Finding Text
Finding: The District has insufficient reconciling and monitoring activities over the School Nutrition Fund charges for services. Criteria: A properly designed system of internal control over financial reporting allows entities to initiate, authorize, record, process and report financial data reliably in accordance with generally accepted accounting principles (GAAP). The Office of Management and Budget 2022 Compliance Supplement states, ?An SFA is required to account for all revenues and expenditures of its non-profit school food service in accordance with state requirements. An SFA must operate its food services on a non-profit basis; all revenue generated by the school food service must be used to operate and improve its food services (7 CFR sections 210.14(a), 210.14(c), 210.19(a)(2), 215.7(d)(1), 220.2, and 220.7(e)(1)(i)).? Condition: The District does not have routine reconciliation and monitoring processes to ensure the District?s School Nutrition has properly recorded charges for services. The District does not reconcile the charges for services recorded in the District?s trial balance to the District?s subsidiary point of sale system and other sales that are not included in the point of sale system. Context: The District?s point of sale system and meal sales had an unreconciled difference of approximately $27,000. During the audit process, the District was requested by the audit team to investigate the difference. The District subsequently identified approximately $12,000 of vendor rebates that are separate from the point of sale process resulting in approximately $15,000 not identified. Effect: Revenue collected by the District for the Child Nutrition Program may not be posted to the proper fund. Errors could occur in reporting revenue and not be timely identified. Identification as a repeat finding: This is a repeat finding. Cause: The Food and Nutrition Services Department point of sale report for revenue from items sold does not reconcile to the Finance Department held trial balance of revenue accounts. A portion of the difference is vendor rebates recorded in revenue trial balance accounts. The remaining difference is unidentified. A process must be developed to ensure the operations of the Food and Nutrition Services Department are properly recorded in the District?s revenue trial balance accounts.Recommendation: We recommend the District continue to implement new processes in which reconciling the financial information of both departments is an assigned job duty to ensure the financial transactions are reconciled and monitored on a routine basis throughout the fiscal year.