Finding 2022-001
Federal Agency: Department of Agriculture
Federal Program: Food Distribution Cluster
CFDA: #10.568, 10.569
Compliance Requirement: Eligibility for Subrecipients
Type of Finding: Significant Deficiency in Internal Controls over Compliance
Repeat Finding: Yes – 2021-001
Criteria:
7 CFR §251.3(d) and §251.5(a) – Eligibility for Subrecipients
Prior to making commodities available, eligible recipient agencies to which the state agency has delegated responsibility for the distribution of The Emergency Food Assistance Program (“TEFAP”) commodities must
ensure that an organization applying for participation in the program meets the definition of an “eligible recipient agency”. An eligible recipient agency means an organization which is either public, or is private,
possessing tax exempt status. Private organizations possessing tax exempt status must (i) be currently operating another federal program requiring tax-exempt status under the Internal Revenue Code (“IRC”), or
(ii) possess documentation from the Internal Revenue Service (“IRS”) recognizing tax-exempt status under the IRC, or (iii) if not in possession of such documentation, be automatically tax exempt as “organized or
operated exclusively for religious purposes” under the IRC.
Condition:
From a sample of twenty-five (25) agencies who distributed TEFAP products during the fiscal year, the following exception was noted:
* One (1) agency did not have a FY21-22 TEFAP agreement on file.
Question Costs:
N/A
Context:
The Organization has a policy whereby an agency’s eligibility status is checked by either reviewing the IRS website to ensure an entity’s tax-exempt status, or obtaining documentation from an entity verifying the
entity is automatically tax-exempt by being an organization organized or operated exclusively for religious purposes. The entity in question was noted as a church.
Cause:
Controls were not in place to ensure eligibility status is documented and filed with the subrecipient’s file prior to distribution.
Effects:
Ineligible subrecipients may receive TEFAP products. Recommendations:
We recommend controls be strengthened to ensure eligibility status is confirmed and support is maintained verifying a subrecipient is eligible to received TEFAP products each year during recertification and when
new subrecipients are added during the year. In order for a subrecipient to be eligible to receive TEFAP products, the subrecipient must be tagged as such in the inventory system. We recommend the
Organization strengthen its internal controls to include maintaining a checklist to be included in each distributing agency’s file which includes the check for documentation supporting the agency’s eligibility
including each required document. The forms should be reviewed to ensure proper verification was made and all contracts are signed and dated by both the agency and the Organization. A check could also be
made that the agency was properly set up and eligible qualifiers checked in the inventory system. At the beginning of each fiscal year, a report should be reviewed of all agencies and their qualifiers. This should be
checked against the agencies’ files to ensure 1) the removal of any qualifiers for which documentation has not been received, and 2) follow-up of agencies to obtain the necessary documents. This will ensure
completeness, timeliness, and consistency among all agencies and all documents.
Management’s Response:
Management concurs with the finding.
Finding 2022-002
Federal Agency: Department of Agriculture
Federal Program: Food Distribution Cluster
CFDA: #10.568, 10.569
Compliance Requirement: Special Tests and Provisions – Accountability for USDA Foods
Type of Finding: Significant Deficiency in Internal Controls over Compliance
Repeat Finding: Yes – 2021-002
Criteria:
7 CFR §250.19 Recordkeeping Requirements
Accurate and complete records must be maintained with respect to the receipt, distribution/use, and inventory of USDA Foods.
Condition:
When products are received, a bill of lading from the trucking company is received with the goods. Two people in the warehouse count and weigh the products and verify that their count, weight, and date of
receipt agree to the bill of lading as indicated by their signature on the bill of lading. Received items are inspected for damage, physical condition, temperature (on refrigerated/frozen product), visual quality, and
package dates, etc. From a sample of twenty-five (25) donated items, one (1) donation had no indication included in bill of lading denoting the item was a TEFAP product.
Question Costs:
N/A
Context:
The Organization has a policy whereby USDA products received are inspected, counted, and weighed. The completion of the inspection is noted indicated with a signature on the bill of lading.
Cause:
Controls were not in place to ensure all inventory transactions were properly documented with signature of inspections upon receipt of inventory.
Effects:
Inventories may not be accounted for properly.
Recommendations:
We recommend controls be strengthened to ensure all donations are supported with verification of count, weight, and other inspection of the product as evidenced through signature of the person(s) receiving
inventory items. This could be made through a checklist attached to the bill of lading and used with entering the items into the inventory system that includes verification was properly made and items properly set up in inventory.
Management’s Response:
Management concurs with the finding.
Finding 2022-003
Federal Agency: Department of Agriculture
Federal Program: Food Distribution Cluster
CFDA: #10.568, 10.569
Compliance Requirement: Special Tests and Provisions – Accountability for USDA Foods
Type of Finding: Significant Deficiency in Internal Controls over Compliance
Repeat Finding: Yes – 2021-003
Criteria:
7 CFR §250.19 Recordkeeping Requirements
Accurate and complete records must be maintained with respect to the receipt, distribution/use, and inventory of USDA Foods. Failure of the distributing agency to comply with recordkeeping requirements
must be considered prima facie evidence of improper distribution or loss of donated foods and may result in a claim against such party for the loss or misuse of donated foods. In addition, records relating to the
requirements for donated foods must be retained for a period of three years from the close of the fiscal year to which they pertain.
Condition:
The Organization requires subrecipients to sign an invoice indicating their pick-up of USDA items taken out of the Organization’s inventory. From a sample of twenty-five (25) USDA distributions taken out of or
returned to the Organization’s inventory, (1) sample had ship date different from the date distributed.
Question Costs:
N/A
Context:
The Organization has a policy whereby USDA products distributed are invoiced to receiving agency and agency signs to indicate their receipt of USDA items.
Cause:
Controls were not in place to ensure all inventory transactions are properly documented with signature for inspections upon disbursement of inventory.
Effects:
Inventories may not be accounted for properly.
Recommendations:
We recommend original records relating to the requirements for distributed foods be retained for the required period.
Management’s Response:
Management concurs with the finding.
Finding 2022-001
Federal Agency: Department of Agriculture
Federal Program: Food Distribution Cluster
CFDA: #10.568, 10.569
Compliance Requirement: Eligibility for Subrecipients
Type of Finding: Significant Deficiency in Internal Controls over Compliance
Repeat Finding: Yes – 2021-001
Criteria:
7 CFR §251.3(d) and §251.5(a) – Eligibility for Subrecipients
Prior to making commodities available, eligible recipient agencies to which the state agency has delegated responsibility for the distribution of The Emergency Food Assistance Program (“TEFAP”) commodities must
ensure that an organization applying for participation in the program meets the definition of an “eligible recipient agency”. An eligible recipient agency means an organization which is either public, or is private,
possessing tax exempt status. Private organizations possessing tax exempt status must (i) be currently operating another federal program requiring tax-exempt status under the Internal Revenue Code (“IRC”), or
(ii) possess documentation from the Internal Revenue Service (“IRS”) recognizing tax-exempt status under the IRC, or (iii) if not in possession of such documentation, be automatically tax exempt as “organized or
operated exclusively for religious purposes” under the IRC.
Condition:
From a sample of twenty-five (25) agencies who distributed TEFAP products during the fiscal year, the following exception was noted:
* One (1) agency did not have a FY21-22 TEFAP agreement on file.
Question Costs:
N/A
Context:
The Organization has a policy whereby an agency’s eligibility status is checked by either reviewing the IRS website to ensure an entity’s tax-exempt status, or obtaining documentation from an entity verifying the
entity is automatically tax-exempt by being an organization organized or operated exclusively for religious purposes. The entity in question was noted as a church.
Cause:
Controls were not in place to ensure eligibility status is documented and filed with the subrecipient’s file prior to distribution.
Effects:
Ineligible subrecipients may receive TEFAP products. Recommendations:
We recommend controls be strengthened to ensure eligibility status is confirmed and support is maintained verifying a subrecipient is eligible to received TEFAP products each year during recertification and when
new subrecipients are added during the year. In order for a subrecipient to be eligible to receive TEFAP products, the subrecipient must be tagged as such in the inventory system. We recommend the
Organization strengthen its internal controls to include maintaining a checklist to be included in each distributing agency’s file which includes the check for documentation supporting the agency’s eligibility
including each required document. The forms should be reviewed to ensure proper verification was made and all contracts are signed and dated by both the agency and the Organization. A check could also be
made that the agency was properly set up and eligible qualifiers checked in the inventory system. At the beginning of each fiscal year, a report should be reviewed of all agencies and their qualifiers. This should be
checked against the agencies’ files to ensure 1) the removal of any qualifiers for which documentation has not been received, and 2) follow-up of agencies to obtain the necessary documents. This will ensure
completeness, timeliness, and consistency among all agencies and all documents.
Management’s Response:
Management concurs with the finding.
Finding 2022-002
Federal Agency: Department of Agriculture
Federal Program: Food Distribution Cluster
CFDA: #10.568, 10.569
Compliance Requirement: Special Tests and Provisions – Accountability for USDA Foods
Type of Finding: Significant Deficiency in Internal Controls over Compliance
Repeat Finding: Yes – 2021-002
Criteria:
7 CFR §250.19 Recordkeeping Requirements
Accurate and complete records must be maintained with respect to the receipt, distribution/use, and inventory of USDA Foods.
Condition:
When products are received, a bill of lading from the trucking company is received with the goods. Two people in the warehouse count and weigh the products and verify that their count, weight, and date of
receipt agree to the bill of lading as indicated by their signature on the bill of lading. Received items are inspected for damage, physical condition, temperature (on refrigerated/frozen product), visual quality, and
package dates, etc. From a sample of twenty-five (25) donated items, one (1) donation had no indication included in bill of lading denoting the item was a TEFAP product.
Question Costs:
N/A
Context:
The Organization has a policy whereby USDA products received are inspected, counted, and weighed. The completion of the inspection is noted indicated with a signature on the bill of lading.
Cause:
Controls were not in place to ensure all inventory transactions were properly documented with signature of inspections upon receipt of inventory.
Effects:
Inventories may not be accounted for properly.
Recommendations:
We recommend controls be strengthened to ensure all donations are supported with verification of count, weight, and other inspection of the product as evidenced through signature of the person(s) receiving
inventory items. This could be made through a checklist attached to the bill of lading and used with entering the items into the inventory system that includes verification was properly made and items properly set up in inventory.
Management’s Response:
Management concurs with the finding.
Finding 2022-003
Federal Agency: Department of Agriculture
Federal Program: Food Distribution Cluster
CFDA: #10.568, 10.569
Compliance Requirement: Special Tests and Provisions – Accountability for USDA Foods
Type of Finding: Significant Deficiency in Internal Controls over Compliance
Repeat Finding: Yes – 2021-003
Criteria:
7 CFR §250.19 Recordkeeping Requirements
Accurate and complete records must be maintained with respect to the receipt, distribution/use, and inventory of USDA Foods. Failure of the distributing agency to comply with recordkeeping requirements
must be considered prima facie evidence of improper distribution or loss of donated foods and may result in a claim against such party for the loss or misuse of donated foods. In addition, records relating to the
requirements for donated foods must be retained for a period of three years from the close of the fiscal year to which they pertain.
Condition:
The Organization requires subrecipients to sign an invoice indicating their pick-up of USDA items taken out of the Organization’s inventory. From a sample of twenty-five (25) USDA distributions taken out of or
returned to the Organization’s inventory, (1) sample had ship date different from the date distributed.
Question Costs:
N/A
Context:
The Organization has a policy whereby USDA products distributed are invoiced to receiving agency and agency signs to indicate their receipt of USDA items.
Cause:
Controls were not in place to ensure all inventory transactions are properly documented with signature for inspections upon disbursement of inventory.
Effects:
Inventories may not be accounted for properly.
Recommendations:
We recommend original records relating to the requirements for distributed foods be retained for the required period.
Management’s Response:
Management concurs with the finding.
Finding 2022-001
Federal Agency: Department of Agriculture
Federal Program: Food Distribution Cluster
CFDA: #10.568, 10.569
Compliance Requirement: Eligibility for Subrecipients
Type of Finding: Significant Deficiency in Internal Controls over Compliance
Repeat Finding: Yes – 2021-001
Criteria:
7 CFR §251.3(d) and §251.5(a) – Eligibility for Subrecipients
Prior to making commodities available, eligible recipient agencies to which the state agency has delegated responsibility for the distribution of The Emergency Food Assistance Program (“TEFAP”) commodities must
ensure that an organization applying for participation in the program meets the definition of an “eligible recipient agency”. An eligible recipient agency means an organization which is either public, or is private,
possessing tax exempt status. Private organizations possessing tax exempt status must (i) be currently operating another federal program requiring tax-exempt status under the Internal Revenue Code (“IRC”), or
(ii) possess documentation from the Internal Revenue Service (“IRS”) recognizing tax-exempt status under the IRC, or (iii) if not in possession of such documentation, be automatically tax exempt as “organized or
operated exclusively for religious purposes” under the IRC.
Condition:
From a sample of twenty-five (25) agencies who distributed TEFAP products during the fiscal year, the following exception was noted:
* One (1) agency did not have a FY21-22 TEFAP agreement on file.
Question Costs:
N/A
Context:
The Organization has a policy whereby an agency’s eligibility status is checked by either reviewing the IRS website to ensure an entity’s tax-exempt status, or obtaining documentation from an entity verifying the
entity is automatically tax-exempt by being an organization organized or operated exclusively for religious purposes. The entity in question was noted as a church.
Cause:
Controls were not in place to ensure eligibility status is documented and filed with the subrecipient’s file prior to distribution.
Effects:
Ineligible subrecipients may receive TEFAP products. Recommendations:
We recommend controls be strengthened to ensure eligibility status is confirmed and support is maintained verifying a subrecipient is eligible to received TEFAP products each year during recertification and when
new subrecipients are added during the year. In order for a subrecipient to be eligible to receive TEFAP products, the subrecipient must be tagged as such in the inventory system. We recommend the
Organization strengthen its internal controls to include maintaining a checklist to be included in each distributing agency’s file which includes the check for documentation supporting the agency’s eligibility
including each required document. The forms should be reviewed to ensure proper verification was made and all contracts are signed and dated by both the agency and the Organization. A check could also be
made that the agency was properly set up and eligible qualifiers checked in the inventory system. At the beginning of each fiscal year, a report should be reviewed of all agencies and their qualifiers. This should be
checked against the agencies’ files to ensure 1) the removal of any qualifiers for which documentation has not been received, and 2) follow-up of agencies to obtain the necessary documents. This will ensure
completeness, timeliness, and consistency among all agencies and all documents.
Management’s Response:
Management concurs with the finding.
Finding 2022-002
Federal Agency: Department of Agriculture
Federal Program: Food Distribution Cluster
CFDA: #10.568, 10.569
Compliance Requirement: Special Tests and Provisions – Accountability for USDA Foods
Type of Finding: Significant Deficiency in Internal Controls over Compliance
Repeat Finding: Yes – 2021-002
Criteria:
7 CFR §250.19 Recordkeeping Requirements
Accurate and complete records must be maintained with respect to the receipt, distribution/use, and inventory of USDA Foods.
Condition:
When products are received, a bill of lading from the trucking company is received with the goods. Two people in the warehouse count and weigh the products and verify that their count, weight, and date of
receipt agree to the bill of lading as indicated by their signature on the bill of lading. Received items are inspected for damage, physical condition, temperature (on refrigerated/frozen product), visual quality, and
package dates, etc. From a sample of twenty-five (25) donated items, one (1) donation had no indication included in bill of lading denoting the item was a TEFAP product.
Question Costs:
N/A
Context:
The Organization has a policy whereby USDA products received are inspected, counted, and weighed. The completion of the inspection is noted indicated with a signature on the bill of lading.
Cause:
Controls were not in place to ensure all inventory transactions were properly documented with signature of inspections upon receipt of inventory.
Effects:
Inventories may not be accounted for properly.
Recommendations:
We recommend controls be strengthened to ensure all donations are supported with verification of count, weight, and other inspection of the product as evidenced through signature of the person(s) receiving
inventory items. This could be made through a checklist attached to the bill of lading and used with entering the items into the inventory system that includes verification was properly made and items properly set up in inventory.
Management’s Response:
Management concurs with the finding.
Finding 2022-003
Federal Agency: Department of Agriculture
Federal Program: Food Distribution Cluster
CFDA: #10.568, 10.569
Compliance Requirement: Special Tests and Provisions – Accountability for USDA Foods
Type of Finding: Significant Deficiency in Internal Controls over Compliance
Repeat Finding: Yes – 2021-003
Criteria:
7 CFR §250.19 Recordkeeping Requirements
Accurate and complete records must be maintained with respect to the receipt, distribution/use, and inventory of USDA Foods. Failure of the distributing agency to comply with recordkeeping requirements
must be considered prima facie evidence of improper distribution or loss of donated foods and may result in a claim against such party for the loss or misuse of donated foods. In addition, records relating to the
requirements for donated foods must be retained for a period of three years from the close of the fiscal year to which they pertain.
Condition:
The Organization requires subrecipients to sign an invoice indicating their pick-up of USDA items taken out of the Organization’s inventory. From a sample of twenty-five (25) USDA distributions taken out of or
returned to the Organization’s inventory, (1) sample had ship date different from the date distributed.
Question Costs:
N/A
Context:
The Organization has a policy whereby USDA products distributed are invoiced to receiving agency and agency signs to indicate their receipt of USDA items.
Cause:
Controls were not in place to ensure all inventory transactions are properly documented with signature for inspections upon disbursement of inventory.
Effects:
Inventories may not be accounted for properly.
Recommendations:
We recommend original records relating to the requirements for distributed foods be retained for the required period.
Management’s Response:
Management concurs with the finding.
Finding 2022-001
Federal Agency: Department of Agriculture
Federal Program: Food Distribution Cluster
CFDA: #10.568, 10.569
Compliance Requirement: Eligibility for Subrecipients
Type of Finding: Significant Deficiency in Internal Controls over Compliance
Repeat Finding: Yes – 2021-001
Criteria:
7 CFR §251.3(d) and §251.5(a) – Eligibility for Subrecipients
Prior to making commodities available, eligible recipient agencies to which the state agency has delegated responsibility for the distribution of The Emergency Food Assistance Program (“TEFAP”) commodities must
ensure that an organization applying for participation in the program meets the definition of an “eligible recipient agency”. An eligible recipient agency means an organization which is either public, or is private,
possessing tax exempt status. Private organizations possessing tax exempt status must (i) be currently operating another federal program requiring tax-exempt status under the Internal Revenue Code (“IRC”), or
(ii) possess documentation from the Internal Revenue Service (“IRS”) recognizing tax-exempt status under the IRC, or (iii) if not in possession of such documentation, be automatically tax exempt as “organized or
operated exclusively for religious purposes” under the IRC.
Condition:
From a sample of twenty-five (25) agencies who distributed TEFAP products during the fiscal year, the following exception was noted:
* One (1) agency did not have a FY21-22 TEFAP agreement on file.
Question Costs:
N/A
Context:
The Organization has a policy whereby an agency’s eligibility status is checked by either reviewing the IRS website to ensure an entity’s tax-exempt status, or obtaining documentation from an entity verifying the
entity is automatically tax-exempt by being an organization organized or operated exclusively for religious purposes. The entity in question was noted as a church.
Cause:
Controls were not in place to ensure eligibility status is documented and filed with the subrecipient’s file prior to distribution.
Effects:
Ineligible subrecipients may receive TEFAP products. Recommendations:
We recommend controls be strengthened to ensure eligibility status is confirmed and support is maintained verifying a subrecipient is eligible to received TEFAP products each year during recertification and when
new subrecipients are added during the year. In order for a subrecipient to be eligible to receive TEFAP products, the subrecipient must be tagged as such in the inventory system. We recommend the
Organization strengthen its internal controls to include maintaining a checklist to be included in each distributing agency’s file which includes the check for documentation supporting the agency’s eligibility
including each required document. The forms should be reviewed to ensure proper verification was made and all contracts are signed and dated by both the agency and the Organization. A check could also be
made that the agency was properly set up and eligible qualifiers checked in the inventory system. At the beginning of each fiscal year, a report should be reviewed of all agencies and their qualifiers. This should be
checked against the agencies’ files to ensure 1) the removal of any qualifiers for which documentation has not been received, and 2) follow-up of agencies to obtain the necessary documents. This will ensure
completeness, timeliness, and consistency among all agencies and all documents.
Management’s Response:
Management concurs with the finding.
Finding 2022-002
Federal Agency: Department of Agriculture
Federal Program: Food Distribution Cluster
CFDA: #10.568, 10.569
Compliance Requirement: Special Tests and Provisions – Accountability for USDA Foods
Type of Finding: Significant Deficiency in Internal Controls over Compliance
Repeat Finding: Yes – 2021-002
Criteria:
7 CFR §250.19 Recordkeeping Requirements
Accurate and complete records must be maintained with respect to the receipt, distribution/use, and inventory of USDA Foods.
Condition:
When products are received, a bill of lading from the trucking company is received with the goods. Two people in the warehouse count and weigh the products and verify that their count, weight, and date of
receipt agree to the bill of lading as indicated by their signature on the bill of lading. Received items are inspected for damage, physical condition, temperature (on refrigerated/frozen product), visual quality, and
package dates, etc. From a sample of twenty-five (25) donated items, one (1) donation had no indication included in bill of lading denoting the item was a TEFAP product.
Question Costs:
N/A
Context:
The Organization has a policy whereby USDA products received are inspected, counted, and weighed. The completion of the inspection is noted indicated with a signature on the bill of lading.
Cause:
Controls were not in place to ensure all inventory transactions were properly documented with signature of inspections upon receipt of inventory.
Effects:
Inventories may not be accounted for properly.
Recommendations:
We recommend controls be strengthened to ensure all donations are supported with verification of count, weight, and other inspection of the product as evidenced through signature of the person(s) receiving
inventory items. This could be made through a checklist attached to the bill of lading and used with entering the items into the inventory system that includes verification was properly made and items properly set up in inventory.
Management’s Response:
Management concurs with the finding.
Finding 2022-003
Federal Agency: Department of Agriculture
Federal Program: Food Distribution Cluster
CFDA: #10.568, 10.569
Compliance Requirement: Special Tests and Provisions – Accountability for USDA Foods
Type of Finding: Significant Deficiency in Internal Controls over Compliance
Repeat Finding: Yes – 2021-003
Criteria:
7 CFR §250.19 Recordkeeping Requirements
Accurate and complete records must be maintained with respect to the receipt, distribution/use, and inventory of USDA Foods. Failure of the distributing agency to comply with recordkeeping requirements
must be considered prima facie evidence of improper distribution or loss of donated foods and may result in a claim against such party for the loss or misuse of donated foods. In addition, records relating to the
requirements for donated foods must be retained for a period of three years from the close of the fiscal year to which they pertain.
Condition:
The Organization requires subrecipients to sign an invoice indicating their pick-up of USDA items taken out of the Organization’s inventory. From a sample of twenty-five (25) USDA distributions taken out of or
returned to the Organization’s inventory, (1) sample had ship date different from the date distributed.
Question Costs:
N/A
Context:
The Organization has a policy whereby USDA products distributed are invoiced to receiving agency and agency signs to indicate their receipt of USDA items.
Cause:
Controls were not in place to ensure all inventory transactions are properly documented with signature for inspections upon disbursement of inventory.
Effects:
Inventories may not be accounted for properly.
Recommendations:
We recommend original records relating to the requirements for distributed foods be retained for the required period.
Management’s Response:
Management concurs with the finding.
Finding 2022-001
Federal Agency: Department of Agriculture
Federal Program: Food Distribution Cluster
CFDA: #10.568, 10.569
Compliance Requirement: Eligibility for Subrecipients
Type of Finding: Significant Deficiency in Internal Controls over Compliance
Repeat Finding: Yes – 2021-001
Criteria:
7 CFR §251.3(d) and §251.5(a) – Eligibility for Subrecipients
Prior to making commodities available, eligible recipient agencies to which the state agency has delegated responsibility for the distribution of The Emergency Food Assistance Program (“TEFAP”) commodities must
ensure that an organization applying for participation in the program meets the definition of an “eligible recipient agency”. An eligible recipient agency means an organization which is either public, or is private,
possessing tax exempt status. Private organizations possessing tax exempt status must (i) be currently operating another federal program requiring tax-exempt status under the Internal Revenue Code (“IRC”), or
(ii) possess documentation from the Internal Revenue Service (“IRS”) recognizing tax-exempt status under the IRC, or (iii) if not in possession of such documentation, be automatically tax exempt as “organized or
operated exclusively for religious purposes” under the IRC.
Condition:
From a sample of twenty-five (25) agencies who distributed TEFAP products during the fiscal year, the following exception was noted:
* One (1) agency did not have a FY21-22 TEFAP agreement on file.
Question Costs:
N/A
Context:
The Organization has a policy whereby an agency’s eligibility status is checked by either reviewing the IRS website to ensure an entity’s tax-exempt status, or obtaining documentation from an entity verifying the
entity is automatically tax-exempt by being an organization organized or operated exclusively for religious purposes. The entity in question was noted as a church.
Cause:
Controls were not in place to ensure eligibility status is documented and filed with the subrecipient’s file prior to distribution.
Effects:
Ineligible subrecipients may receive TEFAP products. Recommendations:
We recommend controls be strengthened to ensure eligibility status is confirmed and support is maintained verifying a subrecipient is eligible to received TEFAP products each year during recertification and when
new subrecipients are added during the year. In order for a subrecipient to be eligible to receive TEFAP products, the subrecipient must be tagged as such in the inventory system. We recommend the
Organization strengthen its internal controls to include maintaining a checklist to be included in each distributing agency’s file which includes the check for documentation supporting the agency’s eligibility
including each required document. The forms should be reviewed to ensure proper verification was made and all contracts are signed and dated by both the agency and the Organization. A check could also be
made that the agency was properly set up and eligible qualifiers checked in the inventory system. At the beginning of each fiscal year, a report should be reviewed of all agencies and their qualifiers. This should be
checked against the agencies’ files to ensure 1) the removal of any qualifiers for which documentation has not been received, and 2) follow-up of agencies to obtain the necessary documents. This will ensure
completeness, timeliness, and consistency among all agencies and all documents.
Management’s Response:
Management concurs with the finding.
Finding 2022-002
Federal Agency: Department of Agriculture
Federal Program: Food Distribution Cluster
CFDA: #10.568, 10.569
Compliance Requirement: Special Tests and Provisions – Accountability for USDA Foods
Type of Finding: Significant Deficiency in Internal Controls over Compliance
Repeat Finding: Yes – 2021-002
Criteria:
7 CFR §250.19 Recordkeeping Requirements
Accurate and complete records must be maintained with respect to the receipt, distribution/use, and inventory of USDA Foods.
Condition:
When products are received, a bill of lading from the trucking company is received with the goods. Two people in the warehouse count and weigh the products and verify that their count, weight, and date of
receipt agree to the bill of lading as indicated by their signature on the bill of lading. Received items are inspected for damage, physical condition, temperature (on refrigerated/frozen product), visual quality, and
package dates, etc. From a sample of twenty-five (25) donated items, one (1) donation had no indication included in bill of lading denoting the item was a TEFAP product.
Question Costs:
N/A
Context:
The Organization has a policy whereby USDA products received are inspected, counted, and weighed. The completion of the inspection is noted indicated with a signature on the bill of lading.
Cause:
Controls were not in place to ensure all inventory transactions were properly documented with signature of inspections upon receipt of inventory.
Effects:
Inventories may not be accounted for properly.
Recommendations:
We recommend controls be strengthened to ensure all donations are supported with verification of count, weight, and other inspection of the product as evidenced through signature of the person(s) receiving
inventory items. This could be made through a checklist attached to the bill of lading and used with entering the items into the inventory system that includes verification was properly made and items properly set up in inventory.
Management’s Response:
Management concurs with the finding.
Finding 2022-003
Federal Agency: Department of Agriculture
Federal Program: Food Distribution Cluster
CFDA: #10.568, 10.569
Compliance Requirement: Special Tests and Provisions – Accountability for USDA Foods
Type of Finding: Significant Deficiency in Internal Controls over Compliance
Repeat Finding: Yes – 2021-003
Criteria:
7 CFR §250.19 Recordkeeping Requirements
Accurate and complete records must be maintained with respect to the receipt, distribution/use, and inventory of USDA Foods. Failure of the distributing agency to comply with recordkeeping requirements
must be considered prima facie evidence of improper distribution or loss of donated foods and may result in a claim against such party for the loss or misuse of donated foods. In addition, records relating to the
requirements for donated foods must be retained for a period of three years from the close of the fiscal year to which they pertain.
Condition:
The Organization requires subrecipients to sign an invoice indicating their pick-up of USDA items taken out of the Organization’s inventory. From a sample of twenty-five (25) USDA distributions taken out of or
returned to the Organization’s inventory, (1) sample had ship date different from the date distributed.
Question Costs:
N/A
Context:
The Organization has a policy whereby USDA products distributed are invoiced to receiving agency and agency signs to indicate their receipt of USDA items.
Cause:
Controls were not in place to ensure all inventory transactions are properly documented with signature for inspections upon disbursement of inventory.
Effects:
Inventories may not be accounted for properly.
Recommendations:
We recommend original records relating to the requirements for distributed foods be retained for the required period.
Management’s Response:
Management concurs with the finding.
Finding 2022-001
Federal Agency: Department of Agriculture
Federal Program: Food Distribution Cluster
CFDA: #10.568, 10.569
Compliance Requirement: Eligibility for Subrecipients
Type of Finding: Significant Deficiency in Internal Controls over Compliance
Repeat Finding: Yes – 2021-001
Criteria:
7 CFR §251.3(d) and §251.5(a) – Eligibility for Subrecipients
Prior to making commodities available, eligible recipient agencies to which the state agency has delegated responsibility for the distribution of The Emergency Food Assistance Program (“TEFAP”) commodities must
ensure that an organization applying for participation in the program meets the definition of an “eligible recipient agency”. An eligible recipient agency means an organization which is either public, or is private,
possessing tax exempt status. Private organizations possessing tax exempt status must (i) be currently operating another federal program requiring tax-exempt status under the Internal Revenue Code (“IRC”), or
(ii) possess documentation from the Internal Revenue Service (“IRS”) recognizing tax-exempt status under the IRC, or (iii) if not in possession of such documentation, be automatically tax exempt as “organized or
operated exclusively for religious purposes” under the IRC.
Condition:
From a sample of twenty-five (25) agencies who distributed TEFAP products during the fiscal year, the following exception was noted:
* One (1) agency did not have a FY21-22 TEFAP agreement on file.
Question Costs:
N/A
Context:
The Organization has a policy whereby an agency’s eligibility status is checked by either reviewing the IRS website to ensure an entity’s tax-exempt status, or obtaining documentation from an entity verifying the
entity is automatically tax-exempt by being an organization organized or operated exclusively for religious purposes. The entity in question was noted as a church.
Cause:
Controls were not in place to ensure eligibility status is documented and filed with the subrecipient’s file prior to distribution.
Effects:
Ineligible subrecipients may receive TEFAP products. Recommendations:
We recommend controls be strengthened to ensure eligibility status is confirmed and support is maintained verifying a subrecipient is eligible to received TEFAP products each year during recertification and when
new subrecipients are added during the year. In order for a subrecipient to be eligible to receive TEFAP products, the subrecipient must be tagged as such in the inventory system. We recommend the
Organization strengthen its internal controls to include maintaining a checklist to be included in each distributing agency’s file which includes the check for documentation supporting the agency’s eligibility
including each required document. The forms should be reviewed to ensure proper verification was made and all contracts are signed and dated by both the agency and the Organization. A check could also be
made that the agency was properly set up and eligible qualifiers checked in the inventory system. At the beginning of each fiscal year, a report should be reviewed of all agencies and their qualifiers. This should be
checked against the agencies’ files to ensure 1) the removal of any qualifiers for which documentation has not been received, and 2) follow-up of agencies to obtain the necessary documents. This will ensure
completeness, timeliness, and consistency among all agencies and all documents.
Management’s Response:
Management concurs with the finding.
Finding 2022-002
Federal Agency: Department of Agriculture
Federal Program: Food Distribution Cluster
CFDA: #10.568, 10.569
Compliance Requirement: Special Tests and Provisions – Accountability for USDA Foods
Type of Finding: Significant Deficiency in Internal Controls over Compliance
Repeat Finding: Yes – 2021-002
Criteria:
7 CFR §250.19 Recordkeeping Requirements
Accurate and complete records must be maintained with respect to the receipt, distribution/use, and inventory of USDA Foods.
Condition:
When products are received, a bill of lading from the trucking company is received with the goods. Two people in the warehouse count and weigh the products and verify that their count, weight, and date of
receipt agree to the bill of lading as indicated by their signature on the bill of lading. Received items are inspected for damage, physical condition, temperature (on refrigerated/frozen product), visual quality, and
package dates, etc. From a sample of twenty-five (25) donated items, one (1) donation had no indication included in bill of lading denoting the item was a TEFAP product.
Question Costs:
N/A
Context:
The Organization has a policy whereby USDA products received are inspected, counted, and weighed. The completion of the inspection is noted indicated with a signature on the bill of lading.
Cause:
Controls were not in place to ensure all inventory transactions were properly documented with signature of inspections upon receipt of inventory.
Effects:
Inventories may not be accounted for properly.
Recommendations:
We recommend controls be strengthened to ensure all donations are supported with verification of count, weight, and other inspection of the product as evidenced through signature of the person(s) receiving
inventory items. This could be made through a checklist attached to the bill of lading and used with entering the items into the inventory system that includes verification was properly made and items properly set up in inventory.
Management’s Response:
Management concurs with the finding.
Finding 2022-003
Federal Agency: Department of Agriculture
Federal Program: Food Distribution Cluster
CFDA: #10.568, 10.569
Compliance Requirement: Special Tests and Provisions – Accountability for USDA Foods
Type of Finding: Significant Deficiency in Internal Controls over Compliance
Repeat Finding: Yes – 2021-003
Criteria:
7 CFR §250.19 Recordkeeping Requirements
Accurate and complete records must be maintained with respect to the receipt, distribution/use, and inventory of USDA Foods. Failure of the distributing agency to comply with recordkeeping requirements
must be considered prima facie evidence of improper distribution or loss of donated foods and may result in a claim against such party for the loss or misuse of donated foods. In addition, records relating to the
requirements for donated foods must be retained for a period of three years from the close of the fiscal year to which they pertain.
Condition:
The Organization requires subrecipients to sign an invoice indicating their pick-up of USDA items taken out of the Organization’s inventory. From a sample of twenty-five (25) USDA distributions taken out of or
returned to the Organization’s inventory, (1) sample had ship date different from the date distributed.
Question Costs:
N/A
Context:
The Organization has a policy whereby USDA products distributed are invoiced to receiving agency and agency signs to indicate their receipt of USDA items.
Cause:
Controls were not in place to ensure all inventory transactions are properly documented with signature for inspections upon disbursement of inventory.
Effects:
Inventories may not be accounted for properly.
Recommendations:
We recommend original records relating to the requirements for distributed foods be retained for the required period.
Management’s Response:
Management concurs with the finding.
Finding 2022-001
Federal Agency: Department of Agriculture
Federal Program: Food Distribution Cluster
CFDA: #10.568, 10.569
Compliance Requirement: Eligibility for Subrecipients
Type of Finding: Significant Deficiency in Internal Controls over Compliance
Repeat Finding: Yes – 2021-001
Criteria:
7 CFR §251.3(d) and §251.5(a) – Eligibility for Subrecipients
Prior to making commodities available, eligible recipient agencies to which the state agency has delegated responsibility for the distribution of The Emergency Food Assistance Program (“TEFAP”) commodities must
ensure that an organization applying for participation in the program meets the definition of an “eligible recipient agency”. An eligible recipient agency means an organization which is either public, or is private,
possessing tax exempt status. Private organizations possessing tax exempt status must (i) be currently operating another federal program requiring tax-exempt status under the Internal Revenue Code (“IRC”), or
(ii) possess documentation from the Internal Revenue Service (“IRS”) recognizing tax-exempt status under the IRC, or (iii) if not in possession of such documentation, be automatically tax exempt as “organized or
operated exclusively for religious purposes” under the IRC.
Condition:
From a sample of twenty-five (25) agencies who distributed TEFAP products during the fiscal year, the following exception was noted:
* One (1) agency did not have a FY21-22 TEFAP agreement on file.
Question Costs:
N/A
Context:
The Organization has a policy whereby an agency’s eligibility status is checked by either reviewing the IRS website to ensure an entity’s tax-exempt status, or obtaining documentation from an entity verifying the
entity is automatically tax-exempt by being an organization organized or operated exclusively for religious purposes. The entity in question was noted as a church.
Cause:
Controls were not in place to ensure eligibility status is documented and filed with the subrecipient’s file prior to distribution.
Effects:
Ineligible subrecipients may receive TEFAP products. Recommendations:
We recommend controls be strengthened to ensure eligibility status is confirmed and support is maintained verifying a subrecipient is eligible to received TEFAP products each year during recertification and when
new subrecipients are added during the year. In order for a subrecipient to be eligible to receive TEFAP products, the subrecipient must be tagged as such in the inventory system. We recommend the
Organization strengthen its internal controls to include maintaining a checklist to be included in each distributing agency’s file which includes the check for documentation supporting the agency’s eligibility
including each required document. The forms should be reviewed to ensure proper verification was made and all contracts are signed and dated by both the agency and the Organization. A check could also be
made that the agency was properly set up and eligible qualifiers checked in the inventory system. At the beginning of each fiscal year, a report should be reviewed of all agencies and their qualifiers. This should be
checked against the agencies’ files to ensure 1) the removal of any qualifiers for which documentation has not been received, and 2) follow-up of agencies to obtain the necessary documents. This will ensure
completeness, timeliness, and consistency among all agencies and all documents.
Management’s Response:
Management concurs with the finding.
Finding 2022-002
Federal Agency: Department of Agriculture
Federal Program: Food Distribution Cluster
CFDA: #10.568, 10.569
Compliance Requirement: Special Tests and Provisions – Accountability for USDA Foods
Type of Finding: Significant Deficiency in Internal Controls over Compliance
Repeat Finding: Yes – 2021-002
Criteria:
7 CFR §250.19 Recordkeeping Requirements
Accurate and complete records must be maintained with respect to the receipt, distribution/use, and inventory of USDA Foods.
Condition:
When products are received, a bill of lading from the trucking company is received with the goods. Two people in the warehouse count and weigh the products and verify that their count, weight, and date of
receipt agree to the bill of lading as indicated by their signature on the bill of lading. Received items are inspected for damage, physical condition, temperature (on refrigerated/frozen product), visual quality, and
package dates, etc. From a sample of twenty-five (25) donated items, one (1) donation had no indication included in bill of lading denoting the item was a TEFAP product.
Question Costs:
N/A
Context:
The Organization has a policy whereby USDA products received are inspected, counted, and weighed. The completion of the inspection is noted indicated with a signature on the bill of lading.
Cause:
Controls were not in place to ensure all inventory transactions were properly documented with signature of inspections upon receipt of inventory.
Effects:
Inventories may not be accounted for properly.
Recommendations:
We recommend controls be strengthened to ensure all donations are supported with verification of count, weight, and other inspection of the product as evidenced through signature of the person(s) receiving
inventory items. This could be made through a checklist attached to the bill of lading and used with entering the items into the inventory system that includes verification was properly made and items properly set up in inventory.
Management’s Response:
Management concurs with the finding.
Finding 2022-003
Federal Agency: Department of Agriculture
Federal Program: Food Distribution Cluster
CFDA: #10.568, 10.569
Compliance Requirement: Special Tests and Provisions – Accountability for USDA Foods
Type of Finding: Significant Deficiency in Internal Controls over Compliance
Repeat Finding: Yes – 2021-003
Criteria:
7 CFR §250.19 Recordkeeping Requirements
Accurate and complete records must be maintained with respect to the receipt, distribution/use, and inventory of USDA Foods. Failure of the distributing agency to comply with recordkeeping requirements
must be considered prima facie evidence of improper distribution or loss of donated foods and may result in a claim against such party for the loss or misuse of donated foods. In addition, records relating to the
requirements for donated foods must be retained for a period of three years from the close of the fiscal year to which they pertain.
Condition:
The Organization requires subrecipients to sign an invoice indicating their pick-up of USDA items taken out of the Organization’s inventory. From a sample of twenty-five (25) USDA distributions taken out of or
returned to the Organization’s inventory, (1) sample had ship date different from the date distributed.
Question Costs:
N/A
Context:
The Organization has a policy whereby USDA products distributed are invoiced to receiving agency and agency signs to indicate their receipt of USDA items.
Cause:
Controls were not in place to ensure all inventory transactions are properly documented with signature for inspections upon disbursement of inventory.
Effects:
Inventories may not be accounted for properly.
Recommendations:
We recommend original records relating to the requirements for distributed foods be retained for the required period.
Management’s Response:
Management concurs with the finding.
Finding 2022-001
Federal Agency: Department of Agriculture
Federal Program: Food Distribution Cluster
CFDA: #10.568, 10.569
Compliance Requirement: Eligibility for Subrecipients
Type of Finding: Significant Deficiency in Internal Controls over Compliance
Repeat Finding: Yes – 2021-001
Criteria:
7 CFR §251.3(d) and §251.5(a) – Eligibility for Subrecipients
Prior to making commodities available, eligible recipient agencies to which the state agency has delegated responsibility for the distribution of The Emergency Food Assistance Program (“TEFAP”) commodities must
ensure that an organization applying for participation in the program meets the definition of an “eligible recipient agency”. An eligible recipient agency means an organization which is either public, or is private,
possessing tax exempt status. Private organizations possessing tax exempt status must (i) be currently operating another federal program requiring tax-exempt status under the Internal Revenue Code (“IRC”), or
(ii) possess documentation from the Internal Revenue Service (“IRS”) recognizing tax-exempt status under the IRC, or (iii) if not in possession of such documentation, be automatically tax exempt as “organized or
operated exclusively for religious purposes” under the IRC.
Condition:
From a sample of twenty-five (25) agencies who distributed TEFAP products during the fiscal year, the following exception was noted:
* One (1) agency did not have a FY21-22 TEFAP agreement on file.
Question Costs:
N/A
Context:
The Organization has a policy whereby an agency’s eligibility status is checked by either reviewing the IRS website to ensure an entity’s tax-exempt status, or obtaining documentation from an entity verifying the
entity is automatically tax-exempt by being an organization organized or operated exclusively for religious purposes. The entity in question was noted as a church.
Cause:
Controls were not in place to ensure eligibility status is documented and filed with the subrecipient’s file prior to distribution.
Effects:
Ineligible subrecipients may receive TEFAP products. Recommendations:
We recommend controls be strengthened to ensure eligibility status is confirmed and support is maintained verifying a subrecipient is eligible to received TEFAP products each year during recertification and when
new subrecipients are added during the year. In order for a subrecipient to be eligible to receive TEFAP products, the subrecipient must be tagged as such in the inventory system. We recommend the
Organization strengthen its internal controls to include maintaining a checklist to be included in each distributing agency’s file which includes the check for documentation supporting the agency’s eligibility
including each required document. The forms should be reviewed to ensure proper verification was made and all contracts are signed and dated by both the agency and the Organization. A check could also be
made that the agency was properly set up and eligible qualifiers checked in the inventory system. At the beginning of each fiscal year, a report should be reviewed of all agencies and their qualifiers. This should be
checked against the agencies’ files to ensure 1) the removal of any qualifiers for which documentation has not been received, and 2) follow-up of agencies to obtain the necessary documents. This will ensure
completeness, timeliness, and consistency among all agencies and all documents.
Management’s Response:
Management concurs with the finding.
Finding 2022-002
Federal Agency: Department of Agriculture
Federal Program: Food Distribution Cluster
CFDA: #10.568, 10.569
Compliance Requirement: Special Tests and Provisions – Accountability for USDA Foods
Type of Finding: Significant Deficiency in Internal Controls over Compliance
Repeat Finding: Yes – 2021-002
Criteria:
7 CFR §250.19 Recordkeeping Requirements
Accurate and complete records must be maintained with respect to the receipt, distribution/use, and inventory of USDA Foods.
Condition:
When products are received, a bill of lading from the trucking company is received with the goods. Two people in the warehouse count and weigh the products and verify that their count, weight, and date of
receipt agree to the bill of lading as indicated by their signature on the bill of lading. Received items are inspected for damage, physical condition, temperature (on refrigerated/frozen product), visual quality, and
package dates, etc. From a sample of twenty-five (25) donated items, one (1) donation had no indication included in bill of lading denoting the item was a TEFAP product.
Question Costs:
N/A
Context:
The Organization has a policy whereby USDA products received are inspected, counted, and weighed. The completion of the inspection is noted indicated with a signature on the bill of lading.
Cause:
Controls were not in place to ensure all inventory transactions were properly documented with signature of inspections upon receipt of inventory.
Effects:
Inventories may not be accounted for properly.
Recommendations:
We recommend controls be strengthened to ensure all donations are supported with verification of count, weight, and other inspection of the product as evidenced through signature of the person(s) receiving
inventory items. This could be made through a checklist attached to the bill of lading and used with entering the items into the inventory system that includes verification was properly made and items properly set up in inventory.
Management’s Response:
Management concurs with the finding.
Finding 2022-003
Federal Agency: Department of Agriculture
Federal Program: Food Distribution Cluster
CFDA: #10.568, 10.569
Compliance Requirement: Special Tests and Provisions – Accountability for USDA Foods
Type of Finding: Significant Deficiency in Internal Controls over Compliance
Repeat Finding: Yes – 2021-003
Criteria:
7 CFR §250.19 Recordkeeping Requirements
Accurate and complete records must be maintained with respect to the receipt, distribution/use, and inventory of USDA Foods. Failure of the distributing agency to comply with recordkeeping requirements
must be considered prima facie evidence of improper distribution or loss of donated foods and may result in a claim against such party for the loss or misuse of donated foods. In addition, records relating to the
requirements for donated foods must be retained for a period of three years from the close of the fiscal year to which they pertain.
Condition:
The Organization requires subrecipients to sign an invoice indicating their pick-up of USDA items taken out of the Organization’s inventory. From a sample of twenty-five (25) USDA distributions taken out of or
returned to the Organization’s inventory, (1) sample had ship date different from the date distributed.
Question Costs:
N/A
Context:
The Organization has a policy whereby USDA products distributed are invoiced to receiving agency and agency signs to indicate their receipt of USDA items.
Cause:
Controls were not in place to ensure all inventory transactions are properly documented with signature for inspections upon disbursement of inventory.
Effects:
Inventories may not be accounted for properly.
Recommendations:
We recommend original records relating to the requirements for distributed foods be retained for the required period.
Management’s Response:
Management concurs with the finding.