Finding Text
2022-002 Immaterial 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 $256,350 at fiscal year-end exceeded the allowable three months of expenditures threshold by $113,563. Recommendations: We recommend the District closely monitor its budget for the year ended June 30, 2023 to ensure that fund balance is reduced to an appropriate level. Views of Responsible Officials: The Food Service Director and Finance Director have a spend down plan in place and is working on purchasing new equipment, which includes new refrigerators and milk coolers. The District expects these updates to reduce the fund balance within the food service fund to an appropriate level for the year ending June 30, 2023.