Finding 366623 (2023-002)

Finding 2023-002: Accountability for USDA Foods Federal Program: Assistance listing number 10.569, Emergency Food Assistance Program – United States Department of Agriculture, passed through Iowa Department of Human Services Compliance Requirement: Special Tests and Provisions Criteria: A properly designed system of internal control over compliance allows entities to meet those requirements set forth by the federal government. Under the Emergency Food Assistance Program for Food Commodities, the Food Bank is required to maintain accurate and complete records with respect to the receipt, distribution/use, and inventory of USDA Foods, including end products process from USDA Foods in TEFAP. Condition: One of 25 USDA product orders tested was not recorded at the correct unit weight within the inventory system leading to overstatement of receipts and distributions of $9,274. Cause: The products per unit weight had not been updated within the inventory system since 2016. Questioned Costs: The results of this noncompliance did not result in any questioned costs. Potential Effect: Failure to maintain records required by 7 CFR section 250.19 is considered prima facie evidence of improper distribution or loss of USDA Foods, and the agency processor or entity is liable for the value of the food or replacement of the food in kind (7 CFR sections 250.16 and 250.19(a)). Recommendation: The Food Bank should review its procedures to ensure inventory items are weighed at least annually and ensure the system is updated for changes to comply with federal grant requirements. Responsible Official’s Response: Management agrees with the finding and the recommendation.