Bridgman Public SchoolsLocal Government

Finding 2021-001 ? CFDA Number, Federal Agency, and Program Name ? 10.553, 10.555, 10.556, 10.559, 10.579, Child Nutrition Cluster, U.S. Department of Agriculture Finding Type ? Material weakness in internal controls (Uniform Guidance). Criteria ? The USDA requires that the ending balance of the non-profit school food service fund does not exceed three months? average of operating expenses. If an excess fund balance should occur, the School Food Authority (?SFA?) will be required to develop a spending plan for reducing the balance to an acceptable level during the following school year. The plan must be submitted to MDE, Office of School Support Services, for prior approval. As a result, this allows the SFA to use those excess funds to further improve the school meals program operations. The school food service account is a non-profit account which means that the excess funds cannot be used to profit the general fund. It must be used for a specific purpose in the School Meals Program. Condition ? The District?s fund equity in the Food Service Fund exceeded the allowable three-months of expenditures threshold. Questioned Costs ? None Context ? The District?s fund equity of $432,785 at fiscal year-end exceeded the allowable three-months of expenditures threshold by $168,670. Cause and Effect ? During the 2021 fiscal year, the District?s revenues exceeded expenditures, such that, when added to the opening fund balance, the final fund balance caused the fund to be in non-compliance. Without proper monitoring, the District could see and adverse effect of funding from federal sources. Recommendation ? The District has already reviewed the circumstances surrounding this occurrence and is cognizant of the corrective action. Views of the Responsible Officials and Planned Corrective Actions ? The District will use up fund balance with the purchase of a new equipment. The District will monitor the fund balance throughout the 2021-2022 school year to ensure the fund balance does not exceed the state limits.

Finding: 2020-002 ? CFDA Number, Federal Agency, and Program Name ? 10.553, 10.555, 10.559 Child Nutrition Cluster, U.S. Department of Agriculture Finding Type ? Material weakness in internal controls (Uniform Guidance). Criteria ? The USDA requires that the ending balance of the non-profit school food service fund does not exceed three months? average of operating expenses. If an excess fund balance should occur, the School Food Authority (?SFA?) will be required to develop a spending plan for reducing the balance to an acceptable level during the following school year. The plan must be submitted to MDE, Office of School Support Services, for prior approval. As a result, this allows the SFA to use those excess funds to further improve the school meals program operations. The school food service account is a non-profit account which means that the excess funds cannot be used to profit the general fund. It must be used for a specific purpose in the School Meals Program. Condition ? The District?s fund equity in the Food Service Fund exceeded the allowable three-months of expenditures threshold. Questioned Costs ? None Context ? The District?s fund equity of $324,795 at fiscal year-end exceeded the allowable three-months of expenditures threshold by $101,686. Cause and Effect ? During the 2020 fiscal year, the District?s revenues exceeded expenditures, such that, when added to the opening fund balance, the final fund balance caused the fund to be in non-compliance. Without proper monitoring, the District could see and adverse effect of funding from federal sources. Recommendation ? The District has already reviewed the circumstances surrounding this occurrence and is cognizant of the corrective action. Views of the Responsible Officials and Planned Corrective Actions ? The District will use up fund balance with the purchase of a new equipment. The District will monitor the fund balance throughout the 2020-21 school year to ensure the fund balance does not exceed the state limits.