St. Louis Area FoodbankNon-Profit

AL number: 10.568, 10.569, 10.565 AL title: Emergency Food Assistance Program – Food Distribution Cluster Compliance requirement: Special Tests and Provisions Name of federal agency: U.S. Department of Agriculture Name of pass-through entity: Illinois Department of Human Services and Missouri Department of Social Services Type of finding: Material Weakness in Internal Control over Compliance of Major Programs Criteria: St. Louis Area Food Bank, Inc. is responsible for maintaining effective internal controls over compliance with Special Tests and Provisions. Proper controls require that documentation supporting food commodity receipts, including inspection reports and bills of lading, be complete, signed, and retained to ensure accountability and compliance with federal requirements. Condition: During our audit, we noted that required documentation was not consistently maintained. Specifically, the inspection report (lading report) was not completed or signed during the intake process, and for one receipt, neither the inspection report nor the bill of lading could be obtained for testing on another receipt. These issues indicate a breakdown in internal controls over documentation and verification of food receipts. Cause: The deficiencies appear to result from insufficient oversight and high staff turnover in the warehouse, combined with onboarding of new employees who may not yet be fully familiar with the program’s documentation requirements and procedures. Possible effect: Incomplete or unsigned documentation indicates a failure in the program’s internal controls, increases the risk of noncompliance with federal requirements, and may hinder the ability to verify service delivery of receipts and inventory accountability. Questioned cost: None Recommendation: We recommend management reinforce documentation procedures through staff training and implement a mandatory review process to ensure inspection reports and bills of lading are completed, signed, and retained for all receipts of food commodities. Additionally, periodic internal reviews should be conducted to monitor compliance and address recurring issues promptly.

AL number: 10.568, 10.569, 10.565 AL title: Emergency Food Assistance Program – Food Distribution Cluster Compliance requirement: Special Tests and Provisions Name of federal agency: U.S. Department of Agriculture Name of pass-through entity: Illinois Department of Human Services and Missouri Department of Social Services Type of finding: Significant Deficiency in Internal Control over Compliance of Major Programs Criteria: St. Louis Area Food Bank, Inc. is responsible for implementing and maintaining an effective internal control system over compliance with Special Tests and Provisions. A proper internal control system requires that documentation supporting compliance with program requirements, including inventory distributions, be accurate, complete, and timely to ensure accountability and prevent errors or misstatements. Condition: During the audit, we noted that documentation procedures were not consistently followed. Specifically, two invoice forms of the twenty tested were missing staff signatures. These instances indicate a breakdown in internal controls related to documentation and verification processes. Cause: The deficiencies appear to result from inadequate oversight during intake procedures and high staff turnover, which led to inconsistent adherence to documentation requirements. Possible effect: Failure to complete and retain required documentation compromises the integrity of internal controls, increases the risk of noncompliance with federal requirements, and limits the ability to verify proper food distribution, eligibility, and inventory accountability. Questioned cost: None Recommendation: We recommend that management strengthen internal controls over documentation by reinforcing established procedures through targeted staff training and regular reminders to ensure compliance. Additionally, management should implement a review or checklist process to verify that all required forms are completed and signed prior to finalization. To further enhance oversight, periodic internal audits should be conducted to monitor adherence to documentation requirements and promptly address any recurring issues.

AL number: 10.568, 10.569, 10.565 AL title: Emergency Food Assistance Program – Food Distribution Cluster Compliance requirement Special Tests and Provisions Name of federal agency: U.S. Department of Agriculture Name of pass-through entity: Illinois Department of Human Services and Missouri Department of Social Services Type of finding: Compliance Finding – Noncompliance with Federal Program Requirements Criteria: Federal regulations require that recipients maintain complete and accurate documentation for food commodities, including inspection reports and bills of lading, to demonstrate compliance with Special Tests and Provisions and ensure accountability for inventory received and distributed. Condition: During our audit, we were unable to obtain the inspection report and bill of lading for one food commodity receipt of the twenty tested. The absence of these documents prevented us from performing required compliance testing and verifying adherence to federal requirements. Cause: The deficiency appears to result from inadequate retention of documentation and insufficient oversight of intake procedures, compounded by staff turnover and onboarding challenges.Possible effect: Failure to maintain required documentation constitutes noncompliance with federal program requirements, limits the ability to verify proper food inventory tracking, including receipts and distributions, and increases the risk of errors or misstatements in reporting. Questioned cost: None Recommendation: We recommend management implement stronger controls over document retention by establishing clear procedures for collecting, signing, and storing inspection reports and bills of lading. Additionally, management should provide training to staff and conduct periodic internal reviews to ensure compliance with documentation requirements.

Finding number: 2024-002 - Lack of Operating Effectiveness on Internal Control Over Compliance for Food Distributions AL number: 10.568, 10.569, 10.565 AL title: Emergency Food Assistance Program – Food Distribution Cluster Compliance requirement: Name of federal agency: Name of pass-through entity: Special Tests and Provisions U.S. Department of Agriculture Illinois Department of Human Services Type of finding: Significant Deficiency in Internal Control over Compliance of Major Programs Criteria: St. Louis Area Food Bank, Inc. is responsible for implementing and maintaining a proper internal control system over special tests and provisions. A proper internal control system requires that documentation supporting compliance with program requirements, including inventory distributions, be accurate, complete, and prepared in a timely manner to prevent errors or misstatements. SECTION III - SUMMARY OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (continued) Condition: During the audit, it was identified that an invoice signed by the partner agency indicated an incorrect gross weight compared to inventory disbursed per the inventory system. However, the actual inventory disbursed differed due to items being unavailable or insufficient during packing. Although the disbursed amount was accurately reflected in the accounting system and subsequent reports, and an email was sent to the partner agency confirming the actual disbursement, the signed packing list/invoice provided at the time of delivery was not updated to reflect the actual disbursed inventory. Cause: The discrepancy occurred due to significant turnover in the warehouse and the absence of specific Standard Operating Procedures (SOPs) for the packing and distribution process. Packing lists were printed the night before delivery, and adjustments made during packing the following morning were not reflected in updated packing lists due to timing constraints. Possible effect: The signed packing list/invoice did not accurately reflect the actual inventory disbursed, indicating a control deficiency in the process for ensuring the accuracy of documentation for inventory distributions. Questioned cost: None Recommendation: The Organization should develop and implement formal SOPs for inventory packing and distribution processes. These SOPs should include procedures for updating and reconciling packing lists with actual disbursements to ensure that all documentation accurately reflects the distributed inventory. Additionally, staff training should be conducted to ensure adherence to these procedures. Views of responsible officials: Corrective Action Plan: Food distribution invoice signed by one (1) partner agency did not agree to the actual weight disbursed. We have taken action to address this issue, and it has already been implemented. A new Chief Operating Officer along with several warehouse employees were hired to ensure that proper staffing was maintained in the process. Management has also developed new Standard Operating Procedures (SOPs) and training programs for warehouse staff to ensure accurate documentation and compliance moving forward. This allows for the packing lists to be printed and packing to occur well in advance to allow for adjustments to be made in time to accurately reflect the amounts disbursed. The new SOPs also include that partner agencies have at least 24 hours to contact the Organization for any issues with the distribution and the Organization will update documentation and/or correct the order to reflect the documentation. Two positions have been staffed: Inventory Control and Quality Control part of their role is to make sure the pick ticket matches the pick order and then reconcile against the invoice at the time of posting. Name of Responsible Person: Meredith Knopp, Chief Executive Officer Anticipated Completion Date: Implemented in December 31, 2024

Finding number: 2024-003 AL number: 10.568, 10.569, 10.565 AL title: Emergency Food Assistance Program and Commodity Supplemental Food Program – Food Distribution Cluster Compliance requirement: Name of federal agency: Name of pass-through entity: Eligibility and Activities Allowed U.S. Department of Agriculture Illinois Department of Human Services and Missouri Department of Social Services Type of finding: Significant Deficiency in Internal Control over Compliance of Major Programs Criteria: St. Louis Area Food Bank, Inc. is responsible for implementing and maintaining a proper internal control system over eligibility and activities allowed. Internal controls over compliance require that agreements and documentation be executed in a timely manner to maintain compliance with program requirements and ensure accountability. Condition: During the audit, it was discovered that due to significant staff turnover during the year, certain required agreements for the fiscal year period (July 1, 2023 – June 30, 2024) with partner agencies were not signed until late fiscal year 2024 or fiscal year 2025. This delay in execution of required agreements represents a control deficiency over documentation requirements. Cause: The delay in executing required agreements was attributed to staff turnover, which resulted in lapses in the process and oversight of ensuring timely completion and signing of documentation. Possible effect: Failure to execute required agreements in a timely manner increases the risk of non-compliance with eligibility and activities allowed requirements and undermines the effectiveness of internal controls over compliance. Questioned cost: None Recommendation: The Organization should implement procedures to mitigate the impact of staff turnover, including cross-training and clear documentation of roles and responsibilities related to the execution of required agreements. Management should establish a tracking system to monitor agreement completion and ensure timely follow-up. Additionally, management should provide periodic training to relevant staff to reinforce the importance of timely compliance with documentation requirements. SECTION III - SUMMARY OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (continued) Views of responsible officials: Corrective Action Plan: Single Audit partner agreements for fiscal year 2024 (July 1, 2023 – June 30, 2024) with five (5) partner agencies were signed in June 2024 and November 2024. Management notes that as of year-end and final fieldwork, personnel are now in place who understand the importance of maintaining and completing required documentation, including annual and bi-annual agreements. Management will implement additional measures, such as improved tracking systems and staff training, to prevent future delays in the execution of required annual and bi- annual agreements. Management currently reconciles A133 documents to agency partners. In addition, the management team is ensuring documents are signed and stored in an electronic document signature platform i.e DocuSign. Access to this platform will be available to all key staff for utilization and verification. Tracking is also documented within a separate excel spreadsheet and reconciled back to the electronic signature database. A Standard Operating Procedure has been created and implemented. Name of Responsible Person: Meredith Knopp, Chief Executive Officer Anticipated Completion Date: December 31, 2024