Federal Agency: U.S. Department of Agriculture Federal Program Name: The Emergency Food Assistance Program (Food Commodities) Assistance Listing Number: 10.569 Pass-through Agency: Pennsylvania Department of Agriculture Pass-through Number: 5-07-39-217 Award Period: July 1, 2021 – September 30, 2026 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria: 3 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards require compliance with the provisions of eligibility. The Organization should have procedures and controls in place to ensure distributing agencies of The Emergency Food Assistance Program (TEFAP) are eligible to receive commodities for distribution to their participants. Condition: During our testing, we identified there was no monitoring performed for 1 out of the 21 agencies tested which distributed TEFAP commodities during fiscal year 2024. Questioned Costs: None. Context: The Organization did not have proper internal controls in place to monitor the food distributed in a timely manner. Cause: The organization had an issue with the internal tracking schedule resulting in the monitoring not being completed within the required two-year period. Effect: The Organization collected data and monitored participating agencies after year end and without the ability to modify food distributions if any ineligible participants were discovered during the program year. No ineligible distributions were determined based on subsequent monitoring activities. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2023- 003. Recommendation: The Organization should prioritize the timely monitoring of participating agencies to allow for changes in food distributions if any ineligible participants are discovered. View of Responsible Officials and Planned Corrective Action: Please refer to Community Action Committee of the Lehigh Valley, Inc. and subsidiaries’ Corrective Action Plan.
Federal Agency: U.S. Department of Agriculture Federal Program Name: The Emergency Food Assistance Program (Administrative); Commodity Supplemental Food Program (Administrative) Assistance Listing Number: 10.568 and 10.565 Pass-through Agency: Hunger Free Pennsylvania (HFP); Pennsylvania Department of Agriculture (PDA); Lehigh County (LC); Northampton County (NC); Carbon County (CC) Pass-through Number: 5-07-39-217 (PDA) Award Period: August 5, 2021 – December 31, 2024 (HFP); October 1, 2021 – September 30, 2026 (PDA, LC, NC, CC) Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria: For both CSFP and TEFAP, a recipient agency must use its administrative funds for activities for the administration of the programs. Such activities include but are not limited to transporting and storing USDA Foods within the state or within a recipient agency’s service area, determining the eligibility of program applicants, publishing the times and locations of food distribution, and issuing USDA Foods to eligible persons (7 CFR sections 247.25 and 251.8(e)). Condition: The Organization does not have formal procedures in place to determine the Second Harvest Food Bank expenses incurred during the fiscal year that should be allocated to the TEFAP/CSFP administrative revenue received. The Organization has historically recognized revenue based on when cash is received which is not appropriate. Questioned Costs: None. Context: Management does not have a timely process for determining the allocation of eligible expenses for the administrative revenue received for the distribution of commodities. Management was able to provide a reasonable allocation methodology which was used to create the program expenditure detail for the audit period, however, was provided significantly after year-end. Cause: The Organization experienced turnover within the finance department which resulted in no formal procedures in place for the allocation of allowable costs. Effect: If the Organization does not have timely proper allocation procedures, the Organization could potentially recognize revenue that is not appropriately substantiated with allowable costs and activities in compliance with program requirements. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2023- 004. Recommendation: We recommend the allocation of allowable costs and activities be completed at a minimum on a quarterly basis. Also, any direct expenses related to program activities should be recorded to the respective identifying program fund number within the accounting software. The amount of revenue recognized for the programs should be reflected of the expenses incurred up to the administrative funds received from the respective funders. View of Responsible Officials and Planned Corrective Action: Please refer to Community Action Committee of the Lehigh Valley, Inc. and Subsidiaries’ Corrective Action Plan.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Community Service Block Grant Assistance Listing Number: 93.569 Pass-through Agency: Pennsylvania Department of Community and Economic Development Pass-Through Number: Contract #C000082084 Award Period: January 1, 2022 – December 31, 2027 Type of Finding: • Material Weakness in Internal Control over Compliance • Other Matters Criteria: 3 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of period of performance. The Organization should have procedures and controls in place to ensure expenses are charged to a federal program within the approved period of performance. In addition, in accordance with 2 CFR Part 200.403, allowable costs should be determined in accordance with generally accepted accounting principles (GAAP), therefore payroll accruals should be appropriately reflected when recording program expenditures. Condition: During our testing, we noted there were several salary expenditures charged to the grant based on the payroll period ending date, however the costs were incurred for the period 12/23/23 - 1/5/24, which the first nine days were prior to the start of the period of performance. Questioned Costs: There were known questioned costs identified in the amount of $6,868. Context: During our testing of community service block grant costs recorded during the beginning of the approved period of performance (January 2024), we noted there were thirty five transactions tested charged to the federal program in January 2024 for salary and related payroll taxes which are portion was incurred prior to the start of the contract period. Based on the review of the supporting documentation, it was noted that the payroll period was 12/23/23 - 1/5/24, which the first nine days were prior to the start of the period of performance. The total amount of the transactions was $6,868. Cause: The Organization recorded the transactions into the general ledger based on the payroll period ending date and invoice date rather than the date the transactions were incurred by the Organization. Effect: If the organization includes expenses either incurred before the start date or after the end date of the approved period of performance, it could result in funds being required to be returned to the funding agency. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2023- 006. Recommendation: The Organization should work with the federal agency to provide additional documentation or justification for the expenses, or to adjust the budget or funding limits to ensure that all expenses are within the approved period of performance. It is important to address any period of performance findings as soon as possible to avoid potential penalties or repayment obligations. The Organization should also review its process of entering invoices and payroll related expenses into the accounting software to ensure the correct period is used for federal expenditures. View of Responsible Officials and Planned Corrective Action: Please refer to Community Action Committee of the Lehigh Valley, Inc. and Subsidiaries’ Corrective Action Plan.
Federal Agency: U.S. Department of Health and Human Services; U.S. Department of the Treasury Federal Program Name: Low-Income Home Energy Assistance; Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 93.568, 21.027 Pass-through Agency: Pennsylvania Department of Community and Economic Development (Liheap/SLFRF); PA CDFI (SBG/SBGII) Pass-Through Number: Contract #C000073877 (Liheap); Contract #C000084605 (SLFRF); Contract #C000082280 (SBG); Contract #C000086369 (SBGII) Award Period: October 1, 2020 – September 30, 2025 (Liheap); December 12, 2022 - December 31, 2026 (SLFRF); June 27, 2022 - December 31, 2026 (SBG); February 5, 2024 - June 30, 2026 (SBG) Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria: The compliance requirement for performance reporting requires organizations to establish and maintain effective internal controls to ensure that reported performance information is accurate, complete, timely, and verifiable. This includes documented procedures, clearly defined roles and responsibilities, evidence of supervisory review and approval by authorized personnel, and retention of supporting documentation sufficient to substantiate reported performance results. Condition: During our testing of performance and special reporting, we noted that the Organization did not maintain documentation evidencing review or approval of submitted reports. The reports tested did not include evidence demonstrating that an authorized individual reviewed and approved the performance and special reports prior to submission. Questioned Costs: No questioned costs have been identified. Context: This condition was identified during testing of performance and special reporting for the federal program. For all items selected, documentation of review or approval was not available. Cause: The Organization has not implemented formalized procedures requiring documented review and approval of performance and special reports prior to submission. Additionally, roles and responsibilities related to report preparation, review, and approval have not been clearly defined or enforced. Effect: Without documented evidence of review and approval by an authorized individual, the Organization cannot demonstrate that performance and special reports were appropriately reviewed prior to submission. This increases the risk that reports may contain errors, omissions, or unsupported information and limits assurance that reported performance results are reliable and compliant with applicable reporting requirements Repeat Finding: N/A: Not a repeat finding Recommendation: The Organization should implement formal internal controls over performance and special reporting by establishing documented procedures that require review and approval of all reports prior to submission. Management should define clear roles and responsibilities for report preparation and independent review, ensure that reviews are performed by an authorized individual, and maintain documentation evidencing review and approval, such as signatures, dates, or electronic approvals, to support compliance with performance reporting requirements. View of Responsible Officials and Planned Corrective Action: Please refer to Community Action Committee of the Lehigh Valley, Inc. and Subsidiaries’ Corrective Action Plan.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-through Agency: Northampton County Pass-Through Number: N/A Award Period: May 18, 2022 - December 31, 2025; October 1, 2022 - December 31, 2025 May 18, 2023 - December 31, 2025 Type of Finding: • Material Weakness in Internal Control over Compliance • Other Matters Criteria: Uniform Guidance requires recipients to prepare, submit, and retain accurate, complete, and timely financial reports for federal awards in accordance with 2 CFR §§ 200.327 and 200.328. Additionally, federal record retention requirements (2 CFR § 200.334) require organizations to maintain supporting documentation sufficient to substantiate reported program activity. Condition: During audit testing of financial reporting for the Coronavirus State and Local Fiscal Recovery Funds program, the Organization was unable to locate three of ten financial reports requested for review. As a result, auditors were unable to verify the accuracy, completeness, or timeliness of the reported financial information for those reporting periods. Questioned Costs: None. Context: Ten reports were requested for audit testing and management was unable to provide three of the requested reports. Cause: The Organization experienced turnover within the finance department, which contributed to inadequate document retention and weaknesses in controls over the preparation and maintenance of required financial reports. Effect: Failure to maintain and provide required financial reports constitutes noncompliance with federal reporting and record retention requirements. The absence of key source documentation limits assurance that reported program activity is accurate and supported and increases the risk of misreporting or unsupported claims being submitted to the federal government. Repeat Finding: N/A: Not a repeat finding Recommendation: The Organization should strengthen internal controls over financial reporting and record retention by establishing clear procedures to ensure that all required reports are accurately prepared, timely submitted, and retained in accordance with federal requirements. Management should designate responsible personnel and implement monitoring procedures to verify compliance with reporting and documentation standards. View of Responsible Officials and Planned Corrective Action: Please refer to Community Action Committee of the Lehigh Valley, Inc. and Subsidiaries’ Corrective Action Plan.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-through Agency: Northampton County Pass-Through Number: N/A Award Period: May 18, 2022 - December 31, 2025; October 1, 2022 - December 31, 2025 May 18, 2023 - December 31, 2025 Type of Finding: • Material Weakness in Internal Control over Compliance • Other Matters Criteria: Uniform Guidance (2 CFR §§ 200.317–200.327) requires non‑federal entities to maintain written procurement procedures and documentation supporting procurement transactions to ensure compliance with applicable federal regulations. Additionally, entities must verify and document that vendors are not suspended or debarred from participation in federal programs prior to award, in accordance with 2 CFR § 200.214. Condition: During audit testing of procurement and suspension and debarment requirements for the Coronavirus State and Local Fiscal Recovery Funds program, the Organization was unable to provide documentation supporting the procurement selections tested. Additionally, documentation evidencing verification of vendor suspension and debarment status was not available for the selections reviewed. Questioned Costs: None. Context: Procurement and suspension and debarment documentation was requested for audit testing, and management was unable to provide documentation supporting the procurement selections and vendor eligibility for the items tested. Cause: The Organization did not consistently maintain required procurement and suspension and debarment documentation. Contributing factors included turnover within the finance and administrative functions and the absence of formalized procedures to ensure documentation is retained and readily available for audit and monitoring purposes. Effect: The lack of procurement and suspension and debarment documentation constitutes noncompliance with federal procurement requirements. Without adequate documentation, the Organization cannot demonstrate that procurements were conducted in accordance with Uniform Guidance or that vendors were eligible to receive federal funds and increases the risk of improper or unsupported expenditures of federal funds. Repeat Finding: N/A: Not a repeat finding Recommendation: The Organization should strengthen internal controls over procurement and suspension and debarment compliance by establishing and enforcing written procedures requiring documentation of procurement methods, vendor selection, and verification of suspension and debarment status prior to award. Management should ensure that all required documentation is retained in accordance with federal record retention requirements and subject to supervisory review. View of Responsible Officials and Planned Corrective Action: Please refer to Community Action Committee of the Lehigh Valley, Inc. and Subsidiaries’ Corrective Action Plan.