Finding 583049 (2022-004)

Type of finding: Federal Award Situation: Significant deficiency; Compliance with federal regulations. Assistance Listing No: 10.572 and 10.576 Federal Program: WIC Farmers’ Market Nutrition Program and Senior Farmers Market Nutrition Program Name of federal agency: Department of Agriculture Covid-19 Program: No Compliance Requirements: Reporting Prior-Year(s) Audit Finding(s): 2020-002, 2019-002 Questioned Costs: Not determined. Condition: Payroll costs charged during FY 2021 and FY 2022 for the WIC Farmers’ Market Nutrition Program and Senior Farmers Market Nutrition Program were allocated at various rates. A cost allocation plan supporting such rates was not submitted for audit review. Context: Payroll costs were charged as follows: Program Report Name Report Year Payroll cost charged Cost Allocation Method WIC Farmers Market Nutrition Program Form FNS-683B WIC Farmers’ Market Nutrition Program Annual Financial and Program Data Report 2021 $44,666 For the months of January through August 2021, and December 2021 payroll charged to the program consisted of 25% and 20% of the gross salary and fringe benefits paid to program employees. For the months of September through November 2021 a 30% rate was used. WIC Farmers Market Nutrition Program Form FNS-683B WIC Farmers’ Market Nutrition Program Annual Financial and Program Data Report 2022 From: 10/2021 To: 9/2022 $49,356 During the months of January through December 2022, payroll paid to program employees were charged between the following activities: Family Market, WIC Farmer’s Market Nutrition Program and Senior Farmer Market Nutrition Program at 40%, 30%, and 30% respectively. Gross salaries and fringe benefits were multiplied by an allowable percentage of 70% or 30% to arrive at an intermediate amount called allowable payroll. Then, this amount was multiplied to 30% to arrive at the total charged payroll Context, continued: Program Report Name Report Year Payroll cost charged Cost Allocation Method Senior Farmers Market Nutrition Program Form FNS-683A Senior Farmer’s Market Nutrition Program Annual Financial and Program Data Report 2021 $44,667 For the months of January through August 2021, and December 2021 payroll charged to the program consisted of 25% and 20% of the gross salary and fringe benefits paid to program employees. For the months of September through November 2021 a 30% rate was used. Senior Farmers Market Nutrition Program Form FNS-683A Senior Farmer’s Market Nutrition Program Annual Financial and Program Data Report 2022 $42,965 During the months of January through December 2022, payroll paid to program employees were charged between the following activities: Family Market, WIC Farmer’s Market Nutrition Program and Senior Farmer Market Nutrition Program at 40%, 30%, and 30% respectively. Gross salaries and fringe benefits were multiplied by an allowable percentage of 70% or 30% to arrive at an intermediate amount called allowable payroll. Then, this amount was multiplied to 30% to arrive at the total charged payroll Criteria: As per 7 CFR part 248.12, Indirect costs are administrative costs that benefit multiple programs or activities, and cannot be identified to any one without effort disproportionate to the results achieved. In accordance with the provisions of 2 CFR part 200, subpart E and USDA implementing regulations 2 CFR part 400 and part 415, a claim for reimbursement of indirect costs shall be supported by an approved allocation plan for the determination of such costs. As Per 7 CFR part 249.12, Indirect costs are administrative costs that benefit multiple programs or activities, and cannot be identified to any one program or activity without effort disproportionate to the results achieved. In accordance with the provisions of 2 CFR part 200, subpart E and USDA implementing regulations 2 CFR part 400 and part 415, a claim for reimbursement of indirect costs shall be supported by an approved allocation plan for the determination of such costs. Cause: The State Agency is working with the Cost Allocation plan, nevertheless, is not yet finished. The State Agency is waiting for the completion of the implementation of the payroll program, that is currently in a trial stage. Effect: The State Agency is not in compliance with the recordkeeping requirements in 7 CFR part 248.23 and 249.23 that states that each State Agency must maintain full and complete records concerning FMNP and SFMNP operations. Auditor’s recommendation: The State Agency must complete their cost allocation plan that supports the rates used to account for the payroll cost charged across the Farmers Market Nutrition Programs. Views of Responsible officials and corrective actions: The Cost Allocation Plan is being drafted and will be submitted to the regulatory agency when the attendance and payroll program systems are fully implemented. Audit Status: In process of compliance.