Audit 414508

INTERNAL CONTROL OVER COMPLIANCE: WRITTEN COMPLIANCE POLICIES AND PROCEDURES – significant deficiency. Condition: While certain compliance requirements have been formally documented, CAFF has not documented all required compliance policies and procedures (procurement, subrecipient monitoring, allowable costs), etc. Questioned Cost: None Effect: Without adequate compliance policies and procedures, there is risk that the system of internal control over compliance may not identify related errors, fraud, waste and/or abuse. Cause: This is the first Single audit undergone by Community Alliance with Family Farmers (CAFF) in a decade as Federally funded grants significantly increased in 2022. Recommendation: CAFF should identify all required Uniform compliance requirements under each grant and ensure that written policies and procedures exist, including key internal controls over compliance. Job descriptions should be updated accordingly. Status: See the Agency’s Corrective Action Plan on page 35.

DELINQUENT FILING OF SINGLE AUDIT REPORTS – significant deficiency. Criteria: Uniform Guidance requires audit reports be filed within the earlier of 30 days after receipt of audit report or nine months after the end of the audit period. Condition: CAFF is not in compliance with such filing requirement and the audits are significantly in arrears. Questioned Costs None Effect: Funders may delay future grant reimbursement or discontinue contracts. Cause: The fiscal 2022 Single audit report is the Agency’s first Single audit under both U.S. generally accepted auditing standards and under the Uniform Guidance. After it was understood that the Federal expenditure threshold for a Single Audit had been exceeded, CAFF began preparing for this initial Single audit, which included converting its financial statements to a GAAP basis and completing the annual close. Recommendation: Once all delinquent Single Audits have been completed in the near future, we recommend that CAFF maintain accurate grant reporting within QuickBooks to ascertain, on a timely basis, if the Single audit threshold has been reached. Status: See Corrective Action Plan on page 35. CAFF transitioned its accounting close to an outside CPA firm to close its books and prepare for a Single Audit during fiscal 2024. The first delinquent audit (GAAS only) was completed in June 2025, and the 2022 single audit was completed in December 2025.

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS – significant deficiency. Criteria: The books and records support the preparation of the Schedule of Expenditures of Federal Awards. Condition: During fiscal 2022, a complete income statement (including allocations) for each cost reimbursement Federal award was not available to compile the Schedule of Expenditures of Federal Awards (SEFA) on a timely basis. During 2025, an outside CPA firm was contracted to complete the 2021 and 2022 accounting close and prepare for the required 2022 Single audit (including reconstructing all Federal expenditures in the books and records to accurately prepare the SEFA). Questioned Cost: None Effect: Without full grant accounting within QuickBooks, the organization is not able to determine when a Single Audit is required and/or prepare an accurate SEFA on a timely basis. Cause: The individual grant income statements should include full GAAP accounting including prepaid expenses, accrued expenses, unbilled receivables, allocated indirect costs, and program income. The surplus/deficit should be nearly zero for each cost reimbursement contract. Recommendation: It is a best practice to utilize a grant bridging report (based on grant income statements) to understand any differences between grant revenues and expenses (for cost reimbursement contracts), as well as progress against grant budgets. Expenditures of federal awards should agree to each contract income statement. Status: See the CAFF’s Corrective Action Plan on page 35.