FAC Explorer

Finding 565077 (2024-001)

- Repeat Finding
Requirement
I
Questioned Costs
-
Year
2024
Accepted
2025-06-17
Audit: 359015
Organization: Southeast Texas Food Bank, Inc. (TX)
Auditor: Wathen Deshong & Juncker LLP

AI Summary

  • Core Issue: The Food Bank did not follow required procurement methods for purchases over the simplified acquisition threshold, violating state and federal regulations.
  • Impacted Requirements: Non-compliance with 2 CFR 200 procurement standards and Texas Department of Agriculture guidelines.
  • Recommended Follow-Up: Management should ensure proper training and assignment of responsibilities for procurement to meet federal funding requirements, prioritizing the more restrictive guidelines if they differ.

Finding Text

2024‐001 – TEFAP Reach and Resiliency Grant (ALN 10.568) United States Department of Agriculture, Passed through the Texas Department of Agriculture. Compliance – Office of Management and Budget Guidance for Grants and Agreements Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards 2 Code Federal Regulations (CFR) Part 200 Procurement Standards (2 CFR 200). Criteria: The Food Bank is required to adhere to procurement guidelines reflected in the applicable state and federal regulations and conform to 2 CFR 200 procurement requirements. Condition and Context: The Food Bank did not follow Texas Department of Agriculture’s or the 2 CFR 200 required Methods of Procurement. Deviations include lack of adherence to required Formal Procurement Methods for purchases over the simplified acquisition threshold (SAT) (advertisement, sealed bids, etc.), specifically, competitive bidding for purchases over the SAT threshold. Cause: The Food Bank experienced turnover in key management positions. Sufficient training and transition of responsibilities, procurement policies and procedures applicable to compliance with 2 CFR 200 was not conducted until after the Organization entered into the contract with the vendor. Effect: The entity did not follow state and federal procurement requirements, consequently, purchases were made during 2024 that were not in compliance with state and federal requirements. Repeat Finding: See prior year finding 2023-001. Recommendation: Management should take steps to ensure that the Food Bank identifies, assigns responsibility, and adheres to procurement requirements for federal funding. If procurement requirements for a pass through entity and grantor differ, the more restrictive procurement requirements should be followed. View of Responsible Party: Management concurs with recommendation. See corrective action plan.

Corrective Action Plan

2024-001-TEFAP- Rach and Resiliency Grant {ALN 10.568) United States Department of Agriculture, Passed through the Texas Department of Agriculture. Compliance - Office of Management and Budget Guidance for Grants and Agreements Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards 2 Code Federal Regulations (CFR) Part 200 Procurement Standards (2 CFR 200) Criteria - The Food Bank is required to adhere to procurement guidelines reflected in the applicable state and federal regulations and conform to 2 CFR 200 procurement requirements. Conditions and Context : The Food Bank did not follow Texas Department of Agriculture's or the 2 CFR 200 required Methods of Procurement. Deviations include lack of adherence to required Formal Procurement Methods for purchases over thee simplified acquisition threshold (SAT) (advertisement, sealed bids, etc.) specifically , competitive bidding for purchases over the SAT threshold. Repeat Finding: 2023-001 Recommendation : Management should take steps to ensure that the Food Bank identifies, assigns responsibility, and adheres to procurement requirements for federal funding. If procurement requirements for a pass through entity and grantor differ, the more restrictive procurement requirement should be followed. CORRECTIVE ACTIONS : All Director level Management will go to the Houston Food Bank for training on RFA's, advertisement, sealed bid process, and federal guideline procurement procedures by September 2025. This training will be documented and placed in each personnel file. ALL purchases being made for reimbursement through Federal funding or being handled through a pass through process with grantor will be reviewed and signed off for approval by the President/CEO and the CFO of the Southeast Texas Food Bank. The President/CEO will ensure that proper bids and process have been taken and reviewed following the required guidelines set forth by the Food Bank policy updated May 2024, Federal guidelines, and/or grantor guidelines. The more restrictive policy either Food Bank, Federal entity, or grantor will be followed prior to purchase. If in the event that RFA's were sent out to three or more vendors with no response by deadline, these will be documented as such.

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

  • 565078 2024-002
    Material Weakness Repeat
  • 1141519 2024-001
    - Repeat
  • 1141520 2024-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
10.569 Emergency Food Assistance Program (food Commodities) $3.28M
10.187 The Emergency Food Assistance Program (tefap) Commodity Credit Corporation Eligible Recipient Funds $1.60M
10.565 Commodity Supplemental Food Program $1.06M
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program $107,626
10.568 Emergency Food Assistance Program (administrative Costs) $77,653