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: 2019-70030-30412; 2020-70030-33186; 2021-70034-34987
2021-70034-35361
Award Period: September 1, 2019 - August 31, 2022; September 1, 2020 - August 31, 2023
June 15, 2021 - June 14, 2024; August 1, 2021 - July 31, 2024
Compliance Requirement Affected: Cash Management
Type of Finding:
Significant Deficiency in Internal Control over Compliance
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 the same individual is both preparing and requesting the draw of funds for
the program without any approval by another individual. 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 the same individual is preparing and requesting the draw of funds for
the program with no approval by another individual.
Cause:
The Organization had significant 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 represents a lack of segregation of duties and 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:
N/A: Not a repeat finding.
Recommendation:
We recommend The Food Trust establish a system of checks and balances that includes a separation
of duties. This means that different individuals should be responsible for preparing and requesting the
draw of funds, and there should be a clear approval process in place. 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 proper segregation of duties, requiring approval from another individual and implementing
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.