Finding Text
Finding 2024‐002–Allowability—MATERIAL WEAKNESS IN INTERNAL CONTROLS OVER COMPLIANCE AND NON-COMPLIANCE Federal Program: The Food Distribution Cluster Assistance Listing Number: 10.565, 10.568 and 10.569 Year(s): 2024 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, Food Link Food Bank, and CAPK Food Bank. Criteria—In accordance with 2 CFR 200.502(g), Federal non-cash assistance food commodities received as part of a Federal award to carry out a Federal program must be valued at fair market value at the time of receipt or the assessed value provided by the Federal agency and must be included in determining Federal awards expended under this part. Condition and Context—We selected 60 food commodity delivery receipts to sub-recipients (Sub-ERAs) for testing of the control related to food distributed to Sub-ERAs at the Division’s Modesto Corps; 45 selections did not have evidence of review, indicating a gap in the related internal controls. The delivery receipt includes the quantity of the food commodities distributed to Sub-ERAs. The monetary value of those food commodities is included in the Schedule. We also made 4 sign-in-sheet selections related to the monthly control over food distributed directly to individuals at the Modesto Corps. The sign-in sheets contained the quantity of food commodities that were distributed which were then used to populate the Schedule. The 4 sign-in-sheet selections did not have evidence of review and do not have evidence of review in accordance with the process flow of the warehouse. The quantity of food commodity is measured in the number of food boxes with each weighing 50 pounds and the monetary value of those food commodities is then included in the Schedule. Further, of the 60 selections tested for allowable costs, one of the selections related to food distributed to individuals at the Modesto Corps had a difference of 45 boxes distributed between what was recorded on the Schedule and what was reflected on the underlying support. This error is a result of lack of reviews being performed over the amount of food distributed directly to individuals at the Modesto Corps. Cause—Management was unaware that evidence pertaining to the review of the distribution of the food commodity items was required to be maintained, which further resulted in the differences in the boxes distributed. Effect—There could be discrepancies between the amount of actual food commodities distributed and the amount recorded on the Schedule, which could lead to incorrect information communicated to the grantor and the eventual cessation of grant funding. Questioned Costs—None. Repeat Finding from Prior Year—Yes. Recommendation— We recommend management take steps to ensure that proper review is performed and evidence of review including adequate documentation of the weight of food items distributed, is maintained. View of Responsible Officials—See Corrective Action Plan.