Finding Text
Section III 2022-001 Net Cash Resources - Child Nutrition Cluster (CFDA #10.553, 10.555, and 10.559) Federal Award Findings and Questioned Costs Condition: At June 30, 2022, net cash resources in the School Lunch Fund exceeded the allowable limit by $352,026. Criteria: The school food authority shall limit its net cash resources to an amount that does not exceed 3 months average expenditures for its School Lunch Fund or such other amount as may be approved by the New York State agency in accordance with ?210.19(a). Cause/Effect: Expenditures in the School Lunch Fund were higher in the 2021-2022 fiscal year by 17.0% due to the return of students after the effects of the COVID-19 pandemic. As a result, the base used to calculate the allowable limit was considerably reduced. Also contributing to the excess cash resources was the higher federal reimbursement amounts, causing a 19.0% increase in revenue. As a result, School District is not in compliance with 7 CFR ?210.19(a). Prior Year Finding: This is a repeat finding, and was previously reported as 2021-002. Recommendation: We recommend the School District review its net cash resources in the School Lunch Fund and develop a plan to reduce them to an allowable amount. Management Response: The School District will review the financial activity with the School Nutrition Department to determine the best use of the surplus funds. Once the true scope of the alarming food supply chain and labor force issues are realized and addressed, funds will be used to support the purchasing of much needed equipment that will replace items that have reached their end of useful life. These purchases will support the ongoing capital work to replace equipment that would not be elilgible for New York State aid.