Finding Text
Finding 2023‐007—Special Test-Accountability for USDA Foods—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—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)). Condition and Context—There was no documentation of inventory reports or evidence that inventory counts were performed for the period under audit. Cause—Management did not have a control in place to ensure that the retention of the documentation evidencing the performance of inventory counts was required. Effect—Failure to maintain records required by 7 CFR section 250.19 could result in the Entity being held liable for the costs of the related food commodities. Questioned Cost—Cannot be determined due to the lack of inventory reports. Repeat Finding from Prior Year—Yes. Recommendation—We recommend management implements a control to ensure the documentation related to inventory counts are maintained. View of Responsible Officials—See Corrective Action Plan.