Audit 307269

US Department of Agriculture Food Distribution Cluster Program Name(s): Emergency Food Assistance Program (Food Commodities); Commodity Supplemental Food Program Assistance Listing #(s): 10.569; 10.565 Finding: 2021 – 001 MATERIAL NONCOMPLIANCE / SIGNIFICANT DEFICIENCY Special tests and provisions Condition: The Organization did not maintain an appropriate inventory accounting or control process over USDA foods. Cause: The Organization did not track inventory donated or distributed in a manner that allowed the USDA foods donated or distributed to be reported and reconciled appropriately for the federal awards audit. Effect: The Organization could not provide an accurate accounting of year-end USDA Food specific inventory or a fully accurate accounting of USDA Food distributed. USDA Food distributed had to be calculated using the manually counted year-end inventory of USDA Foods. This count had to be manually converted to the appropriate USDA cost per item due to the Organization valuing inventory using the flat dollar per pound rate provide by the donor food bank. Questioned Costs: $15,132. This amount was determined by totaling the variances between the distributed value and the year-end inventory value and the variance between the Organization’s value using the flat dollar per pound rate and the appropriate USDA Food cost per item rate. Criteria: 7 CFR section 250.19 requires accurate and complete records be maintained with respect to the receipt, distribution or use, and inventory of USDA Foods. An appropriate accounting must be maintained, an annual physical inventory must be taken, and the physical inventory must be reconciled with the inventory records. Recommendation: The Organization should ensure that appropriate inventory systems and appropriate related controls are in place to track donations and distributions of USDA Foods separately from nonfederal foods. The system should track USDA Foods according to the appropriate rates and should be reviewed regularly to ensure the rates stay accurate. Views of responsible personnel and planned corrective actions: The Organization agrees with this finding while maintaining that the entirety of the questioned costs were for food distributed to eligible individuals. The Organization has appropriate inventory systems and controls in place by the issuance of the audit report. Please refer to the corrective action plan on page 27.

US Department of Treasury Program Name: Coronavirus Relief Fund Assistance Listing #: 21.019 Finding: 2021 – 002 MATERIAL NONCOMPLIANCE / MATERIAL WEAKNESS Reporting Condition: The Organization failed to recognize the requirement for a federal award single audit and did not meet the related required reporting compliance requirements in a timely manner. Cause: Organization personnel are not familiar with federal reporting compliance requirements. Effect: No single audit was completed when the financial statement audit was originally completed. This prevented the appropriate filing with the Office of Management and Budget. Criteria: 2 CFR Part 200, Subpart F requires entities receiving $750,000 or more in federal aid to participate in an audit. These results must then be submitted through the Federal Audit Clearinghouse for review by the Federal Office of Management and Budget. Recommendation: The Organization should implement reporting procedures specific to each federal award and based on those awards’ specific reporting compliance requirements. The Organization should track and review federal aid received to ensure that if the single audit threshold is exceeded, a third party accounting firm is engaged for a federal awards single audit. Views of responsible personnel and planned corrective actions: The Organization agrees with this finding. By the issuance of the audit report, the Organization has reviewed existing reporting procedures and engaged a third-party accountant that assists Organizational personnel with the accounting for total federal aid received. Please refer to the corrective action plan on page 27.

US Department of Agriculture Food Distribution Cluster Program Name(s): Emergency Food Assistance Program (Food Commodities); Commodity Supplemental Food Program Assistance Listing #(s): 10.569; 10.565 Finding: 2021 – 001 MATERIAL NONCOMPLIANCE / SIGNIFICANT DEFICIENCY Special tests and provisions Condition: The Organization did not maintain an appropriate inventory accounting or control process over USDA foods. Cause: The Organization did not track inventory donated or distributed in a manner that allowed the USDA foods donated or distributed to be reported and reconciled appropriately for the federal awards audit. Effect: The Organization could not provide an accurate accounting of year-end USDA Food specific inventory or a fully accurate accounting of USDA Food distributed. USDA Food distributed had to be calculated using the manually counted year-end inventory of USDA Foods. This count had to be manually converted to the appropriate USDA cost per item due to the Organization valuing inventory using the flat dollar per pound rate provide by the donor food bank. Questioned Costs: $15,132. This amount was determined by totaling the variances between the distributed value and the year-end inventory value and the variance between the Organization’s value using the flat dollar per pound rate and the appropriate USDA Food cost per item rate. Criteria: 7 CFR section 250.19 requires accurate and complete records be maintained with respect to the receipt, distribution or use, and inventory of USDA Foods. An appropriate accounting must be maintained, an annual physical inventory must be taken, and the physical inventory must be reconciled with the inventory records. Recommendation: The Organization should ensure that appropriate inventory systems and appropriate related controls are in place to track donations and distributions of USDA Foods separately from nonfederal foods. The system should track USDA Foods according to the appropriate rates and should be reviewed regularly to ensure the rates stay accurate. Views of responsible personnel and planned corrective actions: The Organization agrees with this finding while maintaining that the entirety of the questioned costs were for food distributed to eligible individuals. The Organization has appropriate inventory systems and controls in place by the issuance of the audit report. Please refer to the corrective action plan on page 27.

US Department of Treasury Program Name: Coronavirus Relief Fund Assistance Listing #: 21.019 Finding: 2021 – 002 MATERIAL NONCOMPLIANCE / MATERIAL WEAKNESS Reporting Condition: The Organization failed to recognize the requirement for a federal award single audit and did not meet the related required reporting compliance requirements in a timely manner. Cause: Organization personnel are not familiar with federal reporting compliance requirements. Effect: No single audit was completed when the financial statement audit was originally completed. This prevented the appropriate filing with the Office of Management and Budget. Criteria: 2 CFR Part 200, Subpart F requires entities receiving $750,000 or more in federal aid to participate in an audit. These results must then be submitted through the Federal Audit Clearinghouse for review by the Federal Office of Management and Budget. Recommendation: The Organization should implement reporting procedures specific to each federal award and based on those awards’ specific reporting compliance requirements. The Organization should track and review federal aid received to ensure that if the single audit threshold is exceeded, a third party accounting firm is engaged for a federal awards single audit. Views of responsible personnel and planned corrective actions: The Organization agrees with this finding. By the issuance of the audit report, the Organization has reviewed existing reporting procedures and engaged a third-party accountant that assists Organizational personnel with the accounting for total federal aid received. Please refer to the corrective action plan on page 27.