Finding Text
2022-001 Material Noncompliance (Special Test & Provisions) Federal Program: Child Nutrition Cluster ALN Number(s): 10.553 & 10.555 Federal Agency: U.S. Department of Agriculture Pass-through Entity: Michigan Department of Education Pass-through Number: 211971, 221971, 211961, 221961 and 220910-2022 (COVID-19) Criteria: The USDA requires that the ending balance of the non-profit school food service fund does not exceed three months? average of operating expenses [7 CFR Part 210.14(b)]. Condition: As of June 30, 2022, the District?s fund balance exceeded three months? average of operating expenses. Cause: This condition appears to be the result of additional revenues received from the Summer Seamless Option (SSO) under the National School Lunch and National School Breakfast Programs. Effect: As a result of this condition, the District did not fully comply with USDA fund balance requirements. Questioned Costs: None Perspective Information: The District?s fund equity of $322,143 at fiscal year-end exceeded the allowable three months of expenditures threshold by $220,331. Recommendations: We recommend the District closely monitor its financial activity for the year ended June 30, 2023 to ensure that fund balance is reduced to an appropriate level. Views of Responsible Officials: The Business Manager has created and submitted a spend down plan that has been approved by the Michigan Department of Education. The District expects adherence to this plan will reduce the fund balance within the Food Service Fund to an appropriate level for the year ending June 30, 2023. The District has approved the purchase of equipment that will cost $237,771 and had anticipated that it would be in service by June 30, 2022. However, there have been delays in receiving the equipment and therefore the District was unable to expend resources on the equipment prior to June 30, 2022.