FAC Explorer

Finding 572508 (2024-004)

Material Weakness Repeat Finding
Requirement
B
Questioned Costs
-
Year
2024
Accepted
2025-08-04
Audit: 363656
Organization: Second Harvest Community Foodbank (MO)
Auditor: Uhy LLP

AI Summary

  • Answer: Overhead costs and payroll are incorrectly assigned only to TEFAP.
  • Trend: This misallocation can lead to inaccurate financial reporting and compliance issues.
  • List: Review and adjust cost allocation methods; ensure detailed timesheet support for payroll; implement regular audits of cost distribution.

Finding Text

Overhead costs and payroll are not appropriately allocated amongst the activities of Second Harvest. Instead, costs such as utilities, phone, lawn service, repairs and maintenance and payroll are 100% allocated to TEFAP. Additionally, timesheet support for payroll allocated to the federal program was not maintaind in sufficient detail to support the allocation.

Corrective Action Plan

We agree with the auditor’s comments and the following action will be taken to improve this situation. Second Harvest staff are currently developing an appropriate cost segregation plan which will address direct costs and indirect costs including salary, fringe benefits, and non-salary costs. Through this process a spreadsheet will be developed to better distribute costs appropriately across all federal programs operated by Second Harvest and efforts supported through additional funding sources. This corrective action will be implemented by October 1, 2025.

Categories

Allowable Costs / Cost Principles

Other Findings in this Audit

  • 572506 2024-003
    Material Weakness Repeat
  • 572507 2024-003
    Material Weakness Repeat
  • 572509 2024-005
    Significant Deficiency Repeat
  • 572510 2024-006
    Significant Deficiency Repeat
  • 1148948 2024-003
    Material Weakness Repeat
  • 1148949 2024-003
    Material Weakness Repeat
  • 1148950 2024-004
    Material Weakness Repeat
  • 1148951 2024-005
    Significant Deficiency Repeat
  • 1148952 2024-006
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
10.569 Emergency Food Assistance Program (food Commodities) $429,992
10.182 Pandemic Relief Activities: Local Food Purchase Agreements with States, Tribes, and Local Governments $109,031
10.766 Community Facilities Loans and Grants $79,516
10.558 Child and Adult Care Food Program $70,863
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program $59,854
10.559 Summer Food Service Program for Children $52,906
10.187 The Emergency Food Assistance Program (tefap) Commodity Credit Corporation Eligible Recipient Funds $27,717
14.218 Community Development Block Grants/entitlement Grants $23,750
10.568 Emergency Food Assistance Program (administrative Costs) $14,660