FAC Explorer

Finding 21207 (2022-002)

Significant Deficiency
Requirement
AB
Questioned Costs
-
Year
2022
Accepted
2022-11-30
Audit: 23414
Organization: Feeding South Dakota (SD)
Auditor: Eide Bailly LLP

AI Summary

  • Core Issue: There was a significant deficiency in internal controls over compliance, leading to discrepancies in food distribution data and improper exclusion of personnel costs.
  • Impacted Requirements: Compliance with 2 CFR 200.303(a) was not met, as effective internal controls were lacking, increasing the risk of charging disallowed costs.
  • Recommended Follow-Up: Management should enhance procedures to ensure monthly draw requests align with supporting inventory and personnel reports.

Finding Text

2022-002 Department of Agriculture Passed through State of South Dakota Department of Education Federal Financial Assistance Listing / CFDA #10.568, #10.569; 2021G-670, 7/1/2021 ? 6/30/2022 Food Distribution Cluster Activities Allowed and Allowable Costs Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: Emergency Food Assistance Program (TEFAP) pounds distributed to pass-through agencies, which drives the calculation of monthly indirect costs, didn?t agree to underlying inventory reports for nine of twelve months. Additionally, TEFAP monthly draw requests improperly excluded Pierre personnel costs. Cause: There was a lapse in oversight of the internal control process ensuring monthly draw requests reconciled to supporting inventory and personnel reports. Effect: The Organization?s controls did not detect nor correct the errors identified, increasing the likelihood the Organization could charge disallowed costs to the federal award. Questioned Costs: No questioned costs over $25,000. Context: A non-statistical sample of 2 out of 12 months were selected for testing, in which, all food distribution costs incurred were reviewed, accounting for $96,085 of $541,492 total eligible payroll and non-payroll costs of which reimbursement was limited to $438,942. Additionally, distribution pounds for all 12 months claimed on monthly draw requests, used to drive the indirect cost calculation, were traced back to distribution pounds per supporting inventory reports. Repeat Finding from Prior Year: No Recommendation: We recommend that management review procedures and control processes to ensure monthly draw requests reconcile to supporting inventory and personnel reports. View of Responsible Officials: Management is in agreement.

Categories

Internal Control / Segregation of Duties Allowable Costs / Cost Principles Cash Management Significant Deficiency Equipment & Real Property Management

Other Findings in this Audit

  • 21197 2022-002
    Significant Deficiency
  • 21198 2022-002
    Significant Deficiency
  • 21199 2022-002
    Significant Deficiency
  • 21200 2022-002
    Significant Deficiency
  • 21201 2022-002
    Significant Deficiency
  • 21202 2022-003
    Significant Deficiency
  • 21203 2022-002
    Significant Deficiency
  • 21204 2022-003
    Significant Deficiency
  • 21205 2022-002
    Significant Deficiency
  • 21206 2022-003
    Significant Deficiency
  • 21208 2022-003
    Significant Deficiency
  • 597639 2022-002
    Significant Deficiency
  • 597640 2022-002
    Significant Deficiency
  • 597641 2022-002
    Significant Deficiency
  • 597642 2022-002
    Significant Deficiency
  • 597643 2022-002
    Significant Deficiency
  • 597644 2022-003
    Significant Deficiency
  • 597645 2022-002
    Significant Deficiency
  • 597646 2022-003
    Significant Deficiency
  • 597647 2022-002
    Significant Deficiency
  • 597648 2022-003
    Significant Deficiency
  • 597649 2022-002
    Significant Deficiency
  • 597650 2022-003
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
10.565 Commodity Supplemental Food Program $967,264
10.569 Emergency Food Assistance Program (food Commodities) $633,896
10.568 Emergency Food Assistance Program (administrative Costs) $58,924
97.024 Emergency Food and Shelter National Board Program $45,244
10.178 Trade Mitigation Program Eligible Recipient Agency Operational Funds (a) $1,349