Finding Text
FINDING 2025-002 Significant Deficiency in Internal Controls over Compliance and Noncompliance – Special Tests and Provisions – Accountability for USDA Foods Federal Agency: Department of Agriculture Pass through Grantor: Multiple Federal Program(s): Food Distribution Cluster Assistance Listing Number(s): 10.565/10.569 Criteria: As per the recordkeeping requirements at 2 CFR 250.19 the Division is to ensure appropriate accounting is maintained for USDA Foods, an annual physical inventory is taken, and the physical inventory is reconciled with inventory records. Condition/Context: The Division did not consistently retain documentation to support that the inventory count had been performed or reviewed. From the 30 inventory count results sampled, 8 count results did not indicate evidence of review and in 4 instances the Division was not able to provide the monthly inventory report. Cause: The Division did not retain documentation to support whether the inventory report had been performed nor was documentation retained to support that the inventory report was reviewed and that the ending inventory was accurate. Effect: Due to the lack of documentation and review, inventory losses could go undetected if the recordkeeping process is unmonitored. Questioned Costs: None. Recommendation: We recommend that the Division enhance their control procedures such that the appropriate individuals are aware that review of reports should be documented with either electronic or manual signature and that such reports should be retained. Repeat Finding: Yes. See 2024-003 in prior year report. Views of Responsible Officials: See Corrective Action Plan.