Waverly Central School District

Federal Agency: U.S. Department of Agriculture Federal Program: Child Nutrition Cluster Assistance Listing Numbe:r10.553/10.555/10.559 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 $483,522. At June 30, 2024, net cash resources in the School Lunch Fund exceeded the allowable limit by $839,352. Cause: Revenues exceeded expenditures by $103,712 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 was $483,522 at June 30, 2025, and compares with the amount over the allowable limit in year ended June 30, 2024, of $839,352. Repeat Finding: This Finding is a repeat of Finding 2023-002 and 2024-002. 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: School District management agrees with condition, cause, and recommendation. With this overage, the School District has purchased new equipment for the cafeteria. Since the district is CEP, there is no option to changing the revenue. The School District will continue upgrading the kitchens with the excess.

Finding 2024-002 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 Condition: At June 30, 2024, net cash resources in the School Lunch Fund exceeded the allowable limit cash by $839,352. 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 New York State agency in accordance with §210.19(a). Cause/Effect: The School District received a significant increase in the State reimbursements rate in the current year, outpacing the increase in expenses and contributing to an overall increase in the surplus for 2024. As a result, the School District continues to be out of compliance with 7 CFR §210.19(a). Questioned Costs: None known. Context: The School District was over the allowable limit by $839,352 at year end June 30, 2024, and increase of $183,635 from last year’s overage of $655,717. Repeat Finding: The finding is a repeat of finding 2023-002 from the prior year. 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. Management Response: School District management agrees with condition, cause, and recommendation. With this overage, the School District has purchased some new equipment for the cafeteria. Since the School District is CEP, there is no option to changing the revenue. The School District will continue upgrading the kitchens with the excess.

Finding 2023-002 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 Condition: At June 30, 2023, net cash resources in the School Lunch Fund exceeded the allowable limit cash by $655,717. 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 New York State agency in accordance with §210.19(a). Cause/Effect: Expenditures in the School Lunch Fund were less in the 2022-2023 fiscal year due to COVID-19. As a result, the base used to calculate the allowable limit was considerably reduced. Also contributing to the excess cash resources was an increase in the reimbursement rates, causing a 25% increase in revenue. As a result, the School District is not in compliance with 7 CFR §210.19(a). Questioned Costs: None known. Context: The amount over the allowable limit of $320,893 in the amount of $655,717 at June 30, 2023, and compares with the amounts over the allowable limit in years ended June 30, 2022 and 2021 of $509,953 and $260,989, respectively. Repeat Finding: The finding is a repeat of finding 2022-02 from the prior year. 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. Management Response: School District management agrees with condition, cause, and recommendation. With this overage, the School District has purchased some new equipment for the cafeteria. Since the School District is CEP, there is no option to changing the revenue. The School District will continue upgrading the kitchens with the excess.

Section III Federal Award Findings and Questioned Costs 2022-002 Net Cash Resources Condition: At June 30, 2022, net cash resources in the School Lunch Fund exceeded the allowable limit cash by $509,953. 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 New York State agency in accordance with ?210.19(a). Cause/Effect: Expenditures in the School Lunch Fund were less in the 2021-2022 fiscal year due to COVID-19. As a result, the base used to calculate the allowable limit was considerably reduced. Also contributing to the excess cash resources was an increase in the reimbursement rates, causing a 25% increase in revenue. As a result, the School District is not in compliance with 7 CFR ?210.19(a). Repeat Finding: The finding is a repeat of finding 2021-002 from the prior year. 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. Management Response: School District management agrees with condition, cause and recommendation. With this overage, the district has purchased 2 ice machines, a sixteen crate cooler, hot water dispenser and some office furniture. It is also the expectation that the reimbursement rate will be reduced for the 2023 year.

Net Cash Resources - Child Nutrition Cluster (CFDA #10.553, 10.555, and 10.559) Condition: At June 30,2021, net cash in the school fund exceeded the allowable limit cash by $260,989. 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/ Effect: 'Expenditures in the School Lunch Fund were less in the 2020-2021 fiscal year by 12% due to COVID-19. As a result, the base used to calculate the allowable limit was considerably reduced. Also contributing to the excess cash resources was the higher summer reimbursement rates, causing a 25% increase in revenue. As a result, 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. Management Response: School District management agrees with condition, cause, and recommendation. Two ovens and a milk cooler are being purchased with the excess funds. Responsible parties for this are Joseph Kilmer, Food Service Director and Kathy Rote, Purchasing Agent.