Finding Text
Federal Agency: U.S. Department of Agriculture
Federal Program Name: Food Insecurity Nutrition Incentive Grants Program
Assistance Listing Number: 10.331
Pass-through Agency: National Institute of Food and Agriculture
Pass-through Number: 2021-70034-34987; 2021-70034-35361
Award Period: June 15, 2021 - June 14, 2025; August 1, 2021 - July 31, 2026
Type of Finding:
• Significant Deficiency in Internal Control over Compliance
• Other Matters
Criteria:
2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of cash management. The Organization should have procedures in place to ensure the draw down of federal funds in a timely manner and proper documentation of approval should be maintained to support the draw of funds.
Condition:
During our testing, we noted there was no documentation of review or approval on the calculation for the draw of funding for the program. In addition, draws are not performed in a timely manner after the expenditures are incurred.
Questioned Costs:
None
Context:
During our testing, it was noted there was no documentation of review or approval on the calculations for the draw of funding for the program.
Cause:
The organization had turnover within the finance department and was operating with insufficient resources to allocate responsibilities.
Effect:
We noted no instances of noncompliance with the provisions of allowable costs and activities; however, the lack of approval can increase the risk of fraud or errors going undetected. In addition, when draws are not performed in a timely manner after the expenditures are incurred, it can lead to cash flow issues and potential disruptions in the program's operations. Timely draws are important to ensure that funds are available to cover expenses and maintain the program's financial stability.
Repeat Finding:
Yes - see finding 2023-003.
Recommendation:
We recommend The Food Trust implement a clear approval process for the drawing of federal funding. In addition, it is important to establish a clear process and timeline for performing draws. This may involve regular monitoring of expenditures, timely submission of draw requests, and efficient processing of those requests. By implementing an approval and a timely draw process, the organization can enhance internal controls, reduce the risk of fraud, and ensure the accuracy and integrity of the fund draw process, and can better manage its cash flow, meet its financial obligations, and maintain the smooth operation of the program.
Viewed of Responsible Officials and Planned Corrective Actions:
Please refer to The Food Trust’s Corrective Action Plan.