Audit 390526

Finding Reference Number: 2024-002 Reportable finding considered a significant deficiency - Inadequate support for distribution of donated food Title and CFDA Number of Federal Program: Emergency Food Assistance Program: 10.568 & 10.569 Federal award numbers & periods: 22-MOU-00108 23/24. 10/1/2023 - 9/30/2024 22-MOU-00108 24/25. 10/1/2024 - 9/30/2025 Type of Finding: Financial Statement and Federal Award Finding Finding Resolution Status: In Process Identification of Repeat Finding and Finding Reference Number: This is not a repeat finding Criteria: Organizations are required to maintain adequate documentation and an audit trail for all food distributions, including goods sent to distribution sites and goods used for on-site meal preparation, in accordance with sound internal control practices and applicable grant requirements (e.g., Uniform Guidance 2 CFR §200.302 – Financial Management and §200.303 – Internal Controls). Statement of Condition: During the audit, Food Bank Distribution Reports were provided showing goods sent to three locations, including recipient sign-offs, stating they received the food. Each location tracks food received and distributed to individuals. Leftover food is sent to various nonprofits to assist with distribution, if any. However, documentation for goods that were received and not distributed, at these three locations, could not be produced for review as an audit trail for who received and distributed leftover food. Additionally, Congregate Aggregate Feeding Reports, which track goods used for on-site meal preparation, and subsequent distribution, were also not available for review as they were not kept on file. The Organization lacked distribution documentation to support their monthly Distribution Report for goods distributed resulting in an incomplete audit trail. Cause: The Organization did not have formalized procedures or controls to ensure that all food distributions and on-site meal preparation activities were consistently documented and retained. Tracking was handled internally without standardized reporting requirements, resulting in incomplete records. Effect or Potential Effect: The absence of complete supporting documentation limits the Organization’s ability to demonstrate compliance with internal policies and donor requirements. It increases the risk of misstatement, misappropriation of goods, and potential noncompliance with grant or regulatory requirements. Questioned Costs: There are no questioned costs associated with this finding. Context: During our testing of food distribution documentation, we selected Food Bank Distribution Reports from three distribution locations for the audit period. For each location, we reviewed documentation supporting goods received, goods distributed, and any goods remaining at the end of the distribution cycle. While signed recipient logs were available to support goods initially received at the locations, supporting documentation for goods that were received but not distributed—including records identifying where leftover food was subsequently sent—was not available for any of the three locations reviewed. Additionally, for onsite meal preparation activities, we requested Congregate Aggregate Feeding Reports used to track the quantities of goods prepared and served; however, the Organization did not retain these reports for the period under audit. As a result, none of the sampled items related to meal preparation activities had supporting documentation available for review. Recommendation: We recommend that management implement and enforce policies to ensure that all food distributions, including on-site meal preparation and any goods not distributed separately, are properly tracked and supported by documentation. This should include maintaining Congregate Aggregate Feeding Reports, retaining all distribution records and reconciling them to the Monthly Distribution Report, establishing procedures to ensure discarded goods are documented appropriately. These steps will strengthen internal controls and provide a clear audit trail for all commodities. Auditors’ Summary of the Auditee’s Comments on the Findings and Recommendations: See Corrective Action Plan