Finding 389871 (2023-001)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2024-03-29

AI Summary

  • Core Issue: The Organization's records for USDA Foods are incomplete and inaccurate, making it impossible to verify inventory.
  • Impacted Requirements: This violates 7 CFR section 250.19, which mandates accurate record-keeping for USDA Foods.
  • Recommended Follow-Up: Implement internal controls for USDA food accounting, conduct annual physical inventories, and reconcile these with existing records.

Finding Text

Criteria: Accurate and complete records must be maintained with respect to the receipt, distribution/use, and inventory of United States Department of Agriculture (USDA) Foods, including end products processed from USDA Foods in the Emergency Food Assistance Program (TEFAP). Failure to maintain records required by 7 CFR section 250.19 is considered prima facie evidence of improper distribution or loss of USDA Foods. Condition: The Organization relies on records received from the pass-through entity for reporting inventory; thus, the Organization's records were such that it could not be determined if they were complete or accurate. Cause: The pass-through entity’s receipts for USDA food products are inconsistently accurate and measure delivered goods on a unitary basis that does not account for cases of multiple items or provide overall weight. The Organization weighs and records all food stuffs that are provided to eligible recipients but is unable to identify which products were provided by TEFAP and those that were directly donated to the Organization. As such, the records used by the Organization could not produce an ending inventory balance for USDA foods. Additionally, there was not an annual inventory process in place. Effect: Incomplete record keeping could lead to improper distribution of USDA foods to ineligible participants. Questioned Costs: Cannot be determined. Context: Not applicable. Recommendation: The Organization should implement appropriate internal controls relating to the accounting for USDA foods, conduct an annual physical inventory and reconcile the physical inventory with inventory records. Management’s Response: Management agrees with the finding and is researching inventory management processes that meets the cost and logistical restrictions of the Organization. The Organization verifies all participants of the food pantry program meet the eligibility requirements as required under TEFAP.

Corrective Action Plan

Corrective Action Planned: Community Action Center of Northfield (CAC) is working with our food sourcing partners to investigate better accounting practices from their end to more accurately facilitate USDA food inventory before the food stuffs are delivered to CAC. Additionally, CAC will investigate cost-efficient models of physical inventory for in-kind donated (free) food. Name(s) of Contact Person(s) Responsible for Corrective Action: Scott Wopata, Executive Director, will be responsible for leading correct actions Anticipated Completion Date: While CAC is hopeful to receive more accurate inventory records from our food sources, this is outside of our control. Additionally, initial research into inventory management systems have proven extremely cost prohibitive as they relate to technology and/or labor, especially related to in-kind donated (free) food. We will pilot manual weekly inventory counts in the 2024/25 fiscal year with full corrective actions to reflect the outcome of those pilot studies.

Categories

Eligibility Equipment & Real Property Management Subrecipient Monitoring Reporting School Nutrition Programs

Other Findings in this Audit

  • 966313 2023-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
10.569 Emergency Food Assistance Program (food Commodities) $534,445
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program $162,906
93.671 Family Violence Prevention and Services/domestic Violence Shelter and Supportive Services $80,691
14.267 Continuum of Care Program $39,170
14.231 Emergency Solutions Grant Program $22,820