MARSHALL PUBLIC SCHOOLS

2025-001 Child Nutrition Cluster - CFDA No. 10.553, 10.555 Grant No. 097-129 Condition: Marshall Public Schools must operate the food service program on a non-profit basis. The District’s ending food service balance exceeded three months average expenses by $256,202. Criteria: The child nutrition cluster compliance guidelines N.3 states that a school must operate the food service accounts on a non-profit basis. This indicates that no more than three months operating expenses may be maintained by the District to be considered non-profit. Effect: The District maintains funds in its food service accounts that exceed the amounts as allowed in the child nutrition guidelines. Questioned Costs: $256,202 based on the amounts in the fund balance of $735,015 above the three months operating costs of $478,813. Cause: Covid meal reimbursements exceeded the amounts that are normally received. Recommendation:We recommend that fund balances should be monitored to ensure that balances remain in line with child nutrition compliance requirements.

Child Nutrition Cluster - CFDA No. 10.553, 10.555 - Grant No. 097-129 Condition: Marshall Public Schools must operate the food service program on a non-profit basis. The District’s ending food service balance exceeded three months average expenses by $516,705. Criteria: The child nutrition cluster compliance guidelines N.3 states that a school must operate the food service accounts on a non-profit basis. This indicates that no more than three months operating expenses may be maintained by the District to be considered non-profit Effect: The District maintains funds in its food service accounts that exceed the amounts as allowed in the child nutrition guidelines. Questioned Costs: $516,705 based on the amounts in the fund balance of $933,345 above the three months operating costs of $416,640. Cause: Covid meal reimbursements exceeded the amounts that are normally received. Recommendation: We recommend that fund balances should be monitored to ensure that balances remain in line with child nutrition compliance requirements. View of Responsible Officials & Planned Corrective Action: The district has in FY25 allocated much of the funds in excess from the child nutrition cluster to invest in equipment. We have to date, spent the funds down on Freezers, cafeteria tables, coolers, and other such equipment as is allowable for the funds. After speaking with food and nutrition services at DESE, we understand that this surplus comes from the state reimbursements being higher during COVID than what they are post covid. Meaning the rate we were getting reimbursed for free/reduced was higher than the cost, which built the surplus. We are confident that this excess is going to continue being dwindled down, now that our reimbursements are less than the cost of the 3rd party vendors charges to us. However, we are not allowed to use it on unpaid lunch balances, so we have to continue running that surplus for at least another year. This excess is going to start coming down on its own through necessary investments in infrastructure.

2023-002 Child Nutrition Cluster - CFDA No. 10.553, 10.555 Grant No. 097-129 Condition: Marshall Public Schools must operate the food service program on a non-profit basis. The District’s ending food service balance exceeded three months average expenses by $518,169. Criteria: The child nutrition cluster compliance guidelines N.3 states that a school must operate the food service accounts on a non-profit basis. This indicates that no more than three months operating expenses may be maintained by the District to be considered non-profit. Effect: The District maintains funds in its food service accounts that exceed the amounts as allowed in the child nutrition guidelines. Questioned Costs: $518,169 based on the amounts in the fund balance of $881,754 above the three months operating costs of $363,585. Cause: Covid meal reimbursements exceeded the amounts that are normally received. Recommendation: We recommend that fund balances should be monitored to ensure that balances remain in line with child nutrition compliance requirements. View of Responsible Officials & Planned Corrective Action: The district has in FY24 allocated much of the funds in excess from the child nutrition cluster to invest in equipment. We have to date, spent the funds down on Freezers, cafeteria tables, coolers, and other such equipment as is allowable for the funds. After speaking with food and nutrition services at DESE, we understand that this surplus comes from the state reimbursements being higher during COVID than what they are post covid. Meaning the rate we were getting reimbursed for free/reduced was higher than the cost, which built the surplus. We are confident that this excess is going to continue being dwindled down, now that our reimbursements are less than the cost of the 3rd party vendors charges to us. However, we are not allowed to use it on unpaid lunch balances, so we have to continue running that surplus for at least another year. This excess is going to start coming down on its own through necessary investments in infrastructure.

2021-002 Child Nutrition Cluster - CFDA No. 10.553, 10.555 Grant No. 2021ON109943 Condition: Marshall Public Schools must operate the food service program on a non-profit basis. The District?s ending food service balance exceeded three months average expenses by $243,326. Criteria: The child nutrition cluster compliance guidelines N.3 states that a school must operate the food service accounts on a non-profit basis under 7CFR Section 210.14(a). This indicates that no more than three months operating expenses may be maintained by the District to be considered non-profit. Effect: The District maintains funds in its food service accounts that exceed guidelines as allowed in the child nutrition guidelines. Questioned Costs: $243,326 determined as follows: Ending food service balance: $447,107 3 months operating costs: $203,781 Excess balance: $243,326 Cause: Due to Covid-19, costs and expenses were down that would reduce the balances at the end of the fiscal year. Recommendation: We recommend that school food service balances should be monitored to ensure that these balances are reduced to comply with the requirements. District Response: 1. We had additional revenue because all meals were free last year. 2. We have students who still have positive (credits) that they have just left in their lunch accounts for when meals are no longer free. 3. We over budgeted expenses (numbers of meals that would be served) because we did not anticipate the number of days we were utilizing. 4. We were also not able to offer all the a la carte options we had planned when we created the budget. 5. Because COVID-19, MPS anticipated and budgeted for more adult and student meal participation than we had when school was not in session. 6. The District plans to communicate with parents to rectify the balances left in student lunch accounts. The money paid will be credited to students when meals are no longer free.

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