Finding Text
Federal Agency: U.S. Department of Agriculture
Federal Program Name: State Administrative Matching Grants for the Supplemental Nutrition
Assistance Program and Food Insecurity Nutrition Incentive Grants Program
Assistance Listing Number: 10.561 and 10331
Pass-through Agency: The Pennsylvania State University and National Institute of Food and Agriculture
Pass-through Number: S001650-COP-TFT; 2019-70030-30412; 2020-70030-33186;
2021-70034-34987; 2021-70034-35361
Award Period: October 1, 2021 - September 30, 2022; September 1, 2019 - August 31, 2022;
September 1, 2020 - August 31, 2023; June 15, 2021 - June 14, 2024; August 1, 2021 - July 31, 2024
Compliance Requirement Affected: Allowable Costs
Type of Finding:
Significant Deficiency in Internal Control over Compliance
Criteria:
3 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Award requires compliance with the provisions of allowable costs and allowable activities. The
Organization should have procedures in place to accurately record and report fringe benefits based on
the actual expenses incurred by the organization and to ensure federal funds are only expended on
allowable costs and allowable activities as dictated in the contract and budget of the program. Proper
documentation should be maintained and reviewed to support all transactions.
Condition:
During our testing, we noted the Organization charges benefits to the programs based on an allocation
calculated at 25% of salaries, but the actual benefits incurred are 20% of total salaries, there is a
discrepancy between the allocated amount and the actual amount. We also noted there was a lack of
supporting documentation for the purchase of program supplies in the amount of $266 charged to the
federal programs.
Questioned Costs:
The Organization allocated fringe benefits to the State Administrative Matching Grants for the
Supplemental Nutrition Assistance Program more than the amount actually incurred by $99,699. The
organization allocated fringe benefits to the Food Insecurity Nutrition Incentive Grants Program more
than the amount actually incurred by $6,558.Context:
During the review of the fringe benefits charged to the State Administrative Matching Grants for the
Supplemental Nutrition Assistance Program and the Food Insecurity Nutrition Incentive Grants
Program, it was noted the amounts allocated for fringe benefits were in excess of the fringe incurred by
the organization by $99,699 and $6,558, respectively. it was also noted management was unable to
locate the supporting documentation for two transactions totaling $266.
Cause:
The Organization allocated fringe to the program based on the percentages included in the contract
budget, as opposed to charging actual expenditures incurred to the grants. Management's internal
controls did not prevent or detect the grants from being overcharged fringe benefits. In addition, the
organization experienced turnover within the finance department and the missing supporting
documentation was likely misfiled and therefore unable to be located.
Effect:
Allocated costs that are not appropriately budgeted and invoiced could result in inaccurate reporting
and misrepresentation of the program's expenses. If the organization does not retain proper supporting
documentation for federal expenditures, it could result in funds being required to returned to the funding
agency.
Repeat Finding:
N/A: Not a repeat finding.
Recommendation:
We recommend The Food Trust review the allocation process for fringe benefits to ensure amounts
reflect a more accurate representation of the actual fringe benefits incurred by the Organization. In
addition, the Food Trust should review its practices to ensure all supporting documentation is retained
for federal purchases.
Viewed of Responsible Officials and Planned Corrective Actions:
Please refer to The Food Trust’s Corrective Action Plan.