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Blackhawk SD board told food service fund holds $1.26M; staff to file plan with PDE
Summary
At the Oct. 9 work session the board heard that the district's food service (cafeteria) fund contains about $1,260,000—greater than Pennsylvania Department of Education guidance of roughly three months of expenditures—and staff said they will file an action plan with PDE and return with spending proposals.
At its Oct. 9 work session the Blackhawk SD Board received an audit and finance update showing the district's food service (cafeteria) fund holds about $1,260,000, well above Pennsylvania Department of Education guidance for roughly three months of expenditures.
Administrator Brown told the board the district is undergoing an audit led by Turner Robertson and Associates and that auditors flagged cash belonging to the food service fund that had been kept in the general fund. "PDE guidance is that the food service fund shouldn't have cash that is in excess of 3 months worth of their expenditures," Brown said. "So we need to submit plan action to PDE once we file that report and they come back with the results." Brown said the district will present proposed uses for the money at future meetings.
Board members pressed for historical context for the surplus. One director (S2) asked whether a prior $1.5 million transfer in 2018–19 is reflected in current balances and whether any of the cafeteria money could be moved back to the general fund. Brown said the 2018 transfer was intended to stabilize the food service fund after multi-year deficits and that the district now operates the proprietary fund like a business, with money intended for food-service-specific expenses such as cafeteria equipment.
"There's no way of justifying any kind of recouping that back into the general fund," the director (S2) said during questioning, noting the statutory and accounting constraints on enterprise funds. Brown acknowledged there are capital and equipment needs in cafeterias and said the food service director is compiling a list of items for the board to consider.
Brown also reviewed overall revenue timing and cautioned that state budget delays and the timing of property tax reimbursements affect cash flow. He said auditors will return in January or February to present final financial statements and the district expects to finalize the annual financial report after audit adjustments.
What happens next: staff will submit the required plan to PDE addressing the food service fund balance, and the board will review specific spending proposals and auditor findings at upcoming meetings.
