Audit 346837

Finding 2024-002: Special Tests and Provisions—Accountability for USDA Foods—Material Weakness in Controls over Compliance and Noncompliance Federal Program: Emergency Food Assistance Program (Food Commodities)—ALN 10.569 Year(s): 2024 Federal Agency: U.S. Department of Agriculture (USDA), Food, and Nutrition Services Contract—D-125, The Salvation Army, Reno Pass-Through Entity: Nevada Department of Agriculture Criteria—Agencies must conduct an annual physical inventory of all storage facilities used by the distributing agency or by a sub distributing agency. Such inventory must be reconciled annually with the storage facility’s inventory records and maintained on file by the agency that contracted with or maintained the storage facility. The Del Oro Reno Division (the Division) is required to submit monthly inventory reports of all The Emergency Food Assistance Program (TEFAP) USDA donated foods on hand at their own or contracted facility to the Contracted Regional Agency monthly. The report shall indicate for each TEFAP UDSA donated food item: the commodity description, inventory on hand, inventory received for the month, total available for the month, total distributed, total delivered to another agency, inventory adjustments and ending inventory for the month. Condition—We selected 4 of the 12 monthly reports to test the Division’s inventory process. The inventory was counted monthly and submitted to the grantor as required. However, there was no evidence of the review over the count process and the finalized inventory sheets that were submitted to the grantor. Further in the sampled reports, the following findings were noted. Month Selected Finding January 2024- Total cases received per delivery report was 1,192 whereas the total cases recorded in the report was 1,160. The discrepancy of 32 cases was a result of human error. April 2024/ August 2024 -The total cases distributed is calculated as Beginning Cases plus Cases received minus the cases in ending inventory at the end of the month. There was a mathematical error in the above process which led to a discrepancy of 10 cases in the April 2024 report and discrepancy of 26 cases inthe August 2024 report. September 2024 -This report contained inventory items that were donated by other sources and not a part of the Emergency Food Assistance Program. Cause—The lack of review over the inventory process. The inventory count sheets should be reviewed for accuracy and completed by personnel not performing the count. Effect—As a result of a lack of proper review, the Division had discrepancies in the inventory management and tracking process. Recommendation—We recommend the Division implement a review process to ensure the accuracy of the inventory management and reporting process. Views of the Responsible Officials—See Corrective Action Plan

Finding 2024-002: Special Tests and Provisions—Accountability for USDA Foods—Material Weakness in Controls over Compliance and Noncompliance Federal Program: Emergency Food Assistance Program (Food Commodities)—ALN 10.569 Year(s): 2024 Federal Agency: U.S. Department of Agriculture (USDA), Food, and Nutrition Services Contract—D-125, The Salvation Army, Reno Pass-Through Entity: Nevada Department of Agriculture Criteria—Agencies must conduct an annual physical inventory of all storage facilities used by the distributing agency or by a sub distributing agency. Such inventory must be reconciled annually with the storage facility’s inventory records and maintained on file by the agency that contracted with or maintained the storage facility. The Del Oro Reno Division (the Division) is required to submit monthly inventory reports of all The Emergency Food Assistance Program (TEFAP) USDA donated foods on hand at their own or contracted facility to the Contracted Regional Agency monthly. The report shall indicate for each TEFAP UDSA donated food item: the commodity description, inventory on hand, inventory received for the month, total available for the month, total distributed, total delivered to another agency, inventory adjustments and ending inventory for the month. Condition—We selected 4 of the 12 monthly reports to test the Division’s inventory process. The inventory was counted monthly and submitted to the grantor as required. However, there was no evidence of the review over the count process and the finalized inventory sheets that were submitted to the grantor. Further in the sampled reports, the following findings were noted. Month Selected Finding January 2024- Total cases received per delivery report was 1,192 whereas the total cases recorded in the report was 1,160. The discrepancy of 32 cases was a result of human error. April 2024/ August 2024 -The total cases distributed is calculated as Beginning Cases plus Cases received minus the cases in ending inventory at the end of the month. There was a mathematical error in the above process which led to a discrepancy of 10 cases in the April 2024 report and discrepancy of 26 cases inthe August 2024 report. September 2024 -This report contained inventory items that were donated by other sources and not a part of the Emergency Food Assistance Program. Cause—The lack of review over the inventory process. The inventory count sheets should be reviewed for accuracy and completed by personnel not performing the count. Effect—As a result of a lack of proper review, the Division had discrepancies in the inventory management and tracking process. Recommendation—We recommend the Division implement a review process to ensure the accuracy of the inventory management and reporting process. Views of the Responsible Officials—See Corrective Action Plan

Finding 2024-003: Allowable Costs/Cost Principles—Payroll Calculation Errors—Significant Deficiency in Controls over Compliance and Noncompliance Federal Program: Coronavirus State and Local Fiscal Recovery Funds—ALN 21.027 Year(s): 2024 Federal Agency: U.S. Department of Treasury Contract—DHA SA-01-22/A2 Pass-Through Entity: Sacramento County Criteria—In accordance with 2 CFR 200.430 (g)(1) and (g)(1)(i) charges to Federal awards for salaries and wages must be based on accurate records and calculations. Condition/Context—Out of 31 payroll selections, 6 selections had calculation errors. In the process of recording the payroll cost for the grant, spreadsheet related errors were made in transferring the general ledger data into the reimbursement requests which were then used to populate the schedule of federal awards of expenditures. Questions Costs—Under the reportable threshold, hence not applicable Cause—The control to review the recording of the payroll general ledger details into the reimbursement request was not precise enough to identify the calculation errors. Effect—Incorrect cost can be charged to the grant which can lead to the potential disallowance of costs. Recommendation—We recommend the Division implement a more detailed and precise review process to ensure the accuracy and completeness of the reimbursement request. Views of the Responsible Officials—See Corrective Action Plan

Finding 2024-002: Special Tests and Provisions—Accountability for USDA Foods—Material Weakness in Controls over Compliance and Noncompliance Federal Program: Emergency Food Assistance Program (Food Commodities)—ALN 10.569 Year(s): 2024 Federal Agency: U.S. Department of Agriculture (USDA), Food, and Nutrition Services Contract—D-125, The Salvation Army, Reno Pass-Through Entity: Nevada Department of Agriculture Criteria—Agencies must conduct an annual physical inventory of all storage facilities used by the distributing agency or by a sub distributing agency. Such inventory must be reconciled annually with the storage facility’s inventory records and maintained on file by the agency that contracted with or maintained the storage facility. The Del Oro Reno Division (the Division) is required to submit monthly inventory reports of all The Emergency Food Assistance Program (TEFAP) USDA donated foods on hand at their own or contracted facility to the Contracted Regional Agency monthly. The report shall indicate for each TEFAP UDSA donated food item: the commodity description, inventory on hand, inventory received for the month, total available for the month, total distributed, total delivered to another agency, inventory adjustments and ending inventory for the month. Condition—We selected 4 of the 12 monthly reports to test the Division’s inventory process. The inventory was counted monthly and submitted to the grantor as required. However, there was no evidence of the review over the count process and the finalized inventory sheets that were submitted to the grantor. Further in the sampled reports, the following findings were noted. Month Selected Finding January 2024- Total cases received per delivery report was 1,192 whereas the total cases recorded in the report was 1,160. The discrepancy of 32 cases was a result of human error. April 2024/ August 2024 -The total cases distributed is calculated as Beginning Cases plus Cases received minus the cases in ending inventory at the end of the month. There was a mathematical error in the above process which led to a discrepancy of 10 cases in the April 2024 report and discrepancy of 26 cases inthe August 2024 report. September 2024 -This report contained inventory items that were donated by other sources and not a part of the Emergency Food Assistance Program. Cause—The lack of review over the inventory process. The inventory count sheets should be reviewed for accuracy and completed by personnel not performing the count. Effect—As a result of a lack of proper review, the Division had discrepancies in the inventory management and tracking process. Recommendation—We recommend the Division implement a review process to ensure the accuracy of the inventory management and reporting process. Views of the Responsible Officials—See Corrective Action Plan

Finding 2024-002: Special Tests and Provisions—Accountability for USDA Foods—Material Weakness in Controls over Compliance and Noncompliance Federal Program: Emergency Food Assistance Program (Food Commodities)—ALN 10.569 Year(s): 2024 Federal Agency: U.S. Department of Agriculture (USDA), Food, and Nutrition Services Contract—D-125, The Salvation Army, Reno Pass-Through Entity: Nevada Department of Agriculture Criteria—Agencies must conduct an annual physical inventory of all storage facilities used by the distributing agency or by a sub distributing agency. Such inventory must be reconciled annually with the storage facility’s inventory records and maintained on file by the agency that contracted with or maintained the storage facility. The Del Oro Reno Division (the Division) is required to submit monthly inventory reports of all The Emergency Food Assistance Program (TEFAP) USDA donated foods on hand at their own or contracted facility to the Contracted Regional Agency monthly. The report shall indicate for each TEFAP UDSA donated food item: the commodity description, inventory on hand, inventory received for the month, total available for the month, total distributed, total delivered to another agency, inventory adjustments and ending inventory for the month. Condition—We selected 4 of the 12 monthly reports to test the Division’s inventory process. The inventory was counted monthly and submitted to the grantor as required. However, there was no evidence of the review over the count process and the finalized inventory sheets that were submitted to the grantor. Further in the sampled reports, the following findings were noted. Month Selected Finding January 2024- Total cases received per delivery report was 1,192 whereas the total cases recorded in the report was 1,160. The discrepancy of 32 cases was a result of human error. April 2024/ August 2024 -The total cases distributed is calculated as Beginning Cases plus Cases received minus the cases in ending inventory at the end of the month. There was a mathematical error in the above process which led to a discrepancy of 10 cases in the April 2024 report and discrepancy of 26 cases inthe August 2024 report. September 2024 -This report contained inventory items that were donated by other sources and not a part of the Emergency Food Assistance Program. Cause—The lack of review over the inventory process. The inventory count sheets should be reviewed for accuracy and completed by personnel not performing the count. Effect—As a result of a lack of proper review, the Division had discrepancies in the inventory management and tracking process. Recommendation—We recommend the Division implement a review process to ensure the accuracy of the inventory management and reporting process. Views of the Responsible Officials—See Corrective Action Plan

Finding 2024-003: Allowable Costs/Cost Principles—Payroll Calculation Errors—Significant Deficiency in Controls over Compliance and Noncompliance Federal Program: Coronavirus State and Local Fiscal Recovery Funds—ALN 21.027 Year(s): 2024 Federal Agency: U.S. Department of Treasury Contract—DHA SA-01-22/A2 Pass-Through Entity: Sacramento County Criteria—In accordance with 2 CFR 200.430 (g)(1) and (g)(1)(i) charges to Federal awards for salaries and wages must be based on accurate records and calculations. Condition/Context—Out of 31 payroll selections, 6 selections had calculation errors. In the process of recording the payroll cost for the grant, spreadsheet related errors were made in transferring the general ledger data into the reimbursement requests which were then used to populate the schedule of federal awards of expenditures. Questions Costs—Under the reportable threshold, hence not applicable Cause—The control to review the recording of the payroll general ledger details into the reimbursement request was not precise enough to identify the calculation errors. Effect—Incorrect cost can be charged to the grant which can lead to the potential disallowance of costs. Recommendation—We recommend the Division implement a more detailed and precise review process to ensure the accuracy and completeness of the reimbursement request. Views of the Responsible Officials—See Corrective Action Plan