Finding Text
Type of finding: Federal Award
Situation: Significant deficiency; Compliance with federal regulations.
Assistance Listing No: 10.572
Federal Program: WIC Farmers’ Market Nutrition Program
Name of federal agency: Department of Agriculture
Covid-19 Program: No
Compliance Requirements: Special Test and Provisions-Coupon and Market Management
Prior-Year(s) Audit Finding(s): None
Questioned Costs: Not determined.
Condition:
In one of the coupons selected the farmer identifier, although present in the coupon, was not legible, therefore we could not tie in the coupon with the farmer that redeemed the coupon.
Context:
As part of our audit procedures, we selected 60 redeemed coupons and tied them with the farmer that redeemed the coupon to ascertain that AEDA complied with the Coupon and Market Management provisions. As part of the approval of the farmer to the program, the Agency assigns a stamp number to each farmer per program year. This stamp number must be placed in the coupon when received by the farmer and is the only mechanism in place to validate that the coupon was redeemed by an authorized farmer. In one of the vouchers selected, the stamp, although present in the coupon, was not legible, therefore we could not tie in the coupon with the farmer that redeemed the coupon.
Criteria:
7 CFR Part 248.10 Coupon and Market Management states that only farmers, farmers' markets and roadside stands authorized by the State agency may redeem FMNP coupons. Only farmers authorized by the State agency or that have a valid agreement with an authorized farmers' market may redeem coupons. The State agency shall design and implement a system of review of FMNP coupons to detect errors. At a minimum,
the errors the system must detect are a missing recipient signature, a missing farmer and/or market identification, and redemption by a farmer outside of the valid date. The State agency shall implement procedures to reduce the number of errors in transactions, where possible. The State agency shall identify
the disposition of all FMNP coupons as validly redeemed, lost or stolen, expired, or not matching issuance records. Validly redeemed FMNP coupons are those that are issued to a valid recipient and redeemed by an authorized farmers/farmers' market within valid dates.
Cause:
Although AEDA has a system of review of FMNP coupons in place, it was not able to trace the redeemed coupon to the authorized farmer for the exception noted.
Effect:
As per 7 CFR Part 248.10, FMNP coupons that were redeemed but cannot be traced to a valid recipient or authorized farmer/farmers' market shall be subject to claims action in accordance with § 248.20. As per 7 CFR 248.20, FNS is authorized to establish claims against a State agency for unreconciled FMNP coupons. When a State agency can demonstrate that all reasonable management efforts have been devoted to reconciliation and 99 percent or more of the FMNP coupons issued have been accounted for by the reconciliation process, FNS may determine that the reconciliation process has been completed to satisfaction.
Auditor’s recommendation:
Management should strengthen their existing system of review of FMNP coupons in order to reduce the number of errors in transactions, where possible.
Views of Responsible officials and corrective actions:
We designed and trained personnel to work with the bank statements to identify timely any voucher in which the farmer identifier is not legible. In those cases, a copy of the voucher must be sent to the Auxiliary Market Director to proceed to identify the farmer appropriately and request from the farmer a certification attesting that he/she redeemed the voucher.
Audit Status:
In process of compliance.