Carteret Board of EducationLocal Government

Finding 2024-001 (Other Matter): The District’s net cash resources in the Food Service Fund exceeded three months average expenditures.

Finding 2024-001 (Other Matter): The District’s net cash resources in the Food Service Fund exceeded three months average expenditures.

Finding 2024-001 (Other Matter): The District’s net cash resources in the Food Service Fund exceeded three months average expenditures.

Finding 2024-001 (Other Matter): The District’s net cash resources in the Food Service Fund exceeded three months average expenditures.

Finding 2024-001 (Other Matter): The District’s net cash resources in the Food Service Fund exceeded three months average expenditures.

Finding 2024-001 (Other Matter): The District’s net cash resources in the Food Service Fund exceeded three months average expenditures.

Finding 2024-001 (Other Matter): The District’s net cash resources in the Food Service Fund exceeded three months average expenditures.

Finding 2024-001 (Other Matter): The District’s net cash resources in the Food Service Fund exceeded three months average expenditures.

Finding 2024-001 (Other Matter): The District’s net cash resources in the Food Service Fund exceeded three months average expenditures.

Finding 2023-001 (Significant Deficiency): It was noted the District did not have formal written policies that address Uniform Grant Guidance requirements, such as: • determining the allowability of costs in accordance with federal cost principles the and the terms and conditions of the federal award; and • the mandatory disclosure of all violations of federal criminal law involving fraud, bribery, or gratuity violations potentially affecting the federal award. Prior Year Finding: Yes, Finding 2022-003. Federal Program Information: Applicable to all federal programs. Criteria or specific requirement: Uniform Grant Guidance, 2 C.F.R. §200.302(b)(7) Financial Management and 2 C.F.R. §§200.400 – 200.476 Subpart E - Cost Principles; and §200.113 Mandatory disclosures Questioned Costs: None. Condition: The District did not formally document the policies in accordance with Uniform Grant Guidance requirements. Context: The formal written policies omit certain information required by the Uniform Grant Guidance. Effect: Unknown. Cause: The formal written policies have not been compared to the Uniform Grant Guidance. Recommendation: The District should develop written policies and procedures that meet the criteria required by the Uniform Grant Guidance. Views of Responsible Officials: The District updated the policies subsequent to year end and submitted them to the NJDOE. As of the date of the audit the NJDOE has not responded to the District regarding acceptance.

Finding 2023-002 (Other Matter): The District’s net cash resources in the Food Service Fund exceeded three months average expenditures. Prior Year Finding: Not applicable. Federal Program Information: Child Nutrition Cluster Criteria or specific requirement: The New Jersey Department of Agriculture requires a School Food Authority to maintain a nonprofit School Food Service. The nonprofit status of the School Food Service is determined by evaluating net cash resources, which may not exceed three months average expenditures. Questioned Costs: None. Condition: Net cash resources in the Food Service Fund exceeded three months average expenditures. Context: Utilizing the USA net cash resource calculation form, it was determined that the District’s net cash resources exceeded the three months average expenditures by $1,190,169, as of June 30, 2023. Effect: The New Jersey Department of Agriculture requirement regarding Net Cash Resources was not met. Cause: The School District had remote learning for students in place during the recent pandemic years. This caused a drop in operating expenditures and also a sharp increase in revenues due to all student meals being classified as free meals for federal reimbursement. Recommendation: The District should reduce net cash resources on hand in the Food Service Fund through capital expenditures or other improvements to the Food Service Program. Views of Responsible Officials: Management agrees with above finding and has taken necessary corrective action, including the purchase of a food service vehicle, upgrade of equipment and the purchase or new equipment.

Finding 2023-003 (Significant Deficiency): The District’s final federal grant expenditure reports do not agree to the grant expenditures recorded in the special revenue fund general ledger. Prior Year Finding: Not applicable. Federal Program Information: Title I-A 84.010 Title ISIA Part A 84.010 Title IIA 84.367A Title Ill 84.365 IDEA – Basic 84.027A Criteria or specific requirement: Final expenditure reports should be reconciled to the general ledger expenditures and differences should be investigated and corrected. Questioned Costs: None. Condition: The final expenditure reports did not agree to the actual grant expenditures recorded in the special revenue fund general ledger by $78,824. Context: Instances were identified where the final grant reports were not accurately reconciled to the general ledger accounting system, resulting in inaccurate year end reporting and overstatement of accounts receivables related to federal and state grants. All instances identified indicated the final expenditure reports were lower than what was spent, therefore this did not result in questioned costs. The District was not reimbursed for all expenditures incurred under the grants. Effect: District did not request reimbursement for all expenditures incurred under the grant programs. Cause: Encumbrances were not included on the final expenditure reports. Instances were noted where the encumbrances should have been cancelled or were not liquidated timely. The remainder of instances were due to encumbrances that were inadvertently not included in the final grant reporting. Recommendation: The District should reconcile all special revenue fund expenditures, including encumbrances, to the final expenditure reports to verify they are in agreement. Views of Responsible Officials: Management agrees with above finding and will take necessary corrective action.

The audit of federal grant reimbursements indicated the District did not request certain reimbursements for actual grant expenditures during the 2021-22 fiscal year on a timely basis.

The audit of payroll transactions allocated to the Title I, Part A grant identified instances of 30 minutes of "prep time" omitted from the time sheet entries, but the 30 minutes of "prep time" were included in the ending number of hours worked and paid. Additionally, certain employees charged to the ESSER grants were not approved in the official minutes to be charged to the respective grants.

It was noted the District did not have formal written policies that address Uniform Grant Guidance requirements, such as: Determining the allowability of costs in accordance with federal cost principles and the terms and conditions of the federal award; and the mandatory disclosure of all violations of federal criminal law involving fraud, bribery, or gratuity violations potentially affecting the federal award.

It was noted during the review of purchase orders that a number of purchase orders greater than $25,000 were missing evidence of verification to ensure a vendor is not debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities.

The audit of federal grant reimbursements indicated the District did not request certain reimbursements for actual grant expenditures during the 2020/21 fiscal year.

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