Watkins Glen Central School DistrictLocal Government

Finding 2025-001 Issue Net Cash Resources Federal Agency U.S. Department of Agriculture Federal Program Child Nutrition Cluster Assistance Listing Number 10.553/10.555/10.559 Pass-Through Agency NYS Department of Education Criteria: The School Food Authority shall limit its net cash resources to an amount that does not exceed six months average expenditures for its School Lunch Fund or such other amount as may be approved by the NYS Department of Education in accordance with 7 CFR §210.9(b)(2). Condition: At June 30, 2025, net cash resources in the School Lunch Fund exceeded the allowable limit of cash by $130,028. At June 30, 2024, net cash resources in the School Lunch Fund exceeded the allowable limit of cash by $700,631. Cause: Revenues exceeded expenditures by $125,966 in the School Lunch Fund for the year ended June 30, 2025. Effect or Potential Effect: The School District is not in compliance with 7 CFR §210.9(b)(2). Questioned Costs: None. Context: The amount over the allowable limit of $376,780 in the amount of $130,028 at June 30, 2025, and compares with the amounts over the allowable limit in years ended June 30, 2024 of $700,631. Repeat Finding This Finding is a repeat of Finding 2023-002 and 2024-001. Recommendation: We recommend the School District review its net cash resources in the School Lunch Fund and develop a plan to reduce them to an allowable amount. Views of Responsible Officials of the Auditee: The School District is committed and will be diligent in prepared cost meals with high quality products. Regular cooked meals and expanded menu choices will be prepared which will result in an increase in expenses. There has been unpredictability with the increase of certain goods, and we expect this to continue into the 2025-2026 fiscal year as well. The School District also participates in the Community Eligibility Provision (CEP) which provides free breakfast and lunch to every student within the School District. Salaries for School Lunch employees have also been increasing year after year due to the increase of minimum wage in New York State. The minimum wage is expected to increase to $16.00 per hour and entry level wages have increased per contract. The School District does have a practice of transferring BOCES aid gained from the cost of the BOCES management contract to the School Lunch Fund; the aid will not be transferred in upcoming years. The School District has devised a NYSED approved plan to expend the excess funds in the School Lunch Fund through appropriating a substantial amount of fund balance to be planned for and used for the cafeteria and kitchen within the next planned capital project. We are currently in the planning phase of our next capital project with a vote anticipated during the 2025- 2026 fiscal year. If needed, we will examine other avenues to ensure we do not exceed the allowable limit of cash at year end.

Issue Net Cash Resources Federal Agency U.S. Department of Agriculture Federal Program Child Nutrition Cluster Assistance Listing Number 10.553/10.555/10.559 Pass-Through Agency NYS Department of Education Criteria: The School Food Authority shall limit its net cash resources to an amount that does not exceed three months' average expenditures for its School Lunch Fund or such other amount as may be approved by the NYS Department of Education in accordance with 7 CFR §210.9(b)(2). Condition: At June 30, 2024, net cash resources in the School Lunch Fund exceeded the allowable limit of cash by $700,631. At June 30, 2023, net cash resources in the School Lunch Fund exceeded the allowable limit of cash by $572,746. Cause: Revenues exceeded expenditures by $156,622 in the School Lunch Fund for the year ended June 30, 2024. Effect or Potential Effect: The School District is not in compliance with 7 CFR §210.9(b)(2). Questioned Costs: None. Context: The amount over the allowable limit of $185,586 in the amount of $700,631 at June 30, 2024, and compares with the amounts over the allowable limit in years ended June 30, 2023 and 2022 of $572,746 and $504,606, respectively. Repeat Finding This Finding is a repeat of Finding 2022-002 and 2023-002 Recommendation: We recommend the School District review its net cash resources in the School Lunch Fund and develop a plan to reduce them to an allowable amount. 2024-001 School Food Account - Net Cash Resources Child Nutrition Cluster - Continued Views of Responsible Officials of the Auditee: The School District is committed and will be diligent in preparing meals with high quality products. Regular cooked meals and expanded menu choices will be prepared which will result in an increase in expenses. There has been unpredictability with the increase of certain goods, and we expect this to continue into the 2024-2025 fiscal year as well. The School District also participates in the Community Eligibility Provision (CEP) which provides free breakfast and lunch to every student within the School District. Salaries for School Lunch employees have also been increasing year after year due to the increase of minimum wage in New York State as well as a new collective bargaining agreement that went into effect 7/1/2025. The minimum wage is expected to increase to $15.50 per hour. The School District does have a practice of transferring BOCES aid gained from the cost of the BOCES management contract to the School Lunch Fund; the aid will not be transferred in upcoming years. The School District has devised a NYSED approved plan to expend the excess funds in the School Lunch Fund through appropriating a substantial amount of fund balance to be planned for and used for the cafeteria and kitchen capital project. That capital project vote is scheduled for December 2024. If needed, we will examine other avenues to ensure we do not exceed the allowable limit of cash at year end.

2023-002 School Food Account - Net Cash Resources Child Nutrition Cluster Criteria: The School Food Authority shall limit its net cash resources to an amount that does not exceed three months' average expenditures for its School Lunch Fund or such other amount as may be approved by the NYS Department of Education in accordance with 7 CFR §210.9(b)(2). Condition:At June 30, 2023, net cash resources in the School Lunch Fund exceeded the allowable limit of cash by $572,746. At June 30, 2022, net cash resources in the School Lunch Fund exceeded the allowable limit of cash by $504,606. Cause: Revenues exceeded expenditures by $54,223 in the School Lunch Fund for the year ended June 30, 2023. Effect or Potential Effect: The School District is not in compliance with 7 CFR §210.9(b)(2). Questioned Costs: None. Context: The amount over the allowable limit of $219,645 in the amount of $572,746 at June 30, 2023, and compares with the amounts over the allowable limit in years ended June 30, 2022 and 2021 of $504,606 and $353,617, respectively. Repeat Finding This Finding is a repeat of Finding 2021-002 and 2022-002 Recommendation: We recommend the School District review its net cash resources in the School Lunch Fund and develop a plan to reduce them to an allowable amount. Views of Responsible Officials of the Auditee: The School District is committed and will be diligent in preparing meals with high quality products. Regular cooked meals with expanded menu choices will be prepared which will result in an increase in expenses. There has been unpredictability with the increase of certain goods, and we expect this to continue into the 2023-2024 fiscal year as well. The School District also participates in the Community Eligibility Provision (CEP) which provides free breakfast and lunch to every student within the district. Salaries for School Lunch employees have also been increasing year after year due to the increase of minimum wage in New York State. The minimum wage is expected to increase to $15 per hour. The School District does have a practice of transferring BOCES aid gained from the cost of the BOCES management contract to the School Lunch Fund; the aid will not be transferred in upcoming years. The School District has devised a NYSED approved plan to expend the excess funds in the School Lunch Fund through appropriating a substantial amount of fund balance to be planned for and used for the cafeteria and kitchen capital project. If needed, we will examine other avenues to ensure we do not exceed the allowable limit of cash at year end.

Section III Condition: At June 30, 2022, net cash resources in the School Lunch Fund exceeded the allowable limit of cash by $504,606. Criteria: The school food authority shall limit its net cash resources to an amount that does not exceed 3 months average expenditures for its School Lunch Fund or such other amount as may be approved by the New York State agency in accordance with ?210.19(a). Cause: Revenues exceeded expenditures by $197,131 in the School Lunch Fund for the year ended June 30, 2022. Effect: The School District is not in compliance with 7 CFR ?210.19(a). Recommendation: We recommend the School District review its net cash resources in the School Lunch Fund and develop a plan to reduce them to an allowable amount. Response: Due to the Pandemic, the school lunch program created different kinds of meals than would normally be provided with in-person breakfast and lunches. The prepared meals needed to be easily portable and produced in mass quantities all at the same time, resulting in less expense for cost of meals. Now that students are back in person, regular cooked meals will be prepared with an increase in expense. Salaries for school lunch employees have also been increasing year after year due to the increase of minimum wage in New York State. The minimum wage is expected to gradually increase to $15 per hour over the next few years. The School District does have a practice of transferring BOCES aid gained from the cost of the BOCES management contract to the School Lunch Fund; the aid will not be transferred in upcoming years.

At June 30, 2021, the Maintenance of Effort Compliance Calculator was not completed during the year, resulting in the District not being in compliance with the Special Education Cluster. The District must complete and submit the Maintenance of Effort Compliance Calculator for the Special Education Cluster on a yearly basis to ensure adequate compliance. The District personnel responsible for completing and submitting the calculator did not complete or submit the calculator timely and was not completed when requested during the audit. The School District is not in compliance with the compliance requirements for the Special Education Cluster. We recommend the School District complete and submit the maintenance of effort calculator. The District agrees with the cause, condition, and recommendation and will implement procedures to ensure that all applicable reporting is conducted on a timely basis and that all compliance requirements are met.