Audit 392395

Federal Program: The Emergency Food Assistance Program (TEFAP) / Temporary Assistance for Needy Families (TANF) Assistance Listing (CFDA) Numbers: 10.187 and 93.558 Awarding Agency: U.S. Department of Agriculture / U.S. Department of Health and Human Services Pass-Through Entity: Ohio Association of Foodbanks (OAF) Compliance Requirement: Reporting Finding Type: Material Weakness in Compliance 2025-001 Inaccurate Federal Reporting Due to Insufficient Reconciliation Controls Criteria: Uniform Guidance (2 CFR §200.303 and §200.328) requires non-federal entities to establish and maintain effective internal control over federal awards and to ensure that required reports are accurate, complete, and supported by underlying accounting records. The OMB Compliance Supplement identifies Reporting as a direct and material compliance requirement. The Ohio Association of Foodbanks (OAF) prescribes specific data elements for monthly reporting, including counties served, member agencies, distribution activity, and service statistics. Condition: During testing of reporting compliance for major federal programs, we selected three of twelve monthly OAF reports submitted during the fiscal year. For each month tested, reported amounts did not reconcile to MOFC’s internal Poundage Distribution reports and Product Code – Agencies by County reports. Specifically, we identified material variances between the OAF reports and internal distribution records, including: - October 2024: ACP distributions were omitted from the OAF report, resulting in a variance of approximately 821,528 pounds (projected dollar impact of $262,889). - January 2025: VA/Holiday Purchase distributions were omitted from the OAF report, resulting in a variance of approximately 310,898 pounds (projected dollar impact of $155,449). - June 2025: Donated distributions, primarily Direct Retail Pickup (DRP) quantities, were omitted from the OAF report, resulting in a variance of approximately 933,505 pounds (projected dollar impact of $1,764,324). Additional differences were noted in purchased distributions at 40,399 pounds (projected dollar impact of $16,968. Although management provided explanations indicating that certain distributions were omitted in error or excluded due to differences in reporting scope, MOFC did not maintain documented reconciliations supporting the reported amounts. Evidence of review and approval demonstrating that differences were identified, investigated, and resolved prior to report submission was not provided. Cause of Condition: MOFC did not have formalized, documented reconciliation procedures to ensure that internal distribution reports were reconciled to amounts reported to OAF. In addition, management review controls over the preparation and approval of OAF reports were not sufficiently designed or documented to detect and prevent reporting errors prior to submission. Potential Effect of Condition: As a result, OAF reports submitted during the fiscal year were not fully supported by underlying records, increasing the risk of inaccurate reporting to the passthrough entity. This condition resulted in noncompliance with Uniform Guidance reporting requirements and may affect MOFC’s continued eligibility for federal funding. Based on the magnitude and frequency of the variances identified, this condition represents a material weakness in compliance for the reporting compliance requirement. Context: The materiality thresholds for assessing material noncompliance for the major programs were $217,800 for TEFAP (CFDA 10.187) and $301,000 for TANF (CFDA 93.558). Questioned Costs: No questioned costs were identified for this finding, as the variances relate to reporting accuracy rather than unsupported or ineligible expenditures. Recommendation: We recommend that MOFC implement formal, documented reconciliation procedures between internal distribution reports and the OAF report. Such procedures should include: 1. Preparation of a detailed supporting schedule used in compiling OAF reports 2. Documentation of reconciling items and explanations for differences between internal reports and amounts reported to OAF 3. Evidence of management review and approval prior to report submission Views of Responsible Officials and Planned Corrective Action: MOFC management acknowledged the reporting differences and stated that certain variances resulted from omitted distributions and differences in reporting scope. Management indicated plans to enhance internal review procedures and improve documentation supporting the preparation and submission of OAF reports.