FAC Explorer

Audit 354463

FY End
2024-12-31
Total Expended
$2.24M
Findings
12
Programs
8
Organization: Harvest Regional Food Bank, Inc. (AR)
Year: 2024 Accepted: 2025-04-24
Auditor: Thomas & Thomas CPAS PLLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
555782 2024-002 Significant Deficiency Yes N
555783 2024-002 Significant Deficiency Yes N
555784 2024-002 Significant Deficiency Yes N
555785 2024-002 Significant Deficiency Yes N
555786 2024-002 Significant Deficiency Yes N
555787 2024-002 Significant Deficiency Yes N
1132224 2024-002 Significant Deficiency Yes N
1132225 2024-002 Significant Deficiency Yes N
1132226 2024-002 Significant Deficiency Yes N
1132227 2024-002 Significant Deficiency Yes N
1132228 2024-002 Significant Deficiency Yes N
1132229 2024-002 Significant Deficiency Yes N

Programs

ALN Program Spent Major Findings
10.568 Emergency Food Assistance Program (administrative Costs) $298,000 Yes 1
10.565 Commodity Supplemental Food Program $149,473 Yes 1
10.182 Local Food Purchase Assistance $73,332 - 0
10.U18 Tefap Commodity Credit Corp. Eligible Recipient Funds (administrative Costs) $32,160 - 0
10.559 Summer Food Service Program for Children $31,490 - 0
10.558 Child and Adult Care Food Program $28,381 - 0
10.569 Emergency Food Assistance Program (food Commodities) $5,109 Yes 1
97.024 Emergency Food and Shelter National Board Program $1,736 - 0

Contacts

Name Title Type
DTU7KDNHVWA5 Camille Wrinkle Auditee
8707741398 Tim Holt Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Organization has elected not to use the 10% de minimus indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Harvest Regional Food Bank, Inc. (the Organization) under programs of the federal government for the year ended December 31, 2024. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Organization.
Title: Summary of Significant Accounting Policies Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Organization has elected not to use the 10% de minimus indirect cost rate allowed under the Uniform Guidance. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
Title: Non-Monetary Assistance Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Organization has elected not to use the 10% de minimus indirect cost rate allowed under the Uniform Guidance. Non-monetary assistance is reported in the Schedule at the fair value of the commodities received and disbursed. At December 31, 2023, the Organization had federally funded food commodities in inventory totaling $453,211.
Title: Matching Contributions Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Organization has elected not to use the 10% de minimus indirect cost rate allowed under the Uniform Guidance. The Organization incurred a total of approximately $164,310 of costs associated with the warehousing of food commodities, of which $164,310 has been reimbursed by the U.S. Department of Agriculture and included in the accompanying schedule.
Title: Indirect Cost Rate Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Organization has elected not to use the 10% de minimus indirect cost rate allowed under the Uniform Guidance. The Organization has elected not to use the 10% de minimus indirect cost rate allowed under the Uniform Guidance.

Finding Details

Finding 2024-002
Finding 2024-002 Department of Agriculture Food Distribution Cluster – Assistance Listing# 10.565, 10.568, 10.569 Award Year - January 1, 2024 to December 31, 2024 Award Number – 6000001537 Special Tests and Provisions – Federal Food Receipts Testing Type of Finding – Significant Deficiency Internal Controls and Noncompliance relating to Inventory Reporting Criteria: Internal Controls should be designed and implemented to ensure federal food receipts are properly reflected in the QuickBooks SMF activity. Additionally, controls should be implemented to ensure all federal food receipts and only federal food receipts are recorded as received under the USDA/CSFP accounts in the QuickBooks SMF activity. Condition: Federal food receipts recorded by the Organization differed from federal food donations reported by the Arkansas Department of Education (ADE) (formerly Arkansas Department of Human Services) for the year ended December 31, 2024. This included instances where food items were recorded at different amounts as well as instances where items were recorded as received by the Organization without a corresponding donation receipted by ADE. Context: The Organization exercises limited control and review procedures over inventory received, distributed and adjusted within the SMF QuickBooks on a monthly basis. Additionally, no reconciliation is performed on inventory at month-end and inventory reported to ADE. Effect or Potential Effect: Federal food inventory could be misstated as a result of the limited control and review procedures. Recommendation: All paperwork for federal food commodities received should be filed in separate folders according to the provider (USDA or CSFP). On each receiving document, a conversion should be notated to convert from cases to pounds based on the Organization’s weight of one case as listed in the account name detail. Receipts should be entered in the SMF system and submitted to ADE within 48 hours of delivery. Additional attention should be made to the proper coding of food items (USDA versus CSFP). We recommend all receipt of products from all sources and all distribution of product be verified by a secondary person, with any discrepancies being researched and corrected. We recommend the Organization count all federal food inventory at least quarterly to verify the federal food inventory amounts in the SMF QuickBooks file are correct. Additionally, after all receipts, disbursements and adjustments are made each month, the accounting system for inventory should be locked down with a password to prevent unintended changes. We also recommend the reporting to ADE be reconciled to the federal food receipts and inventory on hand at month-end. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan on page 31.
Finding 2024-002
Finding 2024-002 Department of Agriculture Food Distribution Cluster – Assistance Listing# 10.565, 10.568, 10.569 Award Year - January 1, 2024 to December 31, 2024 Award Number – 6000001537 Special Tests and Provisions – Federal Food Receipts Testing Type of Finding – Significant Deficiency Internal Controls and Noncompliance relating to Inventory Reporting Criteria: Internal Controls should be designed and implemented to ensure federal food receipts are properly reflected in the QuickBooks SMF activity. Additionally, controls should be implemented to ensure all federal food receipts and only federal food receipts are recorded as received under the USDA/CSFP accounts in the QuickBooks SMF activity. Condition: Federal food receipts recorded by the Organization differed from federal food donations reported by the Arkansas Department of Education (ADE) (formerly Arkansas Department of Human Services) for the year ended December 31, 2024. This included instances where food items were recorded at different amounts as well as instances where items were recorded as received by the Organization without a corresponding donation receipted by ADE. Context: The Organization exercises limited control and review procedures over inventory received, distributed and adjusted within the SMF QuickBooks on a monthly basis. Additionally, no reconciliation is performed on inventory at month-end and inventory reported to ADE. Effect or Potential Effect: Federal food inventory could be misstated as a result of the limited control and review procedures. Recommendation: All paperwork for federal food commodities received should be filed in separate folders according to the provider (USDA or CSFP). On each receiving document, a conversion should be notated to convert from cases to pounds based on the Organization’s weight of one case as listed in the account name detail. Receipts should be entered in the SMF system and submitted to ADE within 48 hours of delivery. Additional attention should be made to the proper coding of food items (USDA versus CSFP). We recommend all receipt of products from all sources and all distribution of product be verified by a secondary person, with any discrepancies being researched and corrected. We recommend the Organization count all federal food inventory at least quarterly to verify the federal food inventory amounts in the SMF QuickBooks file are correct. Additionally, after all receipts, disbursements and adjustments are made each month, the accounting system for inventory should be locked down with a password to prevent unintended changes. We also recommend the reporting to ADE be reconciled to the federal food receipts and inventory on hand at month-end. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan on page 31.
Finding 2024-002
Finding 2024-002 Department of Agriculture Food Distribution Cluster – Assistance Listing# 10.565, 10.568, 10.569 Award Year - January 1, 2024 to December 31, 2024 Award Number – 6000001537 Special Tests and Provisions – Federal Food Receipts Testing Type of Finding – Significant Deficiency Internal Controls and Noncompliance relating to Inventory Reporting Criteria: Internal Controls should be designed and implemented to ensure federal food receipts are properly reflected in the QuickBooks SMF activity. Additionally, controls should be implemented to ensure all federal food receipts and only federal food receipts are recorded as received under the USDA/CSFP accounts in the QuickBooks SMF activity. Condition: Federal food receipts recorded by the Organization differed from federal food donations reported by the Arkansas Department of Education (ADE) (formerly Arkansas Department of Human Services) for the year ended December 31, 2024. This included instances where food items were recorded at different amounts as well as instances where items were recorded as received by the Organization without a corresponding donation receipted by ADE. Context: The Organization exercises limited control and review procedures over inventory received, distributed and adjusted within the SMF QuickBooks on a monthly basis. Additionally, no reconciliation is performed on inventory at month-end and inventory reported to ADE. Effect or Potential Effect: Federal food inventory could be misstated as a result of the limited control and review procedures. Recommendation: All paperwork for federal food commodities received should be filed in separate folders according to the provider (USDA or CSFP). On each receiving document, a conversion should be notated to convert from cases to pounds based on the Organization’s weight of one case as listed in the account name detail. Receipts should be entered in the SMF system and submitted to ADE within 48 hours of delivery. Additional attention should be made to the proper coding of food items (USDA versus CSFP). We recommend all receipt of products from all sources and all distribution of product be verified by a secondary person, with any discrepancies being researched and corrected. We recommend the Organization count all federal food inventory at least quarterly to verify the federal food inventory amounts in the SMF QuickBooks file are correct. Additionally, after all receipts, disbursements and adjustments are made each month, the accounting system for inventory should be locked down with a password to prevent unintended changes. We also recommend the reporting to ADE be reconciled to the federal food receipts and inventory on hand at month-end. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan on page 31.
Finding 2024-002
Finding 2024-002 Department of Agriculture Food Distribution Cluster – Assistance Listing# 10.565, 10.568, 10.569 Award Year - January 1, 2024 to December 31, 2024 Award Number – 6000001537 Special Tests and Provisions – Federal Food Receipts Testing Type of Finding – Significant Deficiency Internal Controls and Noncompliance relating to Inventory Reporting Criteria: Internal Controls should be designed and implemented to ensure federal food receipts are properly reflected in the QuickBooks SMF activity. Additionally, controls should be implemented to ensure all federal food receipts and only federal food receipts are recorded as received under the USDA/CSFP accounts in the QuickBooks SMF activity. Condition: Federal food receipts recorded by the Organization differed from federal food donations reported by the Arkansas Department of Education (ADE) (formerly Arkansas Department of Human Services) for the year ended December 31, 2024. This included instances where food items were recorded at different amounts as well as instances where items were recorded as received by the Organization without a corresponding donation receipted by ADE. Context: The Organization exercises limited control and review procedures over inventory received, distributed and adjusted within the SMF QuickBooks on a monthly basis. Additionally, no reconciliation is performed on inventory at month-end and inventory reported to ADE. Effect or Potential Effect: Federal food inventory could be misstated as a result of the limited control and review procedures. Recommendation: All paperwork for federal food commodities received should be filed in separate folders according to the provider (USDA or CSFP). On each receiving document, a conversion should be notated to convert from cases to pounds based on the Organization’s weight of one case as listed in the account name detail. Receipts should be entered in the SMF system and submitted to ADE within 48 hours of delivery. Additional attention should be made to the proper coding of food items (USDA versus CSFP). We recommend all receipt of products from all sources and all distribution of product be verified by a secondary person, with any discrepancies being researched and corrected. We recommend the Organization count all federal food inventory at least quarterly to verify the federal food inventory amounts in the SMF QuickBooks file are correct. Additionally, after all receipts, disbursements and adjustments are made each month, the accounting system for inventory should be locked down with a password to prevent unintended changes. We also recommend the reporting to ADE be reconciled to the federal food receipts and inventory on hand at month-end. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan on page 31.
Finding 2024-002
Finding 2024-002 Department of Agriculture Food Distribution Cluster – Assistance Listing# 10.565, 10.568, 10.569 Award Year - January 1, 2024 to December 31, 2024 Award Number – 6000001537 Special Tests and Provisions – Federal Food Receipts Testing Type of Finding – Significant Deficiency Internal Controls and Noncompliance relating to Inventory Reporting Criteria: Internal Controls should be designed and implemented to ensure federal food receipts are properly reflected in the QuickBooks SMF activity. Additionally, controls should be implemented to ensure all federal food receipts and only federal food receipts are recorded as received under the USDA/CSFP accounts in the QuickBooks SMF activity. Condition: Federal food receipts recorded by the Organization differed from federal food donations reported by the Arkansas Department of Education (ADE) (formerly Arkansas Department of Human Services) for the year ended December 31, 2024. This included instances where food items were recorded at different amounts as well as instances where items were recorded as received by the Organization without a corresponding donation receipted by ADE. Context: The Organization exercises limited control and review procedures over inventory received, distributed and adjusted within the SMF QuickBooks on a monthly basis. Additionally, no reconciliation is performed on inventory at month-end and inventory reported to ADE. Effect or Potential Effect: Federal food inventory could be misstated as a result of the limited control and review procedures. Recommendation: All paperwork for federal food commodities received should be filed in separate folders according to the provider (USDA or CSFP). On each receiving document, a conversion should be notated to convert from cases to pounds based on the Organization’s weight of one case as listed in the account name detail. Receipts should be entered in the SMF system and submitted to ADE within 48 hours of delivery. Additional attention should be made to the proper coding of food items (USDA versus CSFP). We recommend all receipt of products from all sources and all distribution of product be verified by a secondary person, with any discrepancies being researched and corrected. We recommend the Organization count all federal food inventory at least quarterly to verify the federal food inventory amounts in the SMF QuickBooks file are correct. Additionally, after all receipts, disbursements and adjustments are made each month, the accounting system for inventory should be locked down with a password to prevent unintended changes. We also recommend the reporting to ADE be reconciled to the federal food receipts and inventory on hand at month-end. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan on page 31.
Finding 2024-002
Finding 2024-002 Department of Agriculture Food Distribution Cluster – Assistance Listing# 10.565, 10.568, 10.569 Award Year - January 1, 2024 to December 31, 2024 Award Number – 6000001537 Special Tests and Provisions – Federal Food Receipts Testing Type of Finding – Significant Deficiency Internal Controls and Noncompliance relating to Inventory Reporting Criteria: Internal Controls should be designed and implemented to ensure federal food receipts are properly reflected in the QuickBooks SMF activity. Additionally, controls should be implemented to ensure all federal food receipts and only federal food receipts are recorded as received under the USDA/CSFP accounts in the QuickBooks SMF activity. Condition: Federal food receipts recorded by the Organization differed from federal food donations reported by the Arkansas Department of Education (ADE) (formerly Arkansas Department of Human Services) for the year ended December 31, 2024. This included instances where food items were recorded at different amounts as well as instances where items were recorded as received by the Organization without a corresponding donation receipted by ADE. Context: The Organization exercises limited control and review procedures over inventory received, distributed and adjusted within the SMF QuickBooks on a monthly basis. Additionally, no reconciliation is performed on inventory at month-end and inventory reported to ADE. Effect or Potential Effect: Federal food inventory could be misstated as a result of the limited control and review procedures. Recommendation: All paperwork for federal food commodities received should be filed in separate folders according to the provider (USDA or CSFP). On each receiving document, a conversion should be notated to convert from cases to pounds based on the Organization’s weight of one case as listed in the account name detail. Receipts should be entered in the SMF system and submitted to ADE within 48 hours of delivery. Additional attention should be made to the proper coding of food items (USDA versus CSFP). We recommend all receipt of products from all sources and all distribution of product be verified by a secondary person, with any discrepancies being researched and corrected. We recommend the Organization count all federal food inventory at least quarterly to verify the federal food inventory amounts in the SMF QuickBooks file are correct. Additionally, after all receipts, disbursements and adjustments are made each month, the accounting system for inventory should be locked down with a password to prevent unintended changes. We also recommend the reporting to ADE be reconciled to the federal food receipts and inventory on hand at month-end. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan on page 31.
Finding 2024-002
Finding 2024-002 Department of Agriculture Food Distribution Cluster – Assistance Listing# 10.565, 10.568, 10.569 Award Year - January 1, 2024 to December 31, 2024 Award Number – 6000001537 Special Tests and Provisions – Federal Food Receipts Testing Type of Finding – Significant Deficiency Internal Controls and Noncompliance relating to Inventory Reporting Criteria: Internal Controls should be designed and implemented to ensure federal food receipts are properly reflected in the QuickBooks SMF activity. Additionally, controls should be implemented to ensure all federal food receipts and only federal food receipts are recorded as received under the USDA/CSFP accounts in the QuickBooks SMF activity. Condition: Federal food receipts recorded by the Organization differed from federal food donations reported by the Arkansas Department of Education (ADE) (formerly Arkansas Department of Human Services) for the year ended December 31, 2024. This included instances where food items were recorded at different amounts as well as instances where items were recorded as received by the Organization without a corresponding donation receipted by ADE. Context: The Organization exercises limited control and review procedures over inventory received, distributed and adjusted within the SMF QuickBooks on a monthly basis. Additionally, no reconciliation is performed on inventory at month-end and inventory reported to ADE. Effect or Potential Effect: Federal food inventory could be misstated as a result of the limited control and review procedures. Recommendation: All paperwork for federal food commodities received should be filed in separate folders according to the provider (USDA or CSFP). On each receiving document, a conversion should be notated to convert from cases to pounds based on the Organization’s weight of one case as listed in the account name detail. Receipts should be entered in the SMF system and submitted to ADE within 48 hours of delivery. Additional attention should be made to the proper coding of food items (USDA versus CSFP). We recommend all receipt of products from all sources and all distribution of product be verified by a secondary person, with any discrepancies being researched and corrected. We recommend the Organization count all federal food inventory at least quarterly to verify the federal food inventory amounts in the SMF QuickBooks file are correct. Additionally, after all receipts, disbursements and adjustments are made each month, the accounting system for inventory should be locked down with a password to prevent unintended changes. We also recommend the reporting to ADE be reconciled to the federal food receipts and inventory on hand at month-end. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan on page 31.
Finding 2024-002
Finding 2024-002 Department of Agriculture Food Distribution Cluster – Assistance Listing# 10.565, 10.568, 10.569 Award Year - January 1, 2024 to December 31, 2024 Award Number – 6000001537 Special Tests and Provisions – Federal Food Receipts Testing Type of Finding – Significant Deficiency Internal Controls and Noncompliance relating to Inventory Reporting Criteria: Internal Controls should be designed and implemented to ensure federal food receipts are properly reflected in the QuickBooks SMF activity. Additionally, controls should be implemented to ensure all federal food receipts and only federal food receipts are recorded as received under the USDA/CSFP accounts in the QuickBooks SMF activity. Condition: Federal food receipts recorded by the Organization differed from federal food donations reported by the Arkansas Department of Education (ADE) (formerly Arkansas Department of Human Services) for the year ended December 31, 2024. This included instances where food items were recorded at different amounts as well as instances where items were recorded as received by the Organization without a corresponding donation receipted by ADE. Context: The Organization exercises limited control and review procedures over inventory received, distributed and adjusted within the SMF QuickBooks on a monthly basis. Additionally, no reconciliation is performed on inventory at month-end and inventory reported to ADE. Effect or Potential Effect: Federal food inventory could be misstated as a result of the limited control and review procedures. Recommendation: All paperwork for federal food commodities received should be filed in separate folders according to the provider (USDA or CSFP). On each receiving document, a conversion should be notated to convert from cases to pounds based on the Organization’s weight of one case as listed in the account name detail. Receipts should be entered in the SMF system and submitted to ADE within 48 hours of delivery. Additional attention should be made to the proper coding of food items (USDA versus CSFP). We recommend all receipt of products from all sources and all distribution of product be verified by a secondary person, with any discrepancies being researched and corrected. We recommend the Organization count all federal food inventory at least quarterly to verify the federal food inventory amounts in the SMF QuickBooks file are correct. Additionally, after all receipts, disbursements and adjustments are made each month, the accounting system for inventory should be locked down with a password to prevent unintended changes. We also recommend the reporting to ADE be reconciled to the federal food receipts and inventory on hand at month-end. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan on page 31.
Finding 2024-002
Finding 2024-002 Department of Agriculture Food Distribution Cluster – Assistance Listing# 10.565, 10.568, 10.569 Award Year - January 1, 2024 to December 31, 2024 Award Number – 6000001537 Special Tests and Provisions – Federal Food Receipts Testing Type of Finding – Significant Deficiency Internal Controls and Noncompliance relating to Inventory Reporting Criteria: Internal Controls should be designed and implemented to ensure federal food receipts are properly reflected in the QuickBooks SMF activity. Additionally, controls should be implemented to ensure all federal food receipts and only federal food receipts are recorded as received under the USDA/CSFP accounts in the QuickBooks SMF activity. Condition: Federal food receipts recorded by the Organization differed from federal food donations reported by the Arkansas Department of Education (ADE) (formerly Arkansas Department of Human Services) for the year ended December 31, 2024. This included instances where food items were recorded at different amounts as well as instances where items were recorded as received by the Organization without a corresponding donation receipted by ADE. Context: The Organization exercises limited control and review procedures over inventory received, distributed and adjusted within the SMF QuickBooks on a monthly basis. Additionally, no reconciliation is performed on inventory at month-end and inventory reported to ADE. Effect or Potential Effect: Federal food inventory could be misstated as a result of the limited control and review procedures. Recommendation: All paperwork for federal food commodities received should be filed in separate folders according to the provider (USDA or CSFP). On each receiving document, a conversion should be notated to convert from cases to pounds based on the Organization’s weight of one case as listed in the account name detail. Receipts should be entered in the SMF system and submitted to ADE within 48 hours of delivery. Additional attention should be made to the proper coding of food items (USDA versus CSFP). We recommend all receipt of products from all sources and all distribution of product be verified by a secondary person, with any discrepancies being researched and corrected. We recommend the Organization count all federal food inventory at least quarterly to verify the federal food inventory amounts in the SMF QuickBooks file are correct. Additionally, after all receipts, disbursements and adjustments are made each month, the accounting system for inventory should be locked down with a password to prevent unintended changes. We also recommend the reporting to ADE be reconciled to the federal food receipts and inventory on hand at month-end. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan on page 31.
Finding 2024-002
Finding 2024-002 Department of Agriculture Food Distribution Cluster – Assistance Listing# 10.565, 10.568, 10.569 Award Year - January 1, 2024 to December 31, 2024 Award Number – 6000001537 Special Tests and Provisions – Federal Food Receipts Testing Type of Finding – Significant Deficiency Internal Controls and Noncompliance relating to Inventory Reporting Criteria: Internal Controls should be designed and implemented to ensure federal food receipts are properly reflected in the QuickBooks SMF activity. Additionally, controls should be implemented to ensure all federal food receipts and only federal food receipts are recorded as received under the USDA/CSFP accounts in the QuickBooks SMF activity. Condition: Federal food receipts recorded by the Organization differed from federal food donations reported by the Arkansas Department of Education (ADE) (formerly Arkansas Department of Human Services) for the year ended December 31, 2024. This included instances where food items were recorded at different amounts as well as instances where items were recorded as received by the Organization without a corresponding donation receipted by ADE. Context: The Organization exercises limited control and review procedures over inventory received, distributed and adjusted within the SMF QuickBooks on a monthly basis. Additionally, no reconciliation is performed on inventory at month-end and inventory reported to ADE. Effect or Potential Effect: Federal food inventory could be misstated as a result of the limited control and review procedures. Recommendation: All paperwork for federal food commodities received should be filed in separate folders according to the provider (USDA or CSFP). On each receiving document, a conversion should be notated to convert from cases to pounds based on the Organization’s weight of one case as listed in the account name detail. Receipts should be entered in the SMF system and submitted to ADE within 48 hours of delivery. Additional attention should be made to the proper coding of food items (USDA versus CSFP). We recommend all receipt of products from all sources and all distribution of product be verified by a secondary person, with any discrepancies being researched and corrected. We recommend the Organization count all federal food inventory at least quarterly to verify the federal food inventory amounts in the SMF QuickBooks file are correct. Additionally, after all receipts, disbursements and adjustments are made each month, the accounting system for inventory should be locked down with a password to prevent unintended changes. We also recommend the reporting to ADE be reconciled to the federal food receipts and inventory on hand at month-end. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan on page 31.
Finding 2024-002
Finding 2024-002 Department of Agriculture Food Distribution Cluster – Assistance Listing# 10.565, 10.568, 10.569 Award Year - January 1, 2024 to December 31, 2024 Award Number – 6000001537 Special Tests and Provisions – Federal Food Receipts Testing Type of Finding – Significant Deficiency Internal Controls and Noncompliance relating to Inventory Reporting Criteria: Internal Controls should be designed and implemented to ensure federal food receipts are properly reflected in the QuickBooks SMF activity. Additionally, controls should be implemented to ensure all federal food receipts and only federal food receipts are recorded as received under the USDA/CSFP accounts in the QuickBooks SMF activity. Condition: Federal food receipts recorded by the Organization differed from federal food donations reported by the Arkansas Department of Education (ADE) (formerly Arkansas Department of Human Services) for the year ended December 31, 2024. This included instances where food items were recorded at different amounts as well as instances where items were recorded as received by the Organization without a corresponding donation receipted by ADE. Context: The Organization exercises limited control and review procedures over inventory received, distributed and adjusted within the SMF QuickBooks on a monthly basis. Additionally, no reconciliation is performed on inventory at month-end and inventory reported to ADE. Effect or Potential Effect: Federal food inventory could be misstated as a result of the limited control and review procedures. Recommendation: All paperwork for federal food commodities received should be filed in separate folders according to the provider (USDA or CSFP). On each receiving document, a conversion should be notated to convert from cases to pounds based on the Organization’s weight of one case as listed in the account name detail. Receipts should be entered in the SMF system and submitted to ADE within 48 hours of delivery. Additional attention should be made to the proper coding of food items (USDA versus CSFP). We recommend all receipt of products from all sources and all distribution of product be verified by a secondary person, with any discrepancies being researched and corrected. We recommend the Organization count all federal food inventory at least quarterly to verify the federal food inventory amounts in the SMF QuickBooks file are correct. Additionally, after all receipts, disbursements and adjustments are made each month, the accounting system for inventory should be locked down with a password to prevent unintended changes. We also recommend the reporting to ADE be reconciled to the federal food receipts and inventory on hand at month-end. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan on page 31.
Finding 2024-002
Finding 2024-002 Department of Agriculture Food Distribution Cluster – Assistance Listing# 10.565, 10.568, 10.569 Award Year - January 1, 2024 to December 31, 2024 Award Number – 6000001537 Special Tests and Provisions – Federal Food Receipts Testing Type of Finding – Significant Deficiency Internal Controls and Noncompliance relating to Inventory Reporting Criteria: Internal Controls should be designed and implemented to ensure federal food receipts are properly reflected in the QuickBooks SMF activity. Additionally, controls should be implemented to ensure all federal food receipts and only federal food receipts are recorded as received under the USDA/CSFP accounts in the QuickBooks SMF activity. Condition: Federal food receipts recorded by the Organization differed from federal food donations reported by the Arkansas Department of Education (ADE) (formerly Arkansas Department of Human Services) for the year ended December 31, 2024. This included instances where food items were recorded at different amounts as well as instances where items were recorded as received by the Organization without a corresponding donation receipted by ADE. Context: The Organization exercises limited control and review procedures over inventory received, distributed and adjusted within the SMF QuickBooks on a monthly basis. Additionally, no reconciliation is performed on inventory at month-end and inventory reported to ADE. Effect or Potential Effect: Federal food inventory could be misstated as a result of the limited control and review procedures. Recommendation: All paperwork for federal food commodities received should be filed in separate folders according to the provider (USDA or CSFP). On each receiving document, a conversion should be notated to convert from cases to pounds based on the Organization’s weight of one case as listed in the account name detail. Receipts should be entered in the SMF system and submitted to ADE within 48 hours of delivery. Additional attention should be made to the proper coding of food items (USDA versus CSFP). We recommend all receipt of products from all sources and all distribution of product be verified by a secondary person, with any discrepancies being researched and corrected. We recommend the Organization count all federal food inventory at least quarterly to verify the federal food inventory amounts in the SMF QuickBooks file are correct. Additionally, after all receipts, disbursements and adjustments are made each month, the accounting system for inventory should be locked down with a password to prevent unintended changes. We also recommend the reporting to ADE be reconciled to the federal food receipts and inventory on hand at month-end. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan on page 31.