Finding Text
Finding 2025-002: Special Tests and Provisions – Accountability for USDA Foods – Significant Deficiency in Controls over Compliance and Noncompliance Federal Program: Food Distribution Cluster Year(s): 2025 Federal Agency: U.S. Department of Agriculture (USDA), Food, and Nutrition Services Contract - D-125, The Salvation Army, Reno Pass-Through Entity: Nevada Department of Agriculture Criteria – Agencies must conduct an annual physical inventory of all storage facilities used by the distributing agency or by a sub distributing agency. Such inventory must be reconciled annually with the storage facility’s inventory records and maintained on file by the agency that contracted with or maintained the storage facility. The Del Oro Reno Division (the Division) is required to submit monthly inventory reports of all The Emergency Food Assistance Program (TEFAP) USDA donated foods on hand at their own or contracted facility to the Contracted Regional Agency monthly. The report shall indicate for each TEFAP UDSA donated food item: the commodity description, inventory on hand, inventory received for the month, total available for the month, total distributed, total delivered to another agency, inventory adjustments and ending inventory for the month. Condition – We selected 4 of the 12 monthly inventory reports to test the Division’s inventory process. We vouched the inventory quantity listed on the reports to delivery reports. Inventory was counted monthly and inventory reports were submitted to the grantor as required. However, there was no evidence of review for 2 of the 4 inventory reports selected for testing. Furthermore, there were discrepancies in the April and September inventory reports, whereby the inventory reports understated the quantity by 20 cases and 1 case, respectively, based on our review of the corresponding delivery reports. Cause – The Division did not maintain documentation of their review of the inventory reports. Further, the review control over the inventory reports was not detailed and precise enough to detect the above errors. Effect – As a result of a lack of proper review, the Division had discrepancies in the inventory reporting process. Repeat Finding – Yes. Recommendation – We recommend the Division implement a review process to ensure the accuracy of the inventory management and reporting process. Views of the responsible officials – See Corrective Action Plan.