FAC Explorer

Audit 51248

FY End
2022-09-30
Total Expended
$2.51M
Findings
4
Programs
5
Organization: North Country Food Bank, Inc. (MN)
Year: 2022 Accepted: 2023-03-03
Auditor: Brady Martz & Associates PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
46044 2022-002 Significant Deficiency - ABH
46045 2022-003 Significant Deficiency - I
622486 2022-002 Significant Deficiency - ABH
622487 2022-003 Significant Deficiency - I

Programs

ALN Program Spent Major Findings
10.569 Emergency Food Assistance Program (food Commodities) $1.37M Yes 0
21.027 Coronavirus State and Local Fiscal Recovery Funds $475,228 Yes 2
10.565 Commodity Supplemental Food Program $121,801 Yes 0
10.568 Emergency Food Assistance Program (administrative Costs) $89,957 Yes 0
10.576 Senior Farmers Market Nutrition Program $698 - 0

Contacts

Name Title Type
CHHTHS93MFR3 Susie Novak Boelter Auditee
2183997357 Ashley Engel Auditor
No contacts on file

Notes to SEFA

Title: BASIS OF PRESENTATION Accounting Policies: Expenditures reported on the accompanying Schedule of Expenditures of Federal Awards (the Schedule) are reported on the accrual basis of accounting. Such expenditures are recognized following the applicable cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The Schedule includes the federal grant activity of North Country Food Bank, Inc. underprograms of the federal government for the year ended September 30, 2022. The information inthe Schedule is presented in accordance with the requirements of Title 2 U.S. Code of FederalRegulations Part 200, Uniform Administrative Requirements, Cost Principles, and AuditRequirements for Federal Awards (Uniform Guidance). Because the Schedule presents only aselected portion of the operations of North Country Food Bank, Inc., it is not intended to anddoes not present the financial position, changes in net assets or cash flows of North CountryFood Bank, Inc. The amounts reported on the Schedule have been reconciled to and are inagreement with amounts recorded in the accounting records from which the financial statementshave been reported.
Title: SUBRECIPIENTS Accounting Policies: Expenditures reported on the accompanying Schedule of Expenditures of Federal Awards (the Schedule) are reported on the accrual basis of accounting. Such expenditures are recognized following the applicable cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The Organization passes certain federal awards received from the State of Minnesota to othernot-for-profit agencies (subrecipients). The Organization reports expenditures of federal awardsto subrecipients when incurred using the principles under the accrual basis of accounting. As asubrecipient, the Organization has certain compliance responsibilities, such as monitoring itssubrecipients to help assure they use the subawards as authorized by laws, regulations, and theprovisions of contracts or grant agreements, and that subrecipients achieve the awardsperformance goals.

Finding Details

Finding 2022-002
2022-002 (Significant Deficiency) ? Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance Federal Program: AL 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria: Per Uniform Guidance 2 CFR sections 200.308, 200.309 and 200.403(h), a non-federal entity may charge only allowable costs incurred during the federal award?s period of performance or grant period. Expenses incurred before the grant period can only be charged to the grant if the passthrough entity authorizes those pre-award costs. Condition: The grant period for this grant award began in March 2022. The Organization charged a portion of expenses incurred from October 2021 to February 2022 to this grant. Cause: The Organization failed to consider the grant period start date in their allocation of distribution costs to this grant. Effect: The Organization charged expenses incurred before the grant?s period of performance, which makes these expenses unallowable for this grant. Context: Most of the expenses charged to this federal award was for food purchases incurred during the grant period. Only 7% of the expenses charged were for distribution costs. The Organization followed their regular process for allocating distribution costs to grants using the costs incurred during their fiscal year of October 1, 2021 to September 2022 as their population of total expenses, failing to consider that this grant award period only began in March 2022. However, the Organization was only able to charge a small amount of this allocated distribution costs as most of the grant was reserved for food purchases. The Organization did have sufficient eligible expenses incurred during the grant period. Questioned Costs: None. Repeat Finding: No Recommendation: The Organization should review their policies and procedures for allocating expenses to grants and only allocate expenses incurred during the grant period. View of Responsible Officials: Management agrees with the recommendation and will review their procedures for allocating expenses to grants to ensure only expenses incurred during the grant period are charged to grants.
Finding 2022-003
2022-003 (Significant Deficiency) ? Suspension and Debarment Federal Program: AL 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria: Per Uniform Guidance 2 CFR section 180.220, non-federal entities are prohibited from contracting with parties that are suspended or debarred under covered transactions. ?Covered transactions? include contracts for goods or services that are expected to equal or exceed $25,000. Condition: The Organization did not check for suspension and debarment before making purchases that equaled or exceeded $25,000. Cause: The Organization was not aware of this requirement to check for suspension and debarment. Effect: The Organization could have made purchases from vendors that are suspended and debarred. Context: The Organization made several food purchases during the year that exceeded $25,000, but did not check for suspension and debarment before making the purchase as they weren?t aware of this requirement. Questioned Costs: None. Repeat Finding: No Recommendation: The Organization should review their policies and procedures to ensure that suspension and debarment is checked before entering into any contracts/purchases that are expected to equal or exceed $25,000. View of Responsible Officials: Management agrees with the recommendation and will ensure that suspension and debarment is checked before entering into any contracts/purchases that are expected to equal or exceed $25,000.
Finding 2022-002
2022-002 (Significant Deficiency) ? Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance Federal Program: AL 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria: Per Uniform Guidance 2 CFR sections 200.308, 200.309 and 200.403(h), a non-federal entity may charge only allowable costs incurred during the federal award?s period of performance or grant period. Expenses incurred before the grant period can only be charged to the grant if the passthrough entity authorizes those pre-award costs. Condition: The grant period for this grant award began in March 2022. The Organization charged a portion of expenses incurred from October 2021 to February 2022 to this grant. Cause: The Organization failed to consider the grant period start date in their allocation of distribution costs to this grant. Effect: The Organization charged expenses incurred before the grant?s period of performance, which makes these expenses unallowable for this grant. Context: Most of the expenses charged to this federal award was for food purchases incurred during the grant period. Only 7% of the expenses charged were for distribution costs. The Organization followed their regular process for allocating distribution costs to grants using the costs incurred during their fiscal year of October 1, 2021 to September 2022 as their population of total expenses, failing to consider that this grant award period only began in March 2022. However, the Organization was only able to charge a small amount of this allocated distribution costs as most of the grant was reserved for food purchases. The Organization did have sufficient eligible expenses incurred during the grant period. Questioned Costs: None. Repeat Finding: No Recommendation: The Organization should review their policies and procedures for allocating expenses to grants and only allocate expenses incurred during the grant period. View of Responsible Officials: Management agrees with the recommendation and will review their procedures for allocating expenses to grants to ensure only expenses incurred during the grant period are charged to grants.
Finding 2022-003
2022-003 (Significant Deficiency) ? Suspension and Debarment Federal Program: AL 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria: Per Uniform Guidance 2 CFR section 180.220, non-federal entities are prohibited from contracting with parties that are suspended or debarred under covered transactions. ?Covered transactions? include contracts for goods or services that are expected to equal or exceed $25,000. Condition: The Organization did not check for suspension and debarment before making purchases that equaled or exceeded $25,000. Cause: The Organization was not aware of this requirement to check for suspension and debarment. Effect: The Organization could have made purchases from vendors that are suspended and debarred. Context: The Organization made several food purchases during the year that exceeded $25,000, but did not check for suspension and debarment before making the purchase as they weren?t aware of this requirement. Questioned Costs: None. Repeat Finding: No Recommendation: The Organization should review their policies and procedures to ensure that suspension and debarment is checked before entering into any contracts/purchases that are expected to equal or exceed $25,000. View of Responsible Officials: Management agrees with the recommendation and will ensure that suspension and debarment is checked before entering into any contracts/purchases that are expected to equal or exceed $25,000.