FORT BRAGG SCHOOLS CAFETERIA FUND

Finding 2022-001 Significant Deficiency Financial Statement Preparation Criteria: The Organization did not provide the auditors with complete and accurate financial statements and disclosures presented in accordance with generally accepted accounting principles. Condition: The Board of Directors and management share the ultimate responsibility for the Organization's internal control system and the accuracy and completeness of the Organization's financial statements and disclosures to ensure that those financial statements are presented in accordance with generally accepted accounting principles. Effect: Lack of a thorough review process could result in misstatements or omissions in the financial statements. Cause: There is a limited number of personnel in the Cafeteria Fund office. Questioned Costs: None. Recommendation: The Organization should review its current process for preparation of annual financial statements and allocate the resources necessary to ensure a thorough review of the financial statements and disclosures by personnel possessing the appropriate knowledge and skills.

Finding 2022-002 Significant Deficiency Internal controls Criteria: With a limited number of personnel for certain functions, there are inherent limitations of the effectiveness of certain controls due to the lack of segregation of duties among Organization personnel. Condition: Duties should be segregated and alternative controls used to compensate for lack of separation. Effect: Transactions could be mishandled. Cause: There is a limited number of personnel in the Cafeteria Fund office. Questioned Costs: None. Recommendation: The duties should be separated as much as possible and alternative controls should be used to compensate for lack of separation.

Finding 2022-003 Significant Deficiency Cash Management 2022-3 Criteria: The Organization shall limit its net cash resources to an amount that does not exceed three (3) months average expenditures for its child nutrition program. Condition: Based on the formula provided by the compliance supplement, the Organization exceed three (3) months average expenditures regarding its cash balances at June 30, 2022. Effect: The cash has excess cash resources over the recommended amounts based on 2022 operating expenditures Cause: The Organization has created increased efficiencies in its operations. Questioned Costs: None. Recommendation: We recommend that the Organization implement procedures to ensure that cash resources do not exceed three (3) months average of operating expenditures.

Cash Management Significant Deficiency Criteria: The school food authority shall limit its net cash resources to an amount that does not exceed 3 months average expenditures for its nonprofit Child Nutrition program. Condition: Based on the formula provided by NCDPI, the Organization has net cash resources equal to 11.59 months of average expenditures. Effect: The Organization has $1,269,458 net cash resources in excess of the recommended limit. Cause: The Organization has increased efficiency in all its cafeteria locations. Identification as a Repeat Finding: Finding number 2021-3 is a repeat finding of number 2020-3 Recommendation: We recommend that the Organization implement procedures to ensure that net cash resources do not exceed 3 months average expenditures.

Cash Management Significant Deficiency Criteria: The school food authority shall limit its net cash resources to an amount that does not exceed 3 months average expenditures for its nonprofit Child Nutrition program. Condition: Based on the formula provided by NCDPI, the Organization has net cash resources equal to 6.33 months of average expenditures. Effect: The Organization has $623,122 net cash resources in excess of the recommended limit. Cause: The Organization has increased efficiency in all its cafeteria locations. Identification as a Repeat Finding: Finding number 2020-003 is a repeat finding of number 2019-003 Recommendation: We recommend that the Organization implement procedures to ensure that net cash resources do not exceed 3 months average expenditures. Views of responsible officials and planned corrective actions: We concur with the recommendation and will develop a strategic plan to address excess net cash resources.

Cash Management Significant Deficiency Criteria: The school food authority shall limit its net cash resources to an amount that does not exceed 3 months average expenditures for its nonprofit Child Nutrition program. Condition: Based on the formula provided by NCDPI, the Organization has net cash resources equal to 5.12 months of average expenditures. Effect: The Organization has $421,926 net cash resources in excess of the recommended limit. Cause: The Organization has increased efficiency in all its cafeteria locations. Identification as a Repeat Finding: Finding number 2019-3 is a repeat finding of number 2018-3 Recommendation: We recommend that the Organization implement procedures to ensure that net cash resources do not exceed 3 months average expenditures. Views of responsible officials and planned We concur with the recommendation and will develop a strategic plan to address excess corrective actions: net cash resources.

Reporting Significant Deficiency Criteria: The school food authority is required to report semi-annually year-to-date figures on the use of program funds. These reports are due on March 1st and October 1st. Condition: During testing performed for the program specific reporting requirements, we noted that the Organization did not file the required reports timely. Effect: Failure to timely review and submit reports could result in reporting penalties and could impact funding determinations. Cause: Staff did not follow policies and procedures related to federal reporting requirements. Identification as a Repeat Finding: Finding number 2019-4 is a repeat finding of number 2018-4 Recommendation: We recommend the Organization strengthen controls over the preparation, review, and timely submission of required performance and financial reports to grantor agencies. Views of responsible officials and planned We concur with the recommendation and will develop a strategic plan to address corrective actions: compliance with reporting requirements.

Reporting Significant Deficiency Criteria: The school food authority is required to report to the grantor accurate annual financial information. Condition: During testing performed for the program specific reporting requirements, we noted that the reports submitted by the Organization did not reconcile to the financial reocrds. Effect: Failure to timely review and accurately report financal information could result in reporting penalties and could impact funding determinations. Cause: Staff did not follow policies and procedures related to federal reporting requirements. Recommendation: We recommend the Organization strengthen controls over the preparation, review, and timely submission of required performance and financial reports to grantor agencies. Views of responsible officials and planned We concur with the recommendation and will develop a strategic plan to address corrective actions: compliance with reporting requirements.

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION