Finding 1158151 (2024-002)

Significant Deficiency 2024-002 Pandemic Relief Activities: Local Food Purchase Agreements with States, Tribes, and Local Governments – Allowable Cost and Cost Principles Information on Federal Program: U.S. Department of Agriculture (Federal Assistance Listing Number 10.182). Criteria: CFR Section 200.302 stipulates that a non-Federal entity must use its own written procedures for determining the allowability of costs in accordance with Subpart E-Cost Principles of this part and the terms and conditions of the Federal award. Statement of Condition: During our discussions with management, we noted that the Organization does not have evidence of review of expenses charged to the grant. Statement of Cause: The Organization did not review compliance requirements related to allowable cost and cost principles outlined in 2 CFR Section 200.302. Statement of Effect: The Organization is not in compliance with 2 CFR Section 200.302. The Organization does not have evidence of review and is therefore not performing required procedures that would be standard for all purchases charged to the program. Questioned Costs: None. Perspective Information: As part of the required allowable cost testing, inquiries are made of the Organization’s management as to any internal control policies that the Organization has. Recommendation: We recommend that the Organization review the requirements of 2 CFR Section 200.302 to follow their internal control policies. Views of responsible officials and planned corrective actions: Think Regeneration, NFP will develop and implement a written procurement policy in accordance with CFR Section 200.302. We will have this in place as soon as possible.