Finding Text
U.S. Department of Agriculture
Federal Financial Assistance Listing # 10.568 All Awards
Federal Financial Assistance Listing # 10.569 All Awards
Food Distribution Cluster
Eligibility
Significant Deficiency in Internal Control over Compliance and Noncompliance
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. This includes a process to ensure proper completion of all tracking forms and documentation, including documented reviews in relation to eligibility.
Condition – During our review of the eligibility determinations, it was identified that there were various instances where applications or other eligibility determinations and reviews were not completed timely or accurately. The files were missing the documented processes or were completed after the prior form’s expiration dates.
Cause – Due to oversight by management, all forms were not completed and documented within participant files. This was largely due to differences in fiscal years, calendar years, and terms of the applications and certifications not being appropriately considered when completing and monitoring the various eligibility documents.
Effect – The Organization’s internal control process was not appropriately enforced and monitored, resulting in lack of timely documentation of eligibility determination. However, it is noted that the agencies were subsequently determined to be eligible for the program.
Questioned Costs – $249,549.
Context/Sampling – A nonstatistical sample of 31 participating agencies within TEFAP out of a population of 157 were selected for eligibility testing. 4 out of the 31 eligibility determinations tested had an error, with 3 of those resulting in questioned costs, as reported above.
Repeat Finding from Prior Year(s) – Yes, Finding 2023-005.
Recommendation – Management should review internal control procedures to ensure all eligibility determination reviews are documented and retained in the file and consideration is appropriately given to fiscal year, calendar year, and application terms.
Views of Responsible Officials – Management agrees with the finding.