Finding 979344 (2023-001)

Material Weakness
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2024-06-26
Audit: 310160
Auditor: M Kohn CPA PC

AI Summary

  • Core Issue: The school food service account was not used exclusively for food service operations, violating state and federal requirements.
  • Impacted Requirements: Non-profit operation of food services requires all revenues and expenditures to be accounted for separately.
  • Recommended Follow-Up: Establish a dedicated bank account for school food service and implement controls to prevent future compliance issues.

Finding Text

Criteria: An SFA is required to account for all revenues and expenditures of its non-profit school food service in accordance with state and federal 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: Management maintained accounting records for the school food service but failed to use the school food service account exclusively for the food service program as required. Management self-identified the issue, and selfcorrected as they became aware of the requirement. Questioned Costs: None noted. Repeat Finding: This is not a repeat finding. Cause: Management failed to identify the compliance requirement of maintaining fully separate accounting records for the school food service. Effect: Funds unrelated to the school food service were deposited in and withdrawn from the bank account used for the school food service. Recommendation: Management should maintain a bank account that is used exclusively for the school food service, and implement a system of controls that will mitigate the liklihood of future non-compliance. Views of Responsible Parties and Corrective Action Plan: Management concurs with the finding and has implemented a system to limit access to the school food service bank account. In addition, management has designated a responsible and capable employee to monitor the new system and to periodically review the terms, conditions and requirements governing any future grants to ensure compliance. Implementation of the corrective action is further evidenced by the bank account being used solely for school food service transactions once management recognized the issue.

Categories

No categories assigned yet.

Other Findings in this Audit

  • 402901 2023-001
    Material Weakness
  • 402902 2023-001
    Material Weakness
  • 402903 2023-001
    Material Weakness
  • 979343 2023-001
    Material Weakness
  • 979345 2023-001
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
10.555 National School Lunch Program $798,066
10.553 School Breakfast Program $336,103
10.558 Child and Adult Care Food Program $255,409
10.559 Summer Food Service Program for Children $253,690