Finding 1116001 (2024-002)

Condition: The food pantry did not complete the required annual inventory observation for the donated foods for the fiscal year ending June 30, 2024. Criteria: Accurate and complete records must be maintained with respect to the receipt, distribution/use, and inventory of USDA Foods, including end products processed from USDA Foods in TEFAP. Failure to maintain records required by 7 CFR section 250.19 is considered prima facie evidence of improper distribution or loss of USDA Foods, and the agency processor or entity is liable for the value of the food or replacement of the food in kind (7 CFR sections 250.16 and 250.19(a)). Context: The food pantry does not currently have a inventory management system in place. Cause: The Organization was unaware of the requirement to maintain records with respect to the distribtion/use and invenotry of USDA Foods. Effect: Failure to conduct the annual inventory observation may result in inaccurate inventory records, potential loss or misappropriation of donated foods, and non-compliance with federal regulations. This could lead to questioned costs and potential disallowance of federal funds. Recommendations: The food pantry should establish and implement procedures to ensure that an annual physical inventory of donated foods is conducted and documented in accordance with the Uniform Guidance requirements. Training should be provided to relevant staff on the importance of inventory observations and the procedures to be followed. The food pantry should perform periodic reviews to ensure compliance with the established procedures and address any discrepancies promptly. In addition, the Organization should consider a reaosnable estimate for tracking of distribution/use throughout the year. View of Responsible Officials and Planned Corrective Actions: See corrective action plan.