Finding Text
U.S. Department of Education Finding 2022-001: Child Nutrition Cluster Resource Management Procedures Pass-through entity: Michigan Department of Education ALN: 10.553, 10.555, and 10.559 Award Numbers: 211971 COVID-19, 221971 COVID-19, 211961 COVID-19, 211965 COVID-19, 220910 COVID-19, 221961 COVID-19, 220904 COVID-19, and Entitlement Commodities Award Year Ends: June 30, 2022 Specific Requirement: Special Tests ? Net cash resources Criteria: Section 210.14(b) and 210.19(a)(1) of the Cost Principles of the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires a School District to limit its net cash resources in the Food Service Fund to the maximum allowable amount of three months of average expenditures. Questioned Costs: None. Condition: During our testing of the Child Nutrition Cluster net cash resources, we noted that the School District Food Service Fund net cash resources were in excess of the maximum allowable amount. Context: As of June 30, 2022, the School District Food Service Fund net cash resources were in excess of the maximum allowable amount. Effect: The School District could receive reduced funding in future years if the condition continues. Cause: The School District had planned to reduce its Food Service Fund net cash resources below the maximum threshold, but it was unable to get proper approvals, order and receive purchased items and/or services by the end of the fiscal year. Due to the supply chain issues that the entire United States was experiencing, items were not delivered before the fiscal year end. Repeat Finding: A similar finding was reported during the single audit for the year ended June 30, 2021. Recommendation: The School District should develop and complete a spend-down plan to ensure it reduces its Food Service Fund net cash resources below the maximum allowable amount. Views of Responsible Officials: The School District agrees with this finding.