Contoocook Valley Regional School District

2025-001 Unpaid Meal Balances (Material Weakness) Federal Agency: U.S. Department of Agriculture Pass-through Agency: New Hampshire Department of Education Cluster/Program: Child Nutrition Cluster Assistance Listing Numbers: 10.553, 10.555, 10.582 Passed-through Identification: N/A Compliance Requirement: Allowable Activities or Unallowed Activities Type of Finding: Internal Control over Compliance – Material Weakness Criteria or Specific Requirement: Federal regulations at 7 CFR 210.14(a) require School Food Authorities to maintain a nonprofit school food service, with revenues used solely for the operation and improvement of the food service program. Additionally, USDA Policy Memoranda SP 46-2016 and SP 23-2017 require School Food Authorities to implement and effectively enforce meal charge and overdue account policies to promote financial sustainability and program integrity. Condition: The School District has adopted meal charge and overdue account policies that align with USDA guidance. However, as of year-end, the Food Service Fund reported approximately $154,000 in unpaid student meal balances, representing a 23% increase over the prior year. In addition, the General Fund subsidized the Food Service Program by approximately 22% during the fiscal year. Cause: Although policies are in place, monitoring and enforcement controls over delinquent meal balances were not sufficiently robust to prevent the continued growth of unpaid accounts or to reduce the program’s reliance on General Fund subsidies. Effect: As a result, the School District is exposed to increased financial risk and reduced program sustainability, which may impair its ability to operate the food service program in compliance with nonprofit school food service requirements and may divert General Fund resources from other educational priorities. Questioned Costs: None identified. The finding relates to a deficiency in internal control over compliance; no instances of unallowable expenditures were identified during our testing. Identification as Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School District strengthen monitoring and enforcement of existing meal charge and overdue account policies, implement formal periodic financial reviews, and develop a corrective action plan to reduce unpaid balances and minimize General Fund subsidization. Views of Responsible Officials: Management’s views and corrective action plan are included at the end of this report.

The District has existing policies to address overdue meal charges: EFAA-Meal Charging and EFC-Free and Reduced-Price Lunch. Due to staff transitions over the last several years, these policies have not been adequately enforced. The following steps will be taken to correct this: • Central Office Oversight: The central office will take a more active role in ensuring policies are executed effectively. • Policy Review: Policies will be reviewed with all staff members responsible for their implementation. • Targeted Training: Comprehensive training will be provided to all involved personnel, specifically food service workers and building principals. • Compliance Monitoring: The central office will monitor adherence to these policies and provide ongoing support to staff. • Community Partnership: The District will increase coordination with non-profit charities to secure assistance for students in need. Additionally, current policies and practices will be reviewed and updated as necessary to ensure the desired outcomes are achieved.

2023-001 Lack of Documentation to Support Distribution of Wages (Significant Deficiency) Federal Agency: Department of Education Pass-through Agency: New Hampshire Department of Education Cluster/Program: Education Stabilization Fund Assistance Listing Number: 84.425U Passed-through Identification: #20220575 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Internal Control over Compliance – Significant deficiency Criteria or Specific Requirement: Federal regulations 2 CFR 200.303 states, the District, as a recipient of Federal funds, must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In addition, under 2 CFR 200.430, it states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must (1) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, (2) be incorporated into the official records of the non-Federal entity, (3) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, and (4) support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award or a federal award and non-Federal award. Condition: During our review of payroll charged to the grant, we noted one employee who did not have a signed contract or payrate form. Cause: Administrative oversight. Effect: The District did not have adequate documentation to support the distribution of the employee’s wages paid using grant funds. Questioned Costs: $95,699 Repeat Finding: No Recommendation: We recommend that documentation be retained to support the distribution of salaries and wages for all employees paid using grant funds. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.

Audit Finding Reference: 2023-001 Planned Corrective Action: Onboarding procedure is being changed where employees are not able to start working until a signed contract is on file in their HR file. Name of Contact Person and Completion Date: Brian Cisneros (Business Administrator) Michael Hatfield (HR Director) Anticipated Completion Date – 4/1/24

2023-002 Lack of Documentation to Support Vendor Payment (Significant Deficiency) Federal Agency: Department of Education Pass-through Agency: New Hampshire Department of Education Cluster/Program: Supporting Effective Instruction State Grants Assistance Listing Number: 84.367 Passed-through Identification: #20220933 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Internal Control over Compliance – Significant deficiency Criteria or Specific Requirement: Federal regulations 2 CFR 200.303 states, the District, as a recipient of Federal funds, must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: During our review of disbursements, no documentation was provided for one sample selected for testing. Cause: Administrative oversight. Effect: The District did not have adequate documentation to support the disbursement. Questioned Costs: $1,487 Repeat Finding: No Recommendation: We recommend that documentation be retained to support the disbursement for all invoices paid using grant funds. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.

Audit Finding Reference: 2023-002 Planned Corrective Action: Review of purchasing policy and federal procurement procedures with grant managers as well as the AP/Grant reporting staff. No purchase will be processed without proper documentation. Name of Contact Person and Completion Date: Brian Cisneros (Business Administrator) Anticipated Completion Date – 4/1/24