Audit 405324

U.S. Department of Agriculture Passed through the Alabama State Department of Education Program: Child and Adult Care Food Program CFDA: 10.558 Grant Number: AF6-0000 Noncompliance/Significant Deficiency Procurement Criteria Per 2 CFR 200.318-200.326, non-federal entities must follow federal procurement standards when acquiring goods and services, including proper documentation. Condition During our audit of procurement activities, we identifed two food vendors that do not have formal agreements with the entity. Cause Staff believed that long-standing relations with vendors were sufficient and did not realize that federal procurement rules still apply annually. Effect Failure to follow procurement guidelines may affect allowability of expenditures charged to the program. Recommendation We recommend that the entity train staff on federal procurement guidelines. These guidelines should be followed for all vendors from which it is reasonably foreseeable that total purchases will exceed $10,000. Documentation should be maintained for all vendors. Management's Response The YMCA will implement additional procedures to ensure compliance with federal procurement requirements under Uniform Guidance. Staff responsible for purchasing and vendor management will receive additional training related to procurement standards, documentation requirements, and contract oversight. Management will also establish a formal review process to identify vendors expected to exceed the federal threshold and ensure appropriate agreements and supporting documentation are maintained annually.

U.S. Department of Agriculture Passed through the Alabama State Department of Education Program: Child and Adult Care Food Program CFDA: 10.558 Grant Number: AF6-0000 Noncompliance/Significant Deficiency Eligibility Criteria Under 7 CFR Part 226 and 2 CFR 200.303, institutions participating in the Child and Adult Care Program must ensure that all participants meet federal eligibility criteria. Sponsors are responsible for collecting and maintaining documentation that demonstrates participants eligibility and must conduct appropriate oversight of sites to ensure ongoing compliance. Condition During our audit, we identified two participants for which the YMCA did not provide documentation to support eligibility based on enrollment forms and Income Eligibility Forms. Cause Operating sites are separate from the YMCA. As such, all enrollment and child records are maintained by the operating sites. The YMCA failed to monitor that the operating sites were maintaining records to support the participants. Effect Sponsors without documentation for participants may result in unallowable costs and reimbursements for ineligible meals, placing the program at risk for disallowed funding. The YMCA may be required to repay federal funds for meals claimed on behalf of participants whose eligibility could not be substantiated. As a result, questioned costs projected based on a sample error rate of 7.05% applied to the total population of $422,011, resulting in projected questioned costs of $29,735. Recommendation We recommend the entity implement and enforce procedures to collect and retain all required eligibility documents for participants. Management's Response The YMCA has updated documentation and communicated that to all operating sites and will strengthen oversight procedures to ensure enrollment forms and Income Eligibility Forms are collected, retained, and reviewed timely. Management will implement periodic compliance monitoring and provide additional training to site staff to ensure all required participant documentation is properly maintained.

U.S. Department of Agriculture Passed through the Alabama State Department of Education Program: Child and Adult Care Food Program CFDA: 10.558 Grant Number: AF6-0000 Noncompliance/Significant Deficiency Eligibility Criteria Institutions must determine each enrolled participant's eligibility for free and reduced price meals in order to claim reimbursement for the meals served to that individual at the correct rate. Condition During our audit, we identified one participant that had the incorrect meal code being claimed. Cause The site responsible for entering participants meal codes did not have adequate training or oversight to ensure the correct eligibility category was applied. The error was not detected prior to submission of reimbursement claims. Effect Inadequate control over the income eligibility determination can lead to improper rate determinations resulting in incorrect reimbursement claims. As a result, questioned costs projected based on a sample error rate of 2.05% applied to the total population of $422,011, resulting in projected questioned costs of $8,658. Recommendation We recommend that staff responsible for determining eligibility at the site receive additional training regarding grant requirements. Management's Response Additional training will be provided to staff responsible for determining and entering participant meal eligibility codes to ensure proper classification and reimbursement claims. Management will also implement a secondary review process for eligibility determination prior to submission of reimbursement claims to reduce risk of future errors.