Finding Text
U.S. Department of Agriculture Pass-through Entity: South Carolina Department of Agriculture Program Name: Food Distribution Cluster Federal Assistance Listing Number: 10.568-CL Material Weakness and Non-Material Noncompliance – Eligibility Finding 2023-004 Criteria: A recipient agency 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. These written agreements are referred to as “Partner Agency agreements”. Additionally, before any food is distributed to a partner agency, the Organization should review the agency’s eligibility by signing the “Food Distribution agreement”. Condition: The Organization did not have signed Partner Agency or Food Distribution agreements with partner agencies during the year ended June 30, 2023 for all partner agencies subjected to testing procedures. Cause: The Organization experienced significant turnover in the finance department during the year, and therefore, the Organization was unable to implement adequate internal controls over the partner agency and food distribution agreement tracking and retention process. Additionally, there was a flood that occurred during the year ended June 30, 2023, whereby documentation was lost and had not been backed up. Effect: The Organization could provide federal food commodities to agencies that are not eligible. Questioned Costs: No questioned costs reported. Context: There were 26 instances out of 42 samples tested where a signed Partner Agency agreement was obtained; however, it was not signed within the year ended June 30, 2023. Additionally, there was one instance out of 42 samples selected where a signed Partner Agency agreement was not obtained. There were 10 instances of 42 samples tested where a Food Distribution agreement was obtained; however, it was not signed within the year ended June 30, 2023. Additionally, there were two instances out of 42 samples tested where a signed Food Distribution agreement was not obtained. Identification as a Repeat Finding: 2022-003 Auditor’s recommendation: All required documentation should be tracked, maintained and properly backed up to prevent loss due to staff turnover or unexpected calamities. Views of Responsible Officials: See Corrective Action Plan.