FAC Explorer

Finding 28678 (2022-001)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-03-07
Audit: 27986
Organization: Brazos Valley Food Bank, Inc. (TX)
Auditor: Atchley & Associates LLP

AI Summary

  • Core Issue: Inventory records were inaccurate during year-end observations, with all USDA products showing discrepancies.
  • Impacted Requirements: This affects compliance with grant requirements, risking termination of the agreement with the Houston Food Bank.
  • Recommended Follow-Up: Management should reconcile inventory records with physical counts regularly, documenting any differences and updating records accordingly.

Finding Text

Criteria: Inventory records were not accurate during the year end inventory observations. Special Test and Provision is to insure physical inventory of USDA products are reconciled to the inventory records at year end. Condition: During the year end inventory observation, we noted five of five of the USDA products we counted had discrepancies. Cause: Accurate inventory counts were not reflective of the physical inventory, this is due to the reconciliation of the inventory counts to the count sheets during the inventory counting process that did not occur. Effect: Failure to comply with the applicable grant requirements could result in termination of the agreement with the Houston Food Bank. Questioned Costs: This finding did not result in any reportable questioned costs Context: USDA and other inventory products were not accurately reflected in the inventory records. Recommendation: We recommend that management reconcile the inventory records to the physical count and notate if there are differences and update the records after a recount and reconciliation to the inventory records. This process should be performed and documented on an at least annual basis if not more often. Views of the responsible officials and planned corrective actions Current Status: Currently, the Brazos Valley Food Bank (BVFB) completes two full Physical Inventory counts each year ? one at the beginning of the fiscal year in July, and the other at the end of the calendar year in December. Based on a pattern of discrepancies found during last fiscal year end inventory with the auditors, Management agrees that additional measures are need. See Corrective Action Plan that follows.

Corrective Action Plan

Planned Corrective Action: ?BVFB will continue to complete at least two (2) full Physical Inventory Counts each year, at the beginning of the fiscal year in July, and at the end of the calendar year in December. The overall Physical Inventory Process is currently overseen by Ebony Knight, Operations Director, with documented counts completed and documented in pairs of warehouse staff, supervised by BVFB?s Distribution Manager, Tyler Foley. The Operations Director reviews manual counts against current inventory listings, with discrepancies requiring recounts by warehouse staff. Variances are corrected in BVFB?s inventory system by the Operations Director, with assistance from the Finance Team. Variance reports are provided to the Executive Director after each full inventory. oDue Date: Current practice that will continue. ? As BVFB?s inventory becomes more varied and complex, BVFB sees the need for a paid position dedicated to Food Purchase & Inventory at BVFB. A job description is being developed, funds are in the current annual budget and recruitment is to begin. oDue Date: Hire made for this position by June 30, 2023. ?Manual product category inventory checks, with special emphasis on TEFAP products, will be performed monthly. The Operations Director, Ebony Knight, will oversee this process until a Logistics Manager is hired. At the completion of each month, warehouse staff will manually count designated product categories. The Operations Director/Logistics Manager will cross reference manual counts with the Inventory Transaction Report (ITR) run from BVFB?s inventory management system. BVFB?s Operations Director then reconciles any discrepancies in BVFB?s inventory system. oDue Date: Implemented January 2023. ?BVFB?s Distribution Manager, Tyler Foley, provided training to all warehouse staff on specific procedures for 1) accurately reporting damaged/lost product, including required documentation when a discrepancy is identified. Damaged/lost product should be reported to the Logistics Manager (currently being filled by the Operations Director) during the receiving process and to the Distribution Manager during the distribution process. oDue Date: First training occurred 1/17/2023. Subsequent training for new employees or new hires done by the new Logistics Manager will happen as need. ?BVFB has funds to purchase and install a Barcoding Inventory System in its warehouses. Barcoding reduces the risk of human error, which can result in miscalculations, oversights and lost inventory. oDue Date: January 2024 Name of Contact Person: Ebony Knight, Operations Director ebonyk@bvfb.org 979-779-3664, Ext. 108

Categories

Equipment & Real Property Management

Other Findings in this Audit

  • 605120 2022-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
10.569 Emergency Food Assistance Program (food Commodities) $2.97M
14.218 Community Development Block Grants/entitlement Grants $292,673
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program $93,588
97.024 Emergency Food and Shelter National Board Program $10,994
93.898 Cancer Prevention and Control Programs for State, Territorial and Tribal Organizations $359