition Cluster
Assistance Listing Numbers: 10.553, 10.555, 10.559
Federal Agency: U.S. Department of Agriculture
Federal Award Numbers: 6AZ300400, 7AZ300AZ3
Pass‐Through Agency: Arizona Department of Education
Questioned Costs: $58,433
Type of Finding: Noncompliance, Significant Deficiency
Compliance Requirement: Allowable Costs/Cost Principles
Criteria
Under 2 CFR §200.303, the District is required to establish and maintain effective internal controls
over the federal award that provides reasonable assurance that the District is managing the federal
award in compliance with federal statutes, regulations, and the terms and conditions of the federal
award. Additionally, 2 CFR §200.439 requires capital expenditures for special purpose equipment
with a unit cost of $5,000 or more to have the prior written approval of the Federal awarding agency
or pass‐through entity. This includes ensuring a Capital Expenditure Pre‐Approval Request Form is
submitted to Arizona Department of Education (ADE) for approval prior to purchasing equipment that
is not included on ADE's Food and Nutrition Service approved equipment list.
Condition
The District did not submit a Capital Expenditure Pre‐Approval Request Form to ADE for approval
prior to purchasing equipment items not on the ADE Pre‐Approved Capital Equipment list.
Cause
The District was unaware that it was required to get pre‐approval from ADE for this type of purchase.
Effect
The District charged unallowable costs to the program.
Context
The District purchased two software systems related to the CNC POS for $20,920 and $29,692, and
one garbage disposal for $7,821, without submitting a Capital Expenditure Pre‐Approval Request
Form to ADE for approval prior to purchasing items not on the ADE Pre‐Approved Capital Equipment
list. The sample was not intended to be, and was not, a statistically valid sample.
Recommendation
Management should review all transactions to ensure that program costs are allowable and in
adherence to applicable federal requirements.
Views of Responsible Officials
See Corrective Action Plan.