Finding 529182 (2024-004)

Significant Deficiency
Requirement
B
Questioned Costs
$1
Year
2024
Accepted
2025-03-20
Audit: 347167
Organization: Oregon Food Bank, Inc. (OR)
Auditor: Moss Adams LLP

AI Summary

  • Core Issue: The Organization is inconsistent in requesting, applying, and reporting indirect costs across federal awards and subrecipients.
  • Impacted Requirements: Compliance with 2 CFR §200.414 is not being met, leading to errors in billing and reporting of indirect costs.
  • Recommended Follow-up: Establish clear procedures and training for staff to ensure consistent application of indirect costs and accurate reporting for both the Organization and subrecipients.

Finding Text

Criteria – 2 CFR §200.414 Indirect Costs – Entities must maintain accurate records and apply indirect costs consistently across all federal awards. They must also ensure that subrecipient indirect costs are managed in accordance with federal regulations. Condition/context – Indirect costs are not being requested, applied, billed, or reported consistently by the Organization. Indirect costs are not being applied to subrecipients consistently. We observed numerous errors in the application of indirect costs by the Organization, including: not requesting indirect costs in grant applications, negotiating non-de minimis rates with passthrough agencies after electing a de minimis rate, billing indirect costs in excess of indirect costs awarded in the grant agreement, erroneously including passthrough awards greater than $25,000 per subrecipient in the modified total direct cost base, approving indirect cost rates for subrecipients that did not match the subrecipient's elected de minimis rate, and including subrecipient indirect costs in the section of SF-425 reports reserved for reporting its own indirect costs. Questioned costs – $27,467 Cause/effect – The Organization has decentralized grant controls which are not designed to ensure compliance over indirect costs and consistency of application across all federal awards. Indirect costs in excess of allowable indirect costs were billed to federal awards. Repeat finding – No. Recommendation – The Organization should develop procedures and internal controls to ensure indirect cost rates are requested, applied, billed, and reported consistently across all federal awards using the same rate. The Organization should develop similar procedures to ensure it is awarding and reporting subrecipient indirect costs accurately. The Organization should ensure individuals responsible for these controls are adequately trained.

Corrective Action Plan

Food Distribution Cluster US Department of Agriculture / Oregon Department of Human Services / Farmers Market Fund Federal Assistance Listing Number: 10.565, 10.568, 10.569, 10.182, 10.331 Federal Program Name: Food Distribution Cluster, Local Food Purchase Assistance Cooperative, Gus Schumacher Nutrition Incentive Program OFB’s View on Finding: OFB acknowledges the finding and agrees with the auditors' assessment Responsible Party: Katie Kenton, Interim Co-Director of Finance (Strategic Finance); Nan Wang, Interim Co-Director of Finance (Operational Finance); Starr Yurkewycz, Director of Partnerships and Programs; Nathan Harris, Director of Community Philanthropy; Shannon Oliver, Interim Director of Operations Corrective Action Plan: Finance will assess requirements and establish procedures and internal controls to ensure the consistent application, billing, and reporting of indirect cost rates across all federal awards. This will include collaborating with grant writing staff during the pre-application and pre-award phases to centralize grant preparation and ensure indirect rates are accurately applied in grant proposals and budgets. Multiple dedicated review steps in the grant lifecycle will be developed to both ensure accuracy of the rates charged and address any changes from the Federal Government. Existing strengths, tools, and capacity will be reviewed to support this process, including alignment with subrecipient indirect cost practices. Training will be provided to individuals responsible for these controls to ensure accurate implementation and ongoing compliance. These actions will improve our ability to manage indirect costs effectively and ensure compliance with federal requirements. The anticipated completion date is June 30, 2026.

Categories

Questioned Costs Reporting Subrecipient Monitoring

Other Findings in this Audit

  • 529179 2024-003
    Material Weakness
  • 529180 2024-003
    Material Weakness
  • 529181 2024-003
    Material Weakness
  • 529183 2024-004
    Significant Deficiency
  • 529184 2024-004
    Significant Deficiency
  • 529185 2024-004
    Significant Deficiency
  • 529186 2024-004
    Significant Deficiency
  • 529187 2024-005
    Significant Deficiency Repeat
  • 529188 2024-005
    Significant Deficiency Repeat
  • 529189 2024-005
    Significant Deficiency Repeat
  • 529190 2024-005
    Significant Deficiency Repeat
  • 529191 2024-005
    Significant Deficiency Repeat
  • 1105621 2024-003
    Material Weakness
  • 1105622 2024-003
    Material Weakness
  • 1105623 2024-003
    Material Weakness
  • 1105624 2024-004
    Significant Deficiency
  • 1105625 2024-004
    Significant Deficiency
  • 1105626 2024-004
    Significant Deficiency
  • 1105627 2024-004
    Significant Deficiency
  • 1105628 2024-004
    Significant Deficiency
  • 1105629 2024-005
    Significant Deficiency Repeat
  • 1105630 2024-005
    Significant Deficiency Repeat
  • 1105631 2024-005
    Significant Deficiency Repeat
  • 1105632 2024-005
    Significant Deficiency Repeat
  • 1105633 2024-005
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
10.569 Emergency Food Assistance Program (food Commodities) $24.91M
10.568 Emergency Food Assistance Program (administrative Costs) $3.05M
10.182 Pandemic Relief Activities: Local Food Purchase Agreements with States, Tribes, and Local Governments $2.44M
10.331 Gus Schumacher Nutrition Incentive Program $1.21M
10.187 The Emergency Food Assistance Program (tefap) Commodity Credit Corporation Eligible Recipient Funds $665,503
10.565 Commodity Supplemental Food Program $495,889
21.027 Coronavirus State and Local Fiscal Recovery Funds $177,939
97.024 Emergency Food and Shelter National Board Program $175,055
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program $129,411
10.177 Regional Food System Partnerships $55,344