Finding Text
Information on the Federal Program: Assistance Listing Number 10.568—Food Distribution Cluster; Emergency Food Assistance Program (Food Commodities). Pass-Through Entity: Los Angeles Regional Foodbank. Compliance Requirements: Special Test and Provision. Type of Finding: Material Noncompliance.
Criteria: The Compliance Supplement for the Food Distribution Cluster requires recipient organizations to maintain accurate, timely records of USDA Foods activity, including receipts, distributions (usage), and losses. Records must reflect correct quantities, proper periods, and supporting documentation for federal commodities. Additionally, Uniform Guidance 2 CFR § 200.302 mandates that non-federal entities maintain complete and accurate financial and programmatic records to ensure accountability for federal funds and assets.
Condition: During our testing, we found that NVCS recorded all TEFAP distributions as a single year-end transaction instead of recording distributions as they occurred. Consequently, detailed, contemporaneous records of usage or distributions were not available, preventing verification of the accuracy, timing, and proper support of federal food distributions during the audit period.
Cause: NVCS misunderstood the requirement to record USDA Foods usage and distributions throughout the year, believing a year-end summary was sufficient. Furthermore, NVCS lacked written procedures and internal controls to ensure timely and compliant documentation of commodity distributions.
Effect or Potential Effect: Without detailed records of distributions throughout the year, NVCS cannot demonstrate compliance with federal requirements. This increases the risk of incorrect quantities, misreporting periods, or distributions to ineligible recipients. It may also result in questioned costs or affect NVCS’s eligibility to continue administering the program.
Questioned Costs: None
Context: NVCS recorded only one summary distribution transaction for the year ended June 30, 2024, representing 100% of USDA Foods activity. No detailed records were maintained, preventing sample testing and indicating a systemic control deficiency.
Repeat Finding: No — This is NVCS's first Single Audit.
Recommendation: We recommend NVCS establish procedures to record USDA Foods distributions at the time they occur, documenting quantities, dates, recipient agencies (if applicable), and supporting evidence. Staff should be trained on proper recordkeeping requirements, and management should implement periodic reviews to ensure accuracy and timeliness.
Views of Responsible Officials and Planned Corrective Actions: Management concurs with the finding and will revise procedures to ensure detailed, timely recording of USDA Foods distributions. Staff will receive training on documentation requirements, and management will implement periodic compliance reviews. These corrective actions are expected to be completed by March 1, 2025.