Finding Text
Finding 2025-004 Inadequate System of Internal Controls over Benefit Limitation Type of Finding: Significant Deficiency in Internal Control over Compliance Condition: The Organization is required by the federal grant award to limit eligible client families to a maximum of eleven diapering supply "package" distributions per participating child over the course of the grant agreement period. While the program design includes efforts to control this requirement, the eligibility database lacks the capability to assign or track unique participant identifiers needed to reliably enforce this limit. Additionally, there is no documentation to demonstrate that processes related to benefit limits are periodically reviewed or monitored. Due to the nature of recordkeeping in this area, testing compliance is challenging. Although no instances of noncompliance were identified in the sample tested, the Organization has not implemented an adequate system of internal controls to ensure consistent compliance with this grant criterion. A new system was implemented in December 2025 which improved the deficiencies identified for the remainder of the year. Criteria: According to the federal grant award, eligible client families will receive a maximum of eleven diapering supply "package" distributions for each participating child, over the course of the grant agreement period. The Organization is required to implement a system of internal controls to ensure compliance with this criteria. Cause: This condition results from limitations within the eligibility database system, which lacks both unique participant tracking and comprehensive reporting capabilities necessary to enforce the distribution limit. Combined with the absence of formal review or monitoring procedures, these factors indicate that despite efforts to comply, the Organization has not developed or documented a sufficient internal control system to provide reasonable assurance that this federal requirement is consistently met. Possible of Known Effect: The absence of robust internal controls and reporting functionality increases the risk that families may receive benefits exceeding the maximum allowable amount during the grant period. While no noncompliance was identified during testing, these deficiencies hinder the Organization’s ability to prevent or detect potential violations, which could result in questioned costs. Questioned Costs: There were no questioned costs identified. Repeat Finding: This finding is a repeat from the prior year. The previous finding was 2024-005. Recommendation: We recommend that the Organization improve its internal control framework by implementing methods to assign unique participant identifiers and accurately track diapering supply distributions within the eligibility system. Enhancing reporting capabilities to allow consolidation of activities across all sites and the full grant period would significantly strengthen monitoring and compliance efforts. Additionally, formalizing periodic reviews and documentation of compliance with the benefit limit, along with staff training, will help ensure adherence to federal grant requirements and reduce compliance risks. The changes implemented in December 2025 appear to address the issues identified in this finding. Views of Responsible Officials: The new CRM, Pantry Soft will allow us to monitor and control benefit limitation. While not documented, the President and CEO did periodically review and monitor benefit eligibility and limits. We will begin documenting this procedure