Finding Text
Federal Agencies: Department of Agriculture Federal Assistance Listing Numbers: 10.568, 10.569 Program or Cluster: COVID-19 Food Distribution Cluster Pass-Through Entity Identifying Numbers: K2770 Criteria: 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal controls over federal awards that provide reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Additionally, Part 6 of the Compliance Supplement states that the Organization should have controls in place to ensure that the accuracy and completeness of data used to determine eligibility requirements are reviewed and agreed to support as necessary by staff and are reviewed by a knowledgeable supervisor. Condition: These activities were temporarily suspended during the COVID-19 pandemic; however the eligibility requirements resumed during the year ended June 30, 2022. The Organization did not resume eligibility verifications when the requirements were reinstated. A risk assessment spreadsheet is maintained and submitted to the funder annually, which details if subrecipients meet the required eligibility criteria. However, the Organization does not have controls in place to review these eligibility determinations to verify that they are complete and correct. Cause: There has been turnover in management personnel for the program and management did not know the requirements for subrecipient eligibility verifications had been reinstated. Effect or Potential Effect: There is a reasonable possibility that resources were provided to subrecipients who were not eligible. The Organization does not have the documentation to verify that eligibility procedures performed over prospective subrecipients occurred. Questioned Costs: Unknown Recommendation: Additional internal controls should be implemented to ensure that certifications are performed over all prospective subrecipients, and documentation is maintained and reviewed by an appropriate member of management. Appropriate personnel should also have adequate training related to eligibility compliance requirements and changes in program requirements. Views of Responsible Officials: Management agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.