Audit 400218

Finding Reference Number: 2025-001 Finding Type: Material Weakness Assistance Listing Number: 10.185 Program Title: Local Food for Schools Cooperative Agreement Program Federal Agency: U.S. Department of Agriculture Pass-Through Entity: Florida Department of Agriculture and Consumer Services Compliance Requirement: A/B – Activities Allowed or Unallowed and Allowable Costs/Cost Principles Criteria: The Uniform Guidance, 2 CFR section 200.303 requires the recipient and subrecipient of Federal funds to establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Additionally, the Uniform Guidance, 2 CFR section 200.401, requires the recipient and subrecipient of federal funds to apply cost principles in determining allowable costs under Federal awards. Condition: During the audit, it was noted that the grant agreement between the Organization and the Florida Department of Agriculture and Consumer Services allowed for administrative funding; to be no more than 25% of total eligible food purchases. Per review of the Uniform Guidance, 2 CFR Part 200, Appendix XI (the “OMB Compliance Supplement”) for ALN 10.185, direct or indirect costs associated with developing or administering the program are not allowable. Cause: The grant agreement with the pass-through entity allowed costs that were not allowable per the OMB Compliance Supplement. The Organization was unaware that the costs were unallowed as they solely followed the guidance outlined in their signed grant agreement with the pass-through entity. Effect: Although the Organization was in compliance with their subrecipient grant agreement, they were not in compliance with the Uniform Guidance. Questioned Costs: $246,202 Recommendation: We recommend that management review the OMB Compliance Supplement in addition to the grant agreement for any future federal awards received to ensure compliance with Activities Allowed or Unallowed and Allowable Costs/Cost Principles. Views of Responsible Officials: See attached Corrective Action Plan.