FOOD BANK OF CENTRAL & EASTERN NORTH CAROLINA, INC.Non-Profit

Finding 2019-1, Internal Controls over TEFAP Commodity Disbursements Information on the federal program: The Emergency Food Assistance Program (Food Commodities), CFDA 10.569, U.S. Department of Agriculture, Contract #: 19-011-2018. Criteria or specific requirement: In accordance with the Federal Compliance Supplement accurate and complete records must be maintained with respect to the receipt, distribution/use, and inventory of USDA Foods, including end products processed from USDA Foods in TEFAP. Conditions: During testing, files containing documentation for commodity disbursements were incomplete. Upon first review 27 files did not contain enough documentation to support the total commodity disbursements reported for the agencies tested. The Organization was able to provide invoices that had not been filed and identify filing errors upon request. Upon second review there were 3 files not containing documentation to support the total amount of disbursements received by outside agencies. Context: We sampled 30 agency files of a total of 269 agencies. We noted the above conditions in 27 of the 30 agency files. Effect: Commodity disbursements not being filed in the agency?s file at the time of disbursement results in a risk that the reported disbursement amounts for agencies do not reflect the amount actually distributed. Cause: Review of agency distribution documentation was not being performed to ensure accurate and complete records for TEFAP commodities. Recommendation: We recommend that the Organization adopt procedures that will ensure that these agency files contain appropriate documentation of the commodities disbursed. A periodic review should be completed to ensure files support the total amount of commodities received by each agency.

Finding 2019-2, CSFP Eligibility Information on the federal program: Commodity Supplemental Food Program, CFDA 10.565, U.S. Department of Agriculture, Contract #: 19-012-2004. Criteria or specific requirement: In accordance with the State Compliance Supplement used in conjunction with the Federal Compliance Supplement, to be eligible to receive USDA foods, eligibility for the elderly feeding program is based on a recipient?s income which must be at or below 130% of Federal Poverty Income Guidelines. The poverty guidelines are published by USDA and NCDA Food Distribution Division distributes these to recipient agencies. This income is to be based on gross income of a family.Conditions: During testing of CSFP recipient files it was noted that an individual who?s income was above the threshold established above received benefits while they were ineligible. Context: We sampled 46 CSFP recipient files out of a total of 5,492 as of June 30, 2019. We noted the above conditions in 1 of the 46 files. Effect: CSFP commodities were distributed to an individual that was not eligible to receive them. Cause: The application provided by the recipient was not thoroughly reviewed for income eligibility prior to the individual being approved to receive benefits. Recommendation: We recommend that the Organization adopt procedures that will ensure that CSFP applications are reviewed for all eligibility requirement prior to the approval of benefits.

Finding 2019-3, Internal Controls over CSFP Recipient Filing Information on the federal program: Commodity Supplemental Food Program, CFDA 10.565, U.S. Department of Agriculture, Contract #: 19-012-2004. Criteria or specific requirement: In Accordance with the Federal Compliance Supplement accurate and complete records must be maintained with respect to the receipt, distribution/use, and inventory of USDA Foods, including end products processed from USDA Foods for CSFP. Conditions: During testing of CSFP recipient files it was noted that documentation was not being filed in a timely manner. 20 of the files did not have disbursement information for the month chosen for testing, 8 had no disbursement information for the year under audit, 5 did not have proper authorization for proxies and 5 were missing an application or recertification for the audit period. Context: We sampled 46 CSFP recipient files out of a total of 5,492 as of June 30, 2019. We noted the above conditions in 35 of the 46 files. Effect: CSFP documentation not being reviewed and filed in a timely manner results in a risk that individuals who are ineligible could continue to receive CSFP commodities. In addition, commodities could continue to be prepared for individuals that have not been active participants, resulting in a surplus of commodities being prepared leading to waste. Cause: Filing and review of CSFP applications, recertification and distribution documentation was not being performed to ensure accurate and complete records for CSFP. Recommendation: We recommend that the Organization adopt procedures that will ensure that CSFP files are kept up to date and documentation is reviewed and filed in a timely manner.