Finding Text
Finding 2022-003
Federal Agency: Department of Agriculture
Federal Program: Food Distribution Cluster
CFDA: #10.568, 10.569
Compliance Requirement: Special Tests and Provisions – Accountability for USDA Foods
Type of Finding: Significant Deficiency in Internal Controls over Compliance
Repeat Finding: Yes – 2021-003
Criteria:
7 CFR §250.19 Recordkeeping Requirements
Accurate and complete records must be maintained with respect to the receipt, distribution/use, and inventory of USDA Foods. Failure of the distributing agency to comply with recordkeeping requirements
must be considered prima facie evidence of improper distribution or loss of donated foods and may result in a claim against such party for the loss or misuse of donated foods. In addition, records relating to the
requirements for donated foods must be retained for a period of three years from the close of the fiscal year to which they pertain.
Condition:
The Organization requires subrecipients to sign an invoice indicating their pick-up of USDA items taken out of the Organization’s inventory. From a sample of twenty-five (25) USDA distributions taken out of or
returned to the Organization’s inventory, (1) sample had ship date different from the date distributed.
Question Costs:
N/A
Context:
The Organization has a policy whereby USDA products distributed are invoiced to receiving agency and agency signs to indicate their receipt of USDA items.
Cause:
Controls were not in place to ensure all inventory transactions are properly documented with signature for inspections upon disbursement of inventory.
Effects:
Inventories may not be accounted for properly.
Recommendations:
We recommend original records relating to the requirements for distributed foods be retained for the required period.
Management’s Response:
Management concurs with the finding.