Finding Text
Finding 2023-006 Eligibility—MATERIAL WEAKNESS IN INTERNAL CONTROLS OVER COMPLIANCE AND MATERIAL NON-COMPLIANCE Federal Program: Emergency Food Assistance Program (Administrative Costs) & The Emergency Food Assistance Program (“TEFAP”) (Food Commodities)—Food Distribution Cluster Assistance Listing Number: 10.565, 10.568 and 10.569 Year(s): 2023 Federal Agency: US Department of Agriculture (USDA) Pass‐Through Agencies: State of CA Department of Social Services, Second Harvest of Silicon Valley, San Francisco Marin Food Bank and CAPK Food Bank. Criteria—In accordance with the Code of Federal Regulations, a sub recipient must be either a public agency or a private entity possessing tax-exempt status under the Internal Revenue Code and must enter into a written agreement with the state agency, or with another recipient agency where permitted, binding it to perform the duties of a recipient agency (7 CFR sections 247.4, 247.7(a), 251.3(d), and 251.5(a)). Individual recipients must sign the Certificate of eligibility form (EFA-7), which is a self-declaration that they meet all the eligibility requirements to participate in in the program. Specifically, the participants are required to self-declare their household’s gross income is at or below the applicable TEFAP income guideline amount and they are prohibited from selling, bartering, or trading food received through this program. Condition and Context—We made a total of 6 selections for the agreements signed with the sub-recipients (“Sub ERAs”), of which 2 Sub ERAs did not have signed agreements. To test the eligibility of individual recipients, we made a total of 60 selections of individuals who received food commodities from warehouses that maintained self-declaration forms. Of the 60 selections, there was no evidence that 7 of the individuals signed the self-declaration form. Additionally, the Division managed distribution sites that collectively distributed approximately $956,107 worth of food commodities that did not require or maintain self-declaration forms for the participants. Cause—Management did not have a control in place to ensure that the agreements with the sub recipients are required to be maintained and certain distributions sites did not have controls in place to implement the grant requirements requiring individuals to self-certify their eligibility. Effect—Ineligible Sub-recipients or individual participants could receive grant funded food commodities, which can lead to the grantor withholding future funding. Questioned Costs—$956,107. Repeat Finding from Prior Year—Yes. Recommendation—We recommend management to implement a control to ensure sub-recipient agreements are retained and the distribution sites maintain sign-in sheets requiring participants to self-certify they meet the grant eligibility requirements. View of Responsible Officials—See Corrective Action Plan.