Ubly Community SchoolsLocal Government

Finding 2021-001: Significant deficiency Federal Program: Child Nutrition Cluster CFDA #: 10.555 and 10.559 Federal Agency: U.S. Department of Agriculture Pass-through entity: Michigan Department of Education Pass-through number: 200900, 210904 Criteria: The District?s fund balance in the food service fund is required to be less than three months of food service expenditures. Condition: The District currently has more than the allowable fund balance in the non-profit food service fund. As a result, the District will be required to develop a spending plan to reduce the balance to an acceptable level during 2021-2022 school year. The plan must be submitted to the Michigan Department of Education prior to implementation. Excess fund balance cannot be transferred to the general fund. Cause: The District participated in the unanticipated closure meal reimbursements program which is causing a larger than normal increase in the food service fund balance. Effect: At June 30, 2021, the District?s food service fund balance was greater than three months of expenditures. Recommendation: The District should implement a budget, as well as the required corrective action plan, for the 2021-2022 school year that will adequately reduce the food service fund balance. Client Response: The District concurs with the facts of this finding and is implementing procedures to prevent this in the future

Finding 2021-002: Significant deficiency Federal Program: Child Nutrition Cluster CFDA #: 10.555 and 10.559 Federal Agency: U.S. Department of Agriculture Pass-through entity: Michigan Department of Education Pass-through number: 200900, 210904 Criteria: 7 CRF 210.8(a) requires that school lunch food authorities establish internal controls which ensure the accuracy of meal counts prior to the submission of the monthly claim for reimbursement. At a minimum, these internal controls should include reviews of the meal counting and claiming system employed by each school district, comparisons of daily meal counts against data which will assist in the identification of meal counts in excess of the number of meals served each day to children eligible for such meals; and a system for following up on those meal counts which suggest the likelihood of meal counting problems. Condition: The District did not maintain effective internal controls over the Nutrition program to ensure the accuracy of meals served, as reported on monthly claims for reimbursements. Cause: The District?s process for recording, monitoring, and reporting meals did not include the level of review necessary to identify differences between the monthly claims for reimbursement and the source documentation. Effect: Monthly claims for reimbursement were, in some cases, inaccurate throughout the year and excess amounts of reimbursements were received by the district. Questioned Costs: Based on the monthly claims for reimbursement, $14,735 was over-requested throughout the year. Recommendation: The District should establish and maintain effective procedures and internal controls that would identify and correct meal count errors prior to requests for reimbursement. The District should also amend all inaccurate claims through the Michigan Department of Education. Client Response: The District concurs with the facts of this finding and has implanted controls to ensure the accuracy of meal counts and has contacted MDE with regards to amending necessary monthly claim reports.