Audit 300756

Criteria: Accurate and complete records must be maintained with respect to the receipt, distribution/use, and inventory of United States Department of Agriculture (USDA) Foods, including end products processed from USDA Foods in the Emergency Food Assistance Program (TEFAP). Failure to maintain records required by 7 CFR section 250.19 is considered prima facie evidence of improper distribution or loss of USDA Foods. Condition: The Organization relies on records received from the pass-through entity for reporting inventory; thus, the Organization's records were such that it could not be determined if they were complete or accurate. Cause: The pass-through entity’s receipts for USDA food products are inconsistently accurate and measure delivered goods on a unitary basis that does not account for cases of multiple items or provide overall weight. The Organization weighs and records all food stuffs that are provided to eligible recipients but is unable to identify which products were provided by TEFAP and those that were directly donated to the Organization. As such, the records used by the Organization could not produce an ending inventory balance for USDA foods. Additionally, there was not an annual inventory process in place. Effect: Incomplete record keeping could lead to improper distribution of USDA foods to ineligible participants. Questioned Costs: Cannot be determined. Context: Not applicable. Recommendation: The Organization should implement appropriate internal controls relating to the accounting for USDA foods, conduct an annual physical inventory and reconcile the physical inventory with inventory records. Management’s Response: Management agrees with the finding and is researching inventory management processes that meets the cost and logistical restrictions of the Organization. The Organization verifies all participants of the food pantry program meet the eligibility requirements as required under TEFAP.

Criteria: Accurate and complete records must be maintained with respect to the receipt, distribution/use, and inventory of United States Department of Agriculture (USDA) Foods, including end products processed from USDA Foods in the Emergency Food Assistance Program (TEFAP). Failure to maintain records required by 7 CFR section 250.19 is considered prima facie evidence of improper distribution or loss of USDA Foods. Condition: The Organization relies on records received from the pass-through entity for reporting inventory; thus, the Organization's records were such that it could not be determined if they were complete or accurate. Cause: The pass-through entity’s receipts for USDA food products are inconsistently accurate and measure delivered goods on a unitary basis that does not account for cases of multiple items or provide overall weight. The Organization weighs and records all food stuffs that are provided to eligible recipients but is unable to identify which products were provided by TEFAP and those that were directly donated to the Organization. As such, the records used by the Organization could not produce an ending inventory balance for USDA foods. Additionally, there was not an annual inventory process in place. Effect: Incomplete record keeping could lead to improper distribution of USDA foods to ineligible participants. Questioned Costs: Cannot be determined. Context: Not applicable. Recommendation: The Organization should implement appropriate internal controls relating to the accounting for USDA foods, conduct an annual physical inventory and reconcile the physical inventory with inventory records. Management’s Response: Management agrees with the finding and is researching inventory management processes that meets the cost and logistical restrictions of the Organization. The Organization verifies all participants of the food pantry program meet the eligibility requirements as required under TEFAP.