2022-002 Federal Agency: U.S. Department of Agriculture Federal Program Name: Beginning Farmer and Rancher Development Program Assistance Listing Number: 10.311 Federal Award Identification Number and Year: 2021: 2021-70033-35709 Award Period: September 1, 2021 to August 31, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR 200.303(a) states that a nonfederal entity must "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. Condition: During testing, one of the 24 samples selected had an individual approving their own timecard. Questioned costs: None. Context: A sample of 24 was made from a population of 193 paychecks processed during the year with costs charged to the major program. Out of the 24 timecards that were sampled, there was one instance where the individual whose timecard was being reviewed also approved their own timecard. The same individual was tested in multiple pay periods, and the self-approval appears to have been an isolated incident. Cause: Procedures requiring timesheets to be approved by a manager or director were not applied consistently. Effect: Without appropriate segregation of duties around the approval of timecards, there is an increased risk of inaccuracies, unauthorized payroll activity, and fraud within the timekeeping and payroll processes, which could result in inaccurate financial reporting and misappropriation of funds. Repeating finding: No. Recommendation: We recommend management provide additional training to employees and supervisors responsible for timesheet preparation and approval to reinforce compliance with established timesheet policies and approval controls. View of responsible officials: Management agrees with the finding and has provided its corrective action plan.
2022-004 Federal Agency: U.S. Department of Agriculture Federal Program Name: Beginning Farmer and Rancher Development Program Assistance Listing Number: 10.311 Federal Award Identification Number and Year: 2021: 2021-70033-35709 Award Period: September 1, 2021 to August 31, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matter Criteria or specific requirement: 2 CFR 200.303(a) states that a nonfederal entity must "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." In addition, 2 CFR 200.329(c)(1) states that the nonfederal entity must submit performance reports at the interval required by the awarding agency to best inform improvements in program outcomes and productivity. Condition: The FY2022 annual performance report lacked evidence of review and approval prior to submission and was submitted more than 90 days after the required reporting date. Questioned costs: None Context: One annual performance report was submitted approximately six weeks after its required due date. The report does not have evidence of review incorporated into the report file, and no external documentation was maintained to evidence appropriate review prior to report submission. Cause: Internal controls were not adequately documented and did not ensure timely review, approval, and submission of required reports. Effect: Delayed reporting may adversely affect program oversight, compliance monitoring, and future funding opportunities. Repeating finding: No. Recommendation: We recommend management implement a procedure that documents the executive director's review and approval of the annual Reports, such as retaining evidence of approval through a signed report or email correspondence. In addition, management should establish controls and provide training to help ensure reports are reviewed, approved, and submitted timely in accordance with applicable requirements. View of responsible officials: Management agrees with the finding and has provided its corrective action plan
2022-003 Federal Agency: U.S. Department of Agriculture Federal Program Name: Farmers Market and Local Food Promotion Program Assistance Listing Number: 10.175 Federal Award Identification Number and Year: 2020: AM200100XXXXG176 Award Period: September 30, 2020 to September 29, 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR 200.303(a) states that a nonfederal entity must "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. Condition: All eight transactions selected for testing of matching requirements lacked evidence of review and approval controls to ensure the transactions were allowable and appropriately applied to matching requirements. Questioned costs: None. Context: There are no documented controls surrounding transaction-level matching contributions to ensure they are allowable and properly coded to the federal program. However, a running total of matching is included on the form SF-270 that is reviewed and approved, as evidenced by the executive director's signature. Cause: Existing policies and procedures governing matching transactions do not require documented review and approval. Effect: A lack of documented controls over matching transactions could result in inaccurate, unsupported, or inappropriate reporting of matching contributions. Repeating finding: No. Recommendation: We recommend management implement a documented review and approval for matching transactions. View of responsible officials: Management agrees with the finding and has provided its corrective action plan.
2022-005 Federal Agency: U.S. Department of Agriculture Federal Program Names: Farmers Market and Local Food Promotion Program; Beginning Farmer and Rancher Development Program Assistance Listing Number: 10.175; 10.311 Federal Award Identification Number and Year: 2020: AM200100XXXXG176; 2021: 2021-70033-35709 Award Period: September 30, 2020 to September 29, 2023; September 1, 2021 to August 31, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matter Criteria or specific requirement: Per 2 CFR part 200, 200.305(b)(3), when the reimbursement method is used, the Federal agency or pass-through entity must make payment within 30 calendar days after receipt of the payment request unless the federal agency or pass-through entity reasonably believes the request to be improper. Condition: During testing, it was found that two of the three subrecipient payments tested for ALN 10.175, and one of two subrecipient payments tested for ALN 10.311, were not paid within the 30-day requirement. Questioned costs: None. Context: For ALN 10.175, two of the three subrecipient payments tested were not submitted timely. Similarly, for ALN 10.311, one of two subrecipient payments were not submitted timely. Delayed payments ranged from 19 days to 132 days beyond the 30-day requirement. CLA noted no reasonable extenuating circumstances that would cause a delay in repayment. Cause: Management's understanding of compliance requirements related to subrecipient reimbursements was insufficient, and controls were not established to ensure timely processing of payments. Effect: Delayed payments may adversely affect subrecipients' ability to manage cash flow and carry out program activities. Repeating finding: No. Recommendation: We recommend management implement policies, procedures, and trainings to ensure all subrecipient payment requests are reviewed and approved timely. View of responsible officials: Management agrees with the finding and has provided its corrective action plan
2022-006 Federal Agency: U.S. Department of Agriculture Federal Program Names: Farmers Market and Local Food Promotion Program; Beginning Farmer and Rancher Development Program Assistance Listing Number: 10.175; 10.311 Federal Award Identification Number and Year: 2020: AM200100XXXXG176; 2021: 2021-70033-35709 Award Period: September 30, 2020 to September 29, 2023; September 1, 2021 to August 31, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: Appendix A to 2 CFR Part 170, Section I.a.2(i) requires recipients of federal awards to report information on each first-tier subaward to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS) by the end of the month following the month in which the subaward was obligated. Condition: The Organization had one reportable first-tier subaward under ALN 10.175 (Local Food Promotion Program) and two reportable first-tier subawards under ALN 10.311 (Beginning Farmer and Rancher Development COVID Relief Grant) during FY2022. Required FFATA reports were not submitted to the FFATA Subaward Reporting System (FSRS) for any of the three reportable subawards. Questioned Costs: None. Context: During testing of the Reporting compliance requirement, one of one applicable subawards tested under ALN 10.175 and two of two applicable subawards tested under ALN 10.311 were not reported in the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS). Management indicated it was unaware of the FFATA reporting requirement; therefore, FFATA reports were not submitted for any applicable subawards. One reportable subaward was issued under ALN 10.175 and two reportable subawards were issued under ALN 10.311, resulting in three required FFATA reports that were not submitted. ALN Transactions Tested Subaward not reported Dollar amount of unreported subaward 10.175 1 1 $ 40,578 10.311 2 2 $ 180,000 Cause: Management was unaware of FFATA reporting requirements applicable to first-tier subawards under its federal awards. The Organization did not have controls designed to identify, evaluate, and monitor compliance with all applicable federal award terms, conditions, and regulations. As a result, required FFATA reports were not submitted. Effect: The Organization was not in compliance with the FFATA reporting requirements applicable to its federal awards. As a result, required first-tier subaward information was not reported to the FFATA Subaward Reporting System (FSRS), reducing transparency over federal award activities and resulting in material noncompliance with federal reporting requirements. Repeat finding: No. Recommendation: We recommend that management implement procedures to identify FFATA-reportable subawards and ensure all required reports are submitted timely. We further recommend that management review subawards issued subsequent to FY2022 to determine whether any required FFATA reports were omitted and consult with the applicable federal awarding agencies or pass-through entities regarding potential corrective actions, including whether late reporting may be accepted. View of responsible officials: Management agrees with the finding and has provided its corrective action plan.