Audit 409917

Finding 2025-002 Federal Agency: Federal Program: CFDA: Department of Agriculture Food Distribution Cluster #10.568, 10.569 Compliance Requirement: Special Tests and Provisions – Accountability for USDA Foods Type of Finding: Significant Deficiency in Internal Controls over Compliance Repeat Finding: CRITERIA: Yes 7 CFR Section 250.19 Recordkeeping Requirements Accurate and complete records must be maintained with respect to the receipt, distribution/use, and inventory of USDA Foods. CONDITION: When products are received, a bill of lading from the trucking company is received with the goods. Two people in the warehouse count and weigh the products and verify that their count, weight, and date of receipt agree to the bill of lading as indicated by their signature on the bill of lading. Received items are inspected for damage, physical condition, temperature (on refrigerated/frozen product), visual quality, and package dates, etc. CONTEXT: From a sample of twenty-five (25) donated items, one (1) donation had no indication included in bill of lading denoting the items were TEFAP products. QUESTIONED COSTS: N/A CAUSE: Controls were not in place to ensure all inventory transactions were properly documented with indication of TEFAP products. EFFECTS: Inventories may not be accounted for properly. RECOMMENDATIONS: We recommend controls be strengthened to ensure all donations are supported with verification of count, weight, product identification, and other inspection of the product as evidenced through signature of the person(s) receiving inventory items. This could be made through a checklist attached to the bill of lading and used with entering the items into the inventory system that includes verification was properly made and items properly set up in inventory. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION: The Organization agrees with the finding.

Finding 2025-003 Federal Agency: Federal Program: CFDA: Department of Agriculture Food Distribution Cluster #10.568, 10.569 Compliance Requirement: Special Tests and Provisions – Accountability for USDA Foods Type of Finding: Significant Deficiency in Internal Controls over Compliance Repeat Finding: CRITERIA: No 7 CFR §250.19 Recordkeeping Requirements Accurate and complete records must be maintained with respect to the receipt, distribution/use, and inventory of USDA Foods. Failure of the distributing agency to comply with recordkeeping requirements must be considered prima facie evidence of improper distribution or loss of donated foods and may result in a claim against such party for the loss or misuse of donated foods. In addition, records relating to the requirements for donated foods must be retained for a period of three years from the close of the fiscal year to which they pertain. CONDITION: When products are received, a bill of lading from the trucking company is received with the goods. Two people in the warehouse count and weigh the products and verify that their count, weight, and date of receipt agree to the bill of lading as indicated by their signature on the bill of lading. Received items are inspected for damage, physical condition, temperature (on refrigerated/frozen product), visual quality, and package dates, etc. CONTEXT: From a sample of twenty-five (25) donated items, one (1) donation had no supporting documentation. Thus, there was no bill of lading denoting the items were TEFAP products. QUESTIONED COSTS: N/A CAUSE: Controls were not in place to ensure all inventory transactions are properly documented with signature for inspections upon disbursement of inventory. EFFECTS: Inventories may not be accounted for properly. RECOMMENDATIONS: We recommend original records relating to the requirements for distributed foods be retained for the required period. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION: The Organization agrees with the finding.