Finding Text
Program: Child and Adult Care Food Program
Assistance Listing Number: 10.558
Federal Agency: U.S. Department of Agriculture
Pass-Through Grantor: New York State Department of Health
Award Identification: 03256, 03257 Year 2022
Criteria: Internal Controls Over Activities Allowed and Allowable Costs; Internal Controls Over Cash Management– The organization should have procedures in place to ensure that grant-related activity regarding activities allowed, allowable costs, and cash management is supported by applicable accounting or performance records that is reviewed and approved by an authorized member of management. 2 CFR Section 200 Subpart E
Condition: During the course of our audit procedures performed on activities allowed, allowable costs, and cash management, it was noted that evidence of review and approval could not be produced.
Questioned costs: None
Context: We tested a sample of four out of 24 claims for reimbursement, as well as related payments made to subrecipients. For three of the four selections related to activities allowed and allowable costs, and two of the four selections related to cash management, evidence of review and approval by an appropriate member of management could not be provided. The sample was not and was not intended to be statistically valid.
Effect: We were unable to verify compliance with requirements of internal controls over compliance related to activities allowed, allowable costs, or cash management.
Cause: The Settlement did not have adequate controls and procedures in place to ensure proper review and approval took place related to the compliance requirements.
Repeat finding: This is a repeat finding (2021-008).
Recommendation: We recommend that the organization strengthen internal controls surrounding the review and approval of claims prior to submission and payments to subrecipients prior to payment by implementing and documenting formal approval on all supporting documentation.
Views of responsible officials and planned corrective actions: The Settlement agrees with the finding.
The review and approval process were improved in FY23 by assigning a junior accountant to review and collect the claim information from each site, and then having the Grants and Claims Manager review the reconciliation and submit the invoice to CACFP. In the absence of the Grants and Claims Manager, the Assistant Controller reviews and approves the reconciliation. Implementation began July 2022.