2024-001:Suspension and Debarment
Finding Type: Material Weakness in Internal Controls over Compliance and Compliance
Federal Program Title and AL Number: The Emergency Food Assistance Program (TEFAP) Commodity Credit Corporation Eligible Recipient Funds (10.187)
Criteria: Per Title 2 CFR § 180.300, non-federal entities that enter into a covered transaction with an entity at a lower tier are required to verify that the entity is not suspended or debarred or otherwise excluded from participating in the transaction. Covered transactions include all non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount.
Condition and context: As part of our suspension and debarment testing, and in order to determine compliance with the requirements, we verified that the debarment verification check for subrecipient agencies were performed prior to entering into agreements with these agencies. For 24 out of 25 non-statistical samples, the verification check was performed subsequent to when the Food Bank entered into the contract with the agency. None of the agencies selected were suspended or debarred.
Cause: The Food Bank did not have controls in place to ensure the debarment verifications were performed when entering into agreements with agencies.
Effect: The Food Bank was not able to demonstrate compliance with 2 CFR § 180.300.
Questioned Costs: None.
Repeat finding: No.
Recommendation: We recommend that the Food Bank implement controls to ensure verification checks are performed prior to entering into agreements with agencies.
Management Response and Planned Corrective Action:
The Los Angeles Regional Food Bank is a non-federal entity that enters into transactions with its Agency Partners covered under Title 2 CFR § 180.300. This section requires us to verify that our Agency Partners are not suspended or debarred or otherwise excluded from participating in transactions covered by this section.
We will modify the Eligible Recipient Agency (ERA) Agreement with Sub-Distributing Agency (SDA) USDA TEFAP Agency Agreement template that the Food Bank utilizes for onboarding all new Agency Partners to include language requiring the Agency Partner to self-certify that they are neither suspended, nor debarred, nor otherwise excluded from participating in Federal Programs covered under Title 2 CFR § 180.300.
Additionally, on a quarterly basis, the Agency Relations Department will perform the federal suspension and debarment check on all of the Agency Partners. If any Agency Partner is on the federal suspension and debarment list, the Agency Partner will be suspended by the Food Bank immediately.
The Director of Compliance and Administration will oversee the modification of the Memorandum of the TEFAP Agency Agreement.
We will complete these corrective actions on or before June 15, 2025.
Individuals responsible for corrective action:
Elizabeth Cervantes – Sr. Director of Product Acquisition and Agency Relations 323.974.0073
Steven Meisberger – Chief Financial Officer 323.318.0319