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Audit: Novi food-service fund built reserves beyond federal three-month rule; auditors recommend use or price changes
Summary
Auditors found the Food Service Fund’s net cash resources exceeded the three-month average expenditure threshold after higher-than-expected meal claim revenues; they recommended using funds to improve the program, lower prices consistent with paid-lunch equity rules, or take other action to return to compliance.
In the auditors’ written findings, the firm reported that "meal claim revenues were in excess of anticipated amounts" after program changes and that "a proportional increase to expenditures did not occur, resulting in a growth in net cash resources in an amount that exceeded the three-month average expenditure requirement included in the federal regulations." The report said the overage has not been deemed material to federal programs but must be corrected to comply with USDA requirements governing school nutrition program reserves.
The auditors recommended options the district could use to reduce the Food Service Fund balance, including lowering paid-lunch prices consistent with paid-lunch equity provisions, improving food quality, or otherwise enhancing the program to spend down the balance. The report noted the district is "actively working on using the funds to enhance the program" and urged continued action to return to compliance.
