Finding Text
Finding 2024-003—Eligibility—MATERIAL WEAKNESS IN INTERNAL CONTROLS OVER COMPLIANCE AND MATERIAL 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 the Code of Federal Regulations (7 CFR sections 247.4, 247.7(a), 251.3(d), and 251.5(a)), 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. 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—To test the eligibility of individual recipients, we made a total of 60 selections of individuals who received food commodities from distribution sites that maintained self-declaration forms. Of the 60 selections, there was no evidence that 9 of the individuals signed the self-declaration form. Additionally, the Division managed distribution sites that collectively distributed $1,862,618 of food commodities and did not require or maintain self-declaration forms for the participants. Cause—Management at certain distributions sites was unaware of the grant requirements requiring individuals to self-certify their eligibility and maintain such evidence. Effect—Ineligible individual participants could receive grant funded food commodities instead of eligible participants. Questioned Costs—$1,862,618. Repeat Finding from Prior Year—Yes. Recommendation—We recommend management take steps to ensure the distribution sites require participants to self-certify that they meet the grant eligibility requirements and to maintain such evidence. View of Responsible Officials—See Corrective Action Plan.