U.S. Department of Agriculture
Federal Financial Assistance Listing # 10.565 All Awards
Federal Financial Assistance Listing # 10.568 All Awards
Federal Financial Assistance Listing # 10.569 All Awards
Food Distribution Cluster
Eligibility
Significant Deficiency in Internal Control over Compliance and Noncompliance
Criteria – A good system of internal controls includes a process to ensure that eligibility determinations for the program are appropriate. This includes a process to ensure proper completion of all tracking forms and documentation, including documented reviews.
Condition – During our review of the eligibility determinations, it was identified that there were various instances where applications or other determinations and reviews were not completed timely or completely. The forms were missing signatures of participants or a documented review process or were completed after the prior forms expiration dates.
Cause – Due to oversight by management, all forms were not completed and documented within participant files. This was largely due to differences in fiscal years, calendar years, and terms of the applications and certifications not being appropriately considered when completing and monitoring the various eligibility documents.
Effect – The Organization’s internal control process was not appropriately enforced and monitored, resulting in lack of timely documentation of eligibility determination. However, it is noted that the individual participants and agencies were determined to be eligible for the program.
Questioned Costs – $7,964.
Context/Sampling – A nonstatistical sample of 60 participants within CSFP out of a population of over 250 were selected for eligibility testing. 17 out of the 60 eligibility determinations tested had an error. An additional nonstatistical sample of 30 participating agencies within TEFAP out of a population of 148 were selected for eligibility testing. 5 out of the 30 eligibility determinations tested had an error, with 1 of those resulting in questioned costs, as reported above.
Repeat Finding from Prior Year(s) – Yes.
Recommendation – Management should implement internal controls to ensure all eligibility determination reviews are documented and retained in the file and consideration is appropriately given to fiscal year, calendar year, and application terms.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture
Federal Financial Assistance Listing # 10.565 All Awards
Federal Financial Assistance Listing # 10.568 All Awards
Food Distribution Cluster
Activities Allowed/Unallowed and Allowable Costs/Cost Principles
Significant Deficiency in Internal Control over Compliance
Criteria – A good system of internal controls includes a process to ensure that all costs are appropriately allocated to the programs.
Condition – As part of our audit, it was identified that there were multiple payroll allocation errors that were not identified by management. It was determined that some errors resulted in overallocation of costs while others in underallocation of costs.
Cause – No formal review was completed of the allocations before or after each payroll. This resulted in incorrect amounts being allocated to the programs.
Effect – The failure to adequately review payroll allocations resulted in incorrect charges to the program.
Questioned Costs – None Reported.
Context/Sampling – A nonstatistical sample of 8 pay periods out of a population of 26 pay periods were selected for testing. 6 pay periods had an error.
Repeat Finding from Prior Year(s) – Yes.
Recommendation – It is recommended that the Organization implement processes and controls to ensure that payroll allocations are reviewed and approved with each payroll processed.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture
Federal Financial Assistance Listing # 10.565 All Awards
Federal Financial Assistance Listing # 10.568 All Awards
Federal Financial Assistance Listing # 10.569 All Awards
Food Distribution Cluster
Eligibility
Significant Deficiency in Internal Control over Compliance and Noncompliance
Criteria – A good system of internal controls includes a process to ensure that eligibility determinations for the program are appropriate. This includes a process to ensure proper completion of all tracking forms and documentation, including documented reviews.
Condition – During our review of the eligibility determinations, it was identified that there were various instances where applications or other determinations and reviews were not completed timely or completely. The forms were missing signatures of participants or a documented review process or were completed after the prior forms expiration dates.
Cause – Due to oversight by management, all forms were not completed and documented within participant files. This was largely due to differences in fiscal years, calendar years, and terms of the applications and certifications not being appropriately considered when completing and monitoring the various eligibility documents.
Effect – The Organization’s internal control process was not appropriately enforced and monitored, resulting in lack of timely documentation of eligibility determination. However, it is noted that the individual participants and agencies were determined to be eligible for the program.
Questioned Costs – $7,964.
Context/Sampling – A nonstatistical sample of 60 participants within CSFP out of a population of over 250 were selected for eligibility testing. 17 out of the 60 eligibility determinations tested had an error. An additional nonstatistical sample of 30 participating agencies within TEFAP out of a population of 148 were selected for eligibility testing. 5 out of the 30 eligibility determinations tested had an error, with 1 of those resulting in questioned costs, as reported above.
Repeat Finding from Prior Year(s) – Yes.
Recommendation – Management should implement internal controls to ensure all eligibility determination reviews are documented and retained in the file and consideration is appropriately given to fiscal year, calendar year, and application terms.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture
Federal Financial Assistance Listing # 10.565 All Awards
Federal Financial Assistance Listing # 10.568 All Awards
Food Distribution Cluster
Activities Allowed/Unallowed and Allowable Costs/Cost Principles
Significant Deficiency in Internal Control over Compliance
Criteria – A good system of internal controls includes a process to ensure that all costs are appropriately allocated to the programs.
Condition – As part of our audit, it was identified that there were multiple payroll allocation errors that were not identified by management. It was determined that some errors resulted in overallocation of costs while others in underallocation of costs.
Cause – No formal review was completed of the allocations before or after each payroll. This resulted in incorrect amounts being allocated to the programs.
Effect – The failure to adequately review payroll allocations resulted in incorrect charges to the program.
Questioned Costs – None Reported.
Context/Sampling – A nonstatistical sample of 8 pay periods out of a population of 26 pay periods were selected for testing. 6 pay periods had an error.
Repeat Finding from Prior Year(s) – Yes.
Recommendation – It is recommended that the Organization implement processes and controls to ensure that payroll allocations are reviewed and approved with each payroll processed.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture
Federal Financial Assistance Listing # 10.565 All Awards
Federal Financial Assistance Listing # 10.568 All Awards
Federal Financial Assistance Listing # 10.569 All Awards
Food Distribution Cluster
Eligibility
Significant Deficiency in Internal Control over Compliance and Noncompliance
Criteria – A good system of internal controls includes a process to ensure that eligibility determinations for the program are appropriate. This includes a process to ensure proper completion of all tracking forms and documentation, including documented reviews.
Condition – During our review of the eligibility determinations, it was identified that there were various instances where applications or other determinations and reviews were not completed timely or completely. The forms were missing signatures of participants or a documented review process or were completed after the prior forms expiration dates.
Cause – Due to oversight by management, all forms were not completed and documented within participant files. This was largely due to differences in fiscal years, calendar years, and terms of the applications and certifications not being appropriately considered when completing and monitoring the various eligibility documents.
Effect – The Organization’s internal control process was not appropriately enforced and monitored, resulting in lack of timely documentation of eligibility determination. However, it is noted that the individual participants and agencies were determined to be eligible for the program.
Questioned Costs – $7,964.
Context/Sampling – A nonstatistical sample of 60 participants within CSFP out of a population of over 250 were selected for eligibility testing. 17 out of the 60 eligibility determinations tested had an error. An additional nonstatistical sample of 30 participating agencies within TEFAP out of a population of 148 were selected for eligibility testing. 5 out of the 30 eligibility determinations tested had an error, with 1 of those resulting in questioned costs, as reported above.
Repeat Finding from Prior Year(s) – Yes.
Recommendation – Management should implement internal controls to ensure all eligibility determination reviews are documented and retained in the file and consideration is appropriately given to fiscal year, calendar year, and application terms.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture
Federal Financial Assistance Listing # 10.565 All Awards
Federal Financial Assistance Listing # 10.568 All Awards
Food Distribution Cluster
Activities Allowed/Unallowed and Allowable Costs/Cost Principles
Significant Deficiency in Internal Control over Compliance
Criteria – A good system of internal controls includes a process to ensure that all costs are appropriately allocated to the programs.
Condition – As part of our audit, it was identified that there were multiple payroll allocation errors that were not identified by management. It was determined that some errors resulted in overallocation of costs while others in underallocation of costs.
Cause – No formal review was completed of the allocations before or after each payroll. This resulted in incorrect amounts being allocated to the programs.
Effect – The failure to adequately review payroll allocations resulted in incorrect charges to the program.
Questioned Costs – None Reported.
Context/Sampling – A nonstatistical sample of 8 pay periods out of a population of 26 pay periods were selected for testing. 6 pay periods had an error.
Repeat Finding from Prior Year(s) – Yes.
Recommendation – It is recommended that the Organization implement processes and controls to ensure that payroll allocations are reviewed and approved with each payroll processed.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture
Federal Financial Assistance Listing # 10.565 All Awards
Federal Financial Assistance Listing # 10.568 All Awards
Federal Financial Assistance Listing # 10.569 All Awards
Food Distribution Cluster
Eligibility
Significant Deficiency in Internal Control over Compliance and Noncompliance
Criteria – A good system of internal controls includes a process to ensure that eligibility determinations for the program are appropriate. This includes a process to ensure proper completion of all tracking forms and documentation, including documented reviews.
Condition – During our review of the eligibility determinations, it was identified that there were various instances where applications or other determinations and reviews were not completed timely or completely. The forms were missing signatures of participants or a documented review process or were completed after the prior forms expiration dates.
Cause – Due to oversight by management, all forms were not completed and documented within participant files. This was largely due to differences in fiscal years, calendar years, and terms of the applications and certifications not being appropriately considered when completing and monitoring the various eligibility documents.
Effect – The Organization’s internal control process was not appropriately enforced and monitored, resulting in lack of timely documentation of eligibility determination. However, it is noted that the individual participants and agencies were determined to be eligible for the program.
Questioned Costs – $7,964.
Context/Sampling – A nonstatistical sample of 60 participants within CSFP out of a population of over 250 were selected for eligibility testing. 17 out of the 60 eligibility determinations tested had an error. An additional nonstatistical sample of 30 participating agencies within TEFAP out of a population of 148 were selected for eligibility testing. 5 out of the 30 eligibility determinations tested had an error, with 1 of those resulting in questioned costs, as reported above.
Repeat Finding from Prior Year(s) – Yes.
Recommendation – Management should implement internal controls to ensure all eligibility determination reviews are documented and retained in the file and consideration is appropriately given to fiscal year, calendar year, and application terms.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture
Federal Financial Assistance Listing # 10.565 All Awards
Federal Financial Assistance Listing # 10.568 All Awards
Food Distribution Cluster
Activities Allowed/Unallowed and Allowable Costs/Cost Principles
Significant Deficiency in Internal Control over Compliance
Criteria – A good system of internal controls includes a process to ensure that all costs are appropriately allocated to the programs.
Condition – As part of our audit, it was identified that there were multiple payroll allocation errors that were not identified by management. It was determined that some errors resulted in overallocation of costs while others in underallocation of costs.
Cause – No formal review was completed of the allocations before or after each payroll. This resulted in incorrect amounts being allocated to the programs.
Effect – The failure to adequately review payroll allocations resulted in incorrect charges to the program.
Questioned Costs – None Reported.
Context/Sampling – A nonstatistical sample of 8 pay periods out of a population of 26 pay periods were selected for testing. 6 pay periods had an error.
Repeat Finding from Prior Year(s) – Yes.
Recommendation – It is recommended that the Organization implement processes and controls to ensure that payroll allocations are reviewed and approved with each payroll processed.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture
Federal Financial Assistance Listing # 10.565 All Awards
Federal Financial Assistance Listing # 10.568 All Awards
Federal Financial Assistance Listing # 10.569 All Awards
Food Distribution Cluster
Eligibility
Significant Deficiency in Internal Control over Compliance and Noncompliance
Criteria – A good system of internal controls includes a process to ensure that eligibility determinations for the program are appropriate. This includes a process to ensure proper completion of all tracking forms and documentation, including documented reviews.
Condition – During our review of the eligibility determinations, it was identified that there were various instances where applications or other determinations and reviews were not completed timely or completely. The forms were missing signatures of participants or a documented review process or were completed after the prior forms expiration dates.
Cause – Due to oversight by management, all forms were not completed and documented within participant files. This was largely due to differences in fiscal years, calendar years, and terms of the applications and certifications not being appropriately considered when completing and monitoring the various eligibility documents.
Effect – The Organization’s internal control process was not appropriately enforced and monitored, resulting in lack of timely documentation of eligibility determination. However, it is noted that the individual participants and agencies were determined to be eligible for the program.
Questioned Costs – $7,964.
Context/Sampling – A nonstatistical sample of 60 participants within CSFP out of a population of over 250 were selected for eligibility testing. 17 out of the 60 eligibility determinations tested had an error. An additional nonstatistical sample of 30 participating agencies within TEFAP out of a population of 148 were selected for eligibility testing. 5 out of the 30 eligibility determinations tested had an error, with 1 of those resulting in questioned costs, as reported above.
Repeat Finding from Prior Year(s) – Yes.
Recommendation – Management should implement internal controls to ensure all eligibility determination reviews are documented and retained in the file and consideration is appropriately given to fiscal year, calendar year, and application terms.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture
Federal Financial Assistance Listing # 10.565 All Awards
Federal Financial Assistance Listing # 10.568 All Awards
Food Distribution Cluster
Activities Allowed/Unallowed and Allowable Costs/Cost Principles
Significant Deficiency in Internal Control over Compliance
Criteria – A good system of internal controls includes a process to ensure that all costs are appropriately allocated to the programs.
Condition – As part of our audit, it was identified that there were multiple payroll allocation errors that were not identified by management. It was determined that some errors resulted in overallocation of costs while others in underallocation of costs.
Cause – No formal review was completed of the allocations before or after each payroll. This resulted in incorrect amounts being allocated to the programs.
Effect – The failure to adequately review payroll allocations resulted in incorrect charges to the program.
Questioned Costs – None Reported.
Context/Sampling – A nonstatistical sample of 8 pay periods out of a population of 26 pay periods were selected for testing. 6 pay periods had an error.
Repeat Finding from Prior Year(s) – Yes.
Recommendation – It is recommended that the Organization implement processes and controls to ensure that payroll allocations are reviewed and approved with each payroll processed.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture
Federal Financial Assistance Listing # 10.569 All Awards
Food Distribution Cluster
Special Tests and Provisions
Material Weakness in Internal Control over Compliance
Criteria – A good system of internal accounting control should provide for the consistent processes and controls between locations for the receipt, distribution, and counting of inventory at year-end and throughout the fiscal year.
Condition – The Organization does not have consistent and effective controls in place over inventory to properly track, record, and count warehouse inventory at the two main locations.
Cause – This deficiency is due to changes in staff and facility changes, resulting in inconsistent processes and controls between warehouse locations.
Effect – Inadequate controls over the inventory processes have the potential to result in incorrect recording of inventory ending balances.
Questioned Costs – None Reported.
Context/Sampling – Statistical sampling was not utilized for year-end inventory observation procedures. As part of inventory observation procedures at the Fargo warehouse, 12 list to floor USDA selections were counted and 3 additional USDA floor to list selections were counted. As part of inventory observation procedures at the Bismarck warehouse, 14 list to floor USDA selections were counted and 3 additional USDA floor to list selections were counted.
Repeat Finding from Prior Year(s) – No.
Recommendation – It is the responsibility of management to review process and their implementation to ensure consistency and effectiveness throughout the Organization. It is the recommendation that these processes be reviewed and revised regularly, as necessary to ensure the processes are consistent and evolving with the changes of the Organization.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture
Federal Financial Assistance Listing # 10.565 All Awards
Federal Financial Assistance Listing # 10.568 All Awards
Federal Financial Assistance Listing # 10.569 All Awards
Food Distribution Cluster
Eligibility
Significant Deficiency in Internal Control over Compliance and Noncompliance
Criteria – A good system of internal controls includes a process to ensure that eligibility determinations for the program are appropriate. This includes a process to ensure proper completion of all tracking forms and documentation, including documented reviews.
Condition – During our review of the eligibility determinations, it was identified that there were various instances where applications or other determinations and reviews were not completed timely or completely. The forms were missing signatures of participants or a documented review process or were completed after the prior forms expiration dates.
Cause – Due to oversight by management, all forms were not completed and documented within participant files. This was largely due to differences in fiscal years, calendar years, and terms of the applications and certifications not being appropriately considered when completing and monitoring the various eligibility documents.
Effect – The Organization’s internal control process was not appropriately enforced and monitored, resulting in lack of timely documentation of eligibility determination. However, it is noted that the individual participants and agencies were determined to be eligible for the program.
Questioned Costs – $7,964.
Context/Sampling – A nonstatistical sample of 60 participants within CSFP out of a population of over 250 were selected for eligibility testing. 17 out of the 60 eligibility determinations tested had an error. An additional nonstatistical sample of 30 participating agencies within TEFAP out of a population of 148 were selected for eligibility testing. 5 out of the 30 eligibility determinations tested had an error, with 1 of those resulting in questioned costs, as reported above.
Repeat Finding from Prior Year(s) – Yes.
Recommendation – Management should implement internal controls to ensure all eligibility determination reviews are documented and retained in the file and consideration is appropriately given to fiscal year, calendar year, and application terms.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture
Federal Financial Assistance Listing # 10.569 All Awards
Food Distribution Cluster
Special Tests and Provisions
Material Weakness in Internal Control over Compliance
Criteria – A good system of internal accounting control should provide for the consistent processes and controls between locations for the receipt, distribution, and counting of inventory at year-end and throughout the fiscal year.
Condition – The Organization does not have consistent and effective controls in place over inventory to properly track, record, and count warehouse inventory at the two main locations.
Cause – This deficiency is due to changes in staff and facility changes, resulting in inconsistent processes and controls between warehouse locations.
Effect – Inadequate controls over the inventory processes have the potential to result in incorrect recording of inventory ending balances.
Questioned Costs – None Reported.
Context/Sampling – Statistical sampling was not utilized for year-end inventory observation procedures. As part of inventory observation procedures at the Fargo warehouse, 12 list to floor USDA selections were counted and 3 additional USDA floor to list selections were counted. As part of inventory observation procedures at the Bismarck warehouse, 14 list to floor USDA selections were counted and 3 additional USDA floor to list selections were counted.
Repeat Finding from Prior Year(s) – No.
Recommendation – It is the responsibility of management to review process and their implementation to ensure consistency and effectiveness throughout the Organization. It is the recommendation that these processes be reviewed and revised regularly, as necessary to ensure the processes are consistent and evolving with the changes of the Organization.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture
Federal Financial Assistance Listing # 10.565 All Awards
Federal Financial Assistance Listing # 10.568 All Awards
Federal Financial Assistance Listing # 10.569 All Awards
Food Distribution Cluster
Eligibility
Significant Deficiency in Internal Control over Compliance and Noncompliance
Criteria – A good system of internal controls includes a process to ensure that eligibility determinations for the program are appropriate. This includes a process to ensure proper completion of all tracking forms and documentation, including documented reviews.
Condition – During our review of the eligibility determinations, it was identified that there were various instances where applications or other determinations and reviews were not completed timely or completely. The forms were missing signatures of participants or a documented review process or were completed after the prior forms expiration dates.
Cause – Due to oversight by management, all forms were not completed and documented within participant files. This was largely due to differences in fiscal years, calendar years, and terms of the applications and certifications not being appropriately considered when completing and monitoring the various eligibility documents.
Effect – The Organization’s internal control process was not appropriately enforced and monitored, resulting in lack of timely documentation of eligibility determination. However, it is noted that the individual participants and agencies were determined to be eligible for the program.
Questioned Costs – $7,964.
Context/Sampling – A nonstatistical sample of 60 participants within CSFP out of a population of over 250 were selected for eligibility testing. 17 out of the 60 eligibility determinations tested had an error. An additional nonstatistical sample of 30 participating agencies within TEFAP out of a population of 148 were selected for eligibility testing. 5 out of the 30 eligibility determinations tested had an error, with 1 of those resulting in questioned costs, as reported above.
Repeat Finding from Prior Year(s) – Yes.
Recommendation – Management should implement internal controls to ensure all eligibility determination reviews are documented and retained in the file and consideration is appropriately given to fiscal year, calendar year, and application terms.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture
Federal Financial Assistance Listing # 10.565 All Awards
Federal Financial Assistance Listing # 10.568 All Awards
Federal Financial Assistance Listing # 10.569 All Awards
Food Distribution Cluster
Eligibility
Significant Deficiency in Internal Control over Compliance and Noncompliance
Criteria – A good system of internal controls includes a process to ensure that eligibility determinations for the program are appropriate. This includes a process to ensure proper completion of all tracking forms and documentation, including documented reviews.
Condition – During our review of the eligibility determinations, it was identified that there were various instances where applications or other determinations and reviews were not completed timely or completely. The forms were missing signatures of participants or a documented review process or were completed after the prior forms expiration dates.
Cause – Due to oversight by management, all forms were not completed and documented within participant files. This was largely due to differences in fiscal years, calendar years, and terms of the applications and certifications not being appropriately considered when completing and monitoring the various eligibility documents.
Effect – The Organization’s internal control process was not appropriately enforced and monitored, resulting in lack of timely documentation of eligibility determination. However, it is noted that the individual participants and agencies were determined to be eligible for the program.
Questioned Costs – $7,964.
Context/Sampling – A nonstatistical sample of 60 participants within CSFP out of a population of over 250 were selected for eligibility testing. 17 out of the 60 eligibility determinations tested had an error. An additional nonstatistical sample of 30 participating agencies within TEFAP out of a population of 148 were selected for eligibility testing. 5 out of the 30 eligibility determinations tested had an error, with 1 of those resulting in questioned costs, as reported above.
Repeat Finding from Prior Year(s) – Yes.
Recommendation – Management should implement internal controls to ensure all eligibility determination reviews are documented and retained in the file and consideration is appropriately given to fiscal year, calendar year, and application terms.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture
Federal Financial Assistance Listing # 10.565 All Awards
Federal Financial Assistance Listing # 10.568 All Awards
Food Distribution Cluster
Activities Allowed/Unallowed and Allowable Costs/Cost Principles
Significant Deficiency in Internal Control over Compliance
Criteria – A good system of internal controls includes a process to ensure that all costs are appropriately allocated to the programs.
Condition – As part of our audit, it was identified that there were multiple payroll allocation errors that were not identified by management. It was determined that some errors resulted in overallocation of costs while others in underallocation of costs.
Cause – No formal review was completed of the allocations before or after each payroll. This resulted in incorrect amounts being allocated to the programs.
Effect – The failure to adequately review payroll allocations resulted in incorrect charges to the program.
Questioned Costs – None Reported.
Context/Sampling – A nonstatistical sample of 8 pay periods out of a population of 26 pay periods were selected for testing. 6 pay periods had an error.
Repeat Finding from Prior Year(s) – Yes.
Recommendation – It is recommended that the Organization implement processes and controls to ensure that payroll allocations are reviewed and approved with each payroll processed.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture
Federal Financial Assistance Listing # 10.565 All Awards
Federal Financial Assistance Listing # 10.568 All Awards
Federal Financial Assistance Listing # 10.569 All Awards
Food Distribution Cluster
Eligibility
Significant Deficiency in Internal Control over Compliance and Noncompliance
Criteria – A good system of internal controls includes a process to ensure that eligibility determinations for the program are appropriate. This includes a process to ensure proper completion of all tracking forms and documentation, including documented reviews.
Condition – During our review of the eligibility determinations, it was identified that there were various instances where applications or other determinations and reviews were not completed timely or completely. The forms were missing signatures of participants or a documented review process or were completed after the prior forms expiration dates.
Cause – Due to oversight by management, all forms were not completed and documented within participant files. This was largely due to differences in fiscal years, calendar years, and terms of the applications and certifications not being appropriately considered when completing and monitoring the various eligibility documents.
Effect – The Organization’s internal control process was not appropriately enforced and monitored, resulting in lack of timely documentation of eligibility determination. However, it is noted that the individual participants and agencies were determined to be eligible for the program.
Questioned Costs – $7,964.
Context/Sampling – A nonstatistical sample of 60 participants within CSFP out of a population of over 250 were selected for eligibility testing. 17 out of the 60 eligibility determinations tested had an error. An additional nonstatistical sample of 30 participating agencies within TEFAP out of a population of 148 were selected for eligibility testing. 5 out of the 30 eligibility determinations tested had an error, with 1 of those resulting in questioned costs, as reported above.
Repeat Finding from Prior Year(s) – Yes.
Recommendation – Management should implement internal controls to ensure all eligibility determination reviews are documented and retained in the file and consideration is appropriately given to fiscal year, calendar year, and application terms.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture
Federal Financial Assistance Listing # 10.565 All Awards
Federal Financial Assistance Listing # 10.568 All Awards
Food Distribution Cluster
Activities Allowed/Unallowed and Allowable Costs/Cost Principles
Significant Deficiency in Internal Control over Compliance
Criteria – A good system of internal controls includes a process to ensure that all costs are appropriately allocated to the programs.
Condition – As part of our audit, it was identified that there were multiple payroll allocation errors that were not identified by management. It was determined that some errors resulted in overallocation of costs while others in underallocation of costs.
Cause – No formal review was completed of the allocations before or after each payroll. This resulted in incorrect amounts being allocated to the programs.
Effect – The failure to adequately review payroll allocations resulted in incorrect charges to the program.
Questioned Costs – None Reported.
Context/Sampling – A nonstatistical sample of 8 pay periods out of a population of 26 pay periods were selected for testing. 6 pay periods had an error.
Repeat Finding from Prior Year(s) – Yes.
Recommendation – It is recommended that the Organization implement processes and controls to ensure that payroll allocations are reviewed and approved with each payroll processed.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture
Federal Financial Assistance Listing # 10.565 All Awards
Federal Financial Assistance Listing # 10.568 All Awards
Federal Financial Assistance Listing # 10.569 All Awards
Food Distribution Cluster
Eligibility
Significant Deficiency in Internal Control over Compliance and Noncompliance
Criteria – A good system of internal controls includes a process to ensure that eligibility determinations for the program are appropriate. This includes a process to ensure proper completion of all tracking forms and documentation, including documented reviews.
Condition – During our review of the eligibility determinations, it was identified that there were various instances where applications or other determinations and reviews were not completed timely or completely. The forms were missing signatures of participants or a documented review process or were completed after the prior forms expiration dates.
Cause – Due to oversight by management, all forms were not completed and documented within participant files. This was largely due to differences in fiscal years, calendar years, and terms of the applications and certifications not being appropriately considered when completing and monitoring the various eligibility documents.
Effect – The Organization’s internal control process was not appropriately enforced and monitored, resulting in lack of timely documentation of eligibility determination. However, it is noted that the individual participants and agencies were determined to be eligible for the program.
Questioned Costs – $7,964.
Context/Sampling – A nonstatistical sample of 60 participants within CSFP out of a population of over 250 were selected for eligibility testing. 17 out of the 60 eligibility determinations tested had an error. An additional nonstatistical sample of 30 participating agencies within TEFAP out of a population of 148 were selected for eligibility testing. 5 out of the 30 eligibility determinations tested had an error, with 1 of those resulting in questioned costs, as reported above.
Repeat Finding from Prior Year(s) – Yes.
Recommendation – Management should implement internal controls to ensure all eligibility determination reviews are documented and retained in the file and consideration is appropriately given to fiscal year, calendar year, and application terms.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture
Federal Financial Assistance Listing # 10.565 All Awards
Federal Financial Assistance Listing # 10.568 All Awards
Food Distribution Cluster
Activities Allowed/Unallowed and Allowable Costs/Cost Principles
Significant Deficiency in Internal Control over Compliance
Criteria – A good system of internal controls includes a process to ensure that all costs are appropriately allocated to the programs.
Condition – As part of our audit, it was identified that there were multiple payroll allocation errors that were not identified by management. It was determined that some errors resulted in overallocation of costs while others in underallocation of costs.
Cause – No formal review was completed of the allocations before or after each payroll. This resulted in incorrect amounts being allocated to the programs.
Effect – The failure to adequately review payroll allocations resulted in incorrect charges to the program.
Questioned Costs – None Reported.
Context/Sampling – A nonstatistical sample of 8 pay periods out of a population of 26 pay periods were selected for testing. 6 pay periods had an error.
Repeat Finding from Prior Year(s) – Yes.
Recommendation – It is recommended that the Organization implement processes and controls to ensure that payroll allocations are reviewed and approved with each payroll processed.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture
Federal Financial Assistance Listing # 10.565 All Awards
Federal Financial Assistance Listing # 10.568 All Awards
Federal Financial Assistance Listing # 10.569 All Awards
Food Distribution Cluster
Eligibility
Significant Deficiency in Internal Control over Compliance and Noncompliance
Criteria – A good system of internal controls includes a process to ensure that eligibility determinations for the program are appropriate. This includes a process to ensure proper completion of all tracking forms and documentation, including documented reviews.
Condition – During our review of the eligibility determinations, it was identified that there were various instances where applications or other determinations and reviews were not completed timely or completely. The forms were missing signatures of participants or a documented review process or were completed after the prior forms expiration dates.
Cause – Due to oversight by management, all forms were not completed and documented within participant files. This was largely due to differences in fiscal years, calendar years, and terms of the applications and certifications not being appropriately considered when completing and monitoring the various eligibility documents.
Effect – The Organization’s internal control process was not appropriately enforced and monitored, resulting in lack of timely documentation of eligibility determination. However, it is noted that the individual participants and agencies were determined to be eligible for the program.
Questioned Costs – $7,964.
Context/Sampling – A nonstatistical sample of 60 participants within CSFP out of a population of over 250 were selected for eligibility testing. 17 out of the 60 eligibility determinations tested had an error. An additional nonstatistical sample of 30 participating agencies within TEFAP out of a population of 148 were selected for eligibility testing. 5 out of the 30 eligibility determinations tested had an error, with 1 of those resulting in questioned costs, as reported above.
Repeat Finding from Prior Year(s) – Yes.
Recommendation – Management should implement internal controls to ensure all eligibility determination reviews are documented and retained in the file and consideration is appropriately given to fiscal year, calendar year, and application terms.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture
Federal Financial Assistance Listing # 10.565 All Awards
Federal Financial Assistance Listing # 10.568 All Awards
Food Distribution Cluster
Activities Allowed/Unallowed and Allowable Costs/Cost Principles
Significant Deficiency in Internal Control over Compliance
Criteria – A good system of internal controls includes a process to ensure that all costs are appropriately allocated to the programs.
Condition – As part of our audit, it was identified that there were multiple payroll allocation errors that were not identified by management. It was determined that some errors resulted in overallocation of costs while others in underallocation of costs.
Cause – No formal review was completed of the allocations before or after each payroll. This resulted in incorrect amounts being allocated to the programs.
Effect – The failure to adequately review payroll allocations resulted in incorrect charges to the program.
Questioned Costs – None Reported.
Context/Sampling – A nonstatistical sample of 8 pay periods out of a population of 26 pay periods were selected for testing. 6 pay periods had an error.
Repeat Finding from Prior Year(s) – Yes.
Recommendation – It is recommended that the Organization implement processes and controls to ensure that payroll allocations are reviewed and approved with each payroll processed.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture
Federal Financial Assistance Listing # 10.565 All Awards
Federal Financial Assistance Listing # 10.568 All Awards
Federal Financial Assistance Listing # 10.569 All Awards
Food Distribution Cluster
Eligibility
Significant Deficiency in Internal Control over Compliance and Noncompliance
Criteria – A good system of internal controls includes a process to ensure that eligibility determinations for the program are appropriate. This includes a process to ensure proper completion of all tracking forms and documentation, including documented reviews.
Condition – During our review of the eligibility determinations, it was identified that there were various instances where applications or other determinations and reviews were not completed timely or completely. The forms were missing signatures of participants or a documented review process or were completed after the prior forms expiration dates.
Cause – Due to oversight by management, all forms were not completed and documented within participant files. This was largely due to differences in fiscal years, calendar years, and terms of the applications and certifications not being appropriately considered when completing and monitoring the various eligibility documents.
Effect – The Organization’s internal control process was not appropriately enforced and monitored, resulting in lack of timely documentation of eligibility determination. However, it is noted that the individual participants and agencies were determined to be eligible for the program.
Questioned Costs – $7,964.
Context/Sampling – A nonstatistical sample of 60 participants within CSFP out of a population of over 250 were selected for eligibility testing. 17 out of the 60 eligibility determinations tested had an error. An additional nonstatistical sample of 30 participating agencies within TEFAP out of a population of 148 were selected for eligibility testing. 5 out of the 30 eligibility determinations tested had an error, with 1 of those resulting in questioned costs, as reported above.
Repeat Finding from Prior Year(s) – Yes.
Recommendation – Management should implement internal controls to ensure all eligibility determination reviews are documented and retained in the file and consideration is appropriately given to fiscal year, calendar year, and application terms.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture
Federal Financial Assistance Listing # 10.565 All Awards
Federal Financial Assistance Listing # 10.568 All Awards
Food Distribution Cluster
Activities Allowed/Unallowed and Allowable Costs/Cost Principles
Significant Deficiency in Internal Control over Compliance
Criteria – A good system of internal controls includes a process to ensure that all costs are appropriately allocated to the programs.
Condition – As part of our audit, it was identified that there were multiple payroll allocation errors that were not identified by management. It was determined that some errors resulted in overallocation of costs while others in underallocation of costs.
Cause – No formal review was completed of the allocations before or after each payroll. This resulted in incorrect amounts being allocated to the programs.
Effect – The failure to adequately review payroll allocations resulted in incorrect charges to the program.
Questioned Costs – None Reported.
Context/Sampling – A nonstatistical sample of 8 pay periods out of a population of 26 pay periods were selected for testing. 6 pay periods had an error.
Repeat Finding from Prior Year(s) – Yes.
Recommendation – It is recommended that the Organization implement processes and controls to ensure that payroll allocations are reviewed and approved with each payroll processed.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture
Federal Financial Assistance Listing # 10.569 All Awards
Food Distribution Cluster
Special Tests and Provisions
Material Weakness in Internal Control over Compliance
Criteria – A good system of internal accounting control should provide for the consistent processes and controls between locations for the receipt, distribution, and counting of inventory at year-end and throughout the fiscal year.
Condition – The Organization does not have consistent and effective controls in place over inventory to properly track, record, and count warehouse inventory at the two main locations.
Cause – This deficiency is due to changes in staff and facility changes, resulting in inconsistent processes and controls between warehouse locations.
Effect – Inadequate controls over the inventory processes have the potential to result in incorrect recording of inventory ending balances.
Questioned Costs – None Reported.
Context/Sampling – Statistical sampling was not utilized for year-end inventory observation procedures. As part of inventory observation procedures at the Fargo warehouse, 12 list to floor USDA selections were counted and 3 additional USDA floor to list selections were counted. As part of inventory observation procedures at the Bismarck warehouse, 14 list to floor USDA selections were counted and 3 additional USDA floor to list selections were counted.
Repeat Finding from Prior Year(s) – No.
Recommendation – It is the responsibility of management to review process and their implementation to ensure consistency and effectiveness throughout the Organization. It is the recommendation that these processes be reviewed and revised regularly, as necessary to ensure the processes are consistent and evolving with the changes of the Organization.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture
Federal Financial Assistance Listing # 10.565 All Awards
Federal Financial Assistance Listing # 10.568 All Awards
Federal Financial Assistance Listing # 10.569 All Awards
Food Distribution Cluster
Eligibility
Significant Deficiency in Internal Control over Compliance and Noncompliance
Criteria – A good system of internal controls includes a process to ensure that eligibility determinations for the program are appropriate. This includes a process to ensure proper completion of all tracking forms and documentation, including documented reviews.
Condition – During our review of the eligibility determinations, it was identified that there were various instances where applications or other determinations and reviews were not completed timely or completely. The forms were missing signatures of participants or a documented review process or were completed after the prior forms expiration dates.
Cause – Due to oversight by management, all forms were not completed and documented within participant files. This was largely due to differences in fiscal years, calendar years, and terms of the applications and certifications not being appropriately considered when completing and monitoring the various eligibility documents.
Effect – The Organization’s internal control process was not appropriately enforced and monitored, resulting in lack of timely documentation of eligibility determination. However, it is noted that the individual participants and agencies were determined to be eligible for the program.
Questioned Costs – $7,964.
Context/Sampling – A nonstatistical sample of 60 participants within CSFP out of a population of over 250 were selected for eligibility testing. 17 out of the 60 eligibility determinations tested had an error. An additional nonstatistical sample of 30 participating agencies within TEFAP out of a population of 148 were selected for eligibility testing. 5 out of the 30 eligibility determinations tested had an error, with 1 of those resulting in questioned costs, as reported above.
Repeat Finding from Prior Year(s) – Yes.
Recommendation – Management should implement internal controls to ensure all eligibility determination reviews are documented and retained in the file and consideration is appropriately given to fiscal year, calendar year, and application terms.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture
Federal Financial Assistance Listing # 10.569 All Awards
Food Distribution Cluster
Special Tests and Provisions
Material Weakness in Internal Control over Compliance
Criteria – A good system of internal accounting control should provide for the consistent processes and controls between locations for the receipt, distribution, and counting of inventory at year-end and throughout the fiscal year.
Condition – The Organization does not have consistent and effective controls in place over inventory to properly track, record, and count warehouse inventory at the two main locations.
Cause – This deficiency is due to changes in staff and facility changes, resulting in inconsistent processes and controls between warehouse locations.
Effect – Inadequate controls over the inventory processes have the potential to result in incorrect recording of inventory ending balances.
Questioned Costs – None Reported.
Context/Sampling – Statistical sampling was not utilized for year-end inventory observation procedures. As part of inventory observation procedures at the Fargo warehouse, 12 list to floor USDA selections were counted and 3 additional USDA floor to list selections were counted. As part of inventory observation procedures at the Bismarck warehouse, 14 list to floor USDA selections were counted and 3 additional USDA floor to list selections were counted.
Repeat Finding from Prior Year(s) – No.
Recommendation – It is the responsibility of management to review process and their implementation to ensure consistency and effectiveness throughout the Organization. It is the recommendation that these processes be reviewed and revised regularly, as necessary to ensure the processes are consistent and evolving with the changes of the Organization.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture
Federal Financial Assistance Listing # 10.565 All Awards
Federal Financial Assistance Listing # 10.568 All Awards
Federal Financial Assistance Listing # 10.569 All Awards
Food Distribution Cluster
Eligibility
Significant Deficiency in Internal Control over Compliance and Noncompliance
Criteria – A good system of internal controls includes a process to ensure that eligibility determinations for the program are appropriate. This includes a process to ensure proper completion of all tracking forms and documentation, including documented reviews.
Condition – During our review of the eligibility determinations, it was identified that there were various instances where applications or other determinations and reviews were not completed timely or completely. The forms were missing signatures of participants or a documented review process or were completed after the prior forms expiration dates.
Cause – Due to oversight by management, all forms were not completed and documented within participant files. This was largely due to differences in fiscal years, calendar years, and terms of the applications and certifications not being appropriately considered when completing and monitoring the various eligibility documents.
Effect – The Organization’s internal control process was not appropriately enforced and monitored, resulting in lack of timely documentation of eligibility determination. However, it is noted that the individual participants and agencies were determined to be eligible for the program.
Questioned Costs – $7,964.
Context/Sampling – A nonstatistical sample of 60 participants within CSFP out of a population of over 250 were selected for eligibility testing. 17 out of the 60 eligibility determinations tested had an error. An additional nonstatistical sample of 30 participating agencies within TEFAP out of a population of 148 were selected for eligibility testing. 5 out of the 30 eligibility determinations tested had an error, with 1 of those resulting in questioned costs, as reported above.
Repeat Finding from Prior Year(s) – Yes.
Recommendation – Management should implement internal controls to ensure all eligibility determination reviews are documented and retained in the file and consideration is appropriately given to fiscal year, calendar year, and application terms.
Views of Responsible Officials – Management agrees with the finding.