YOUNG MENS CHRISTIAN ASSOCIATION OF MONTGOMERY INC

U.S. Department of Agriculture Passed through the Alabama State Department of Education Program: Child and Adult Care Food Program CFDA: 10.558 Grant Number: AF6-0000 Noncompliance/Significant Deficiency Procurement Criteria Per 2 CFR 200.318-200.326, non-federal entities must follow federal procurement standards when acquiring goods and services, including proper documentation. Condition During our audit of procurement activities, we identifed two food vendors that do not have formal agreements with the entity. Cause Staff believed that long-standing relations with vendors were sufficient and did not realize that federal procurement rules still apply annually. Effect Failure to follow procurement guidelines may affect allowability of expenditures charged to the program. Recommendation We recommend that the entity train staff on federal procurement guidelines. These guidelines should be followed for all vendors from which it is reasonably foreseeable that total purchases will exceed $10,000. Documentation should be maintained for all vendors. Management's Response The YMCA will implement additional procedures to ensure compliance with federal procurement requirements under Uniform Guidance. Staff responsible for purchasing and vendor management will receive additional training related to procurement standards, documentation requirements, and contract oversight. Management will also establish a formal review process to identify vendors expected to exceed the federal threshold and ensure appropriate agreements and supporting documentation are maintained annually.

U.S. Department of Agriculture Passed through the Alabama State Department of Education Program: Child and Adult Care Food Program CFDA: 10.558 Grant Number: AF6-0000 Noncompliance/Significant Deficiency Eligibility Criteria Under 7 CFR Part 226 and 2 CFR 200.303, institutions participating in the Child and Adult Care Program must ensure that all participants meet federal eligibility criteria. Sponsors are responsible for collecting and maintaining documentation that demonstrates participants eligibility and must conduct appropriate oversight of sites to ensure ongoing compliance. Condition During our audit, we identified two participants for which the YMCA did not provide documentation to support eligibility based on enrollment forms and Income Eligibility Forms. Cause Operating sites are separate from the YMCA. As such, all enrollment and child records are maintained by the operating sites. The YMCA failed to monitor that the operating sites were maintaining records to support the participants. Effect Sponsors without documentation for participants may result in unallowable costs and reimbursements for ineligible meals, placing the program at risk for disallowed funding. The YMCA may be required to repay federal funds for meals claimed on behalf of participants whose eligibility could not be substantiated. As a result, questioned costs projected based on a sample error rate of 7.05% applied to the total population of $422,011, resulting in projected questioned costs of $29,735. Recommendation We recommend the entity implement and enforce procedures to collect and retain all required eligibility documents for participants. Management's Response The YMCA has updated documentation and communicated that to all operating sites and will strengthen oversight procedures to ensure enrollment forms and Income Eligibility Forms are collected, retained, and reviewed timely. Management will implement periodic compliance monitoring and provide additional training to site staff to ensure all required participant documentation is properly maintained.

U.S. Department of Agriculture Passed through the Alabama State Department of Education Program: Child and Adult Care Food Program CFDA: 10.558 Grant Number: AF6-0000 Noncompliance/Significant Deficiency Eligibility Criteria Institutions must determine each enrolled participant's eligibility for free and reduced price meals in order to claim reimbursement for the meals served to that individual at the correct rate. Condition During our audit, we identified one participant that had the incorrect meal code being claimed. Cause The site responsible for entering participants meal codes did not have adequate training or oversight to ensure the correct eligibility category was applied. The error was not detected prior to submission of reimbursement claims. Effect Inadequate control over the income eligibility determination can lead to improper rate determinations resulting in incorrect reimbursement claims. As a result, questioned costs projected based on a sample error rate of 2.05% applied to the total population of $422,011, resulting in projected questioned costs of $8,658. Recommendation We recommend that staff responsible for determining eligibility at the site receive additional training regarding grant requirements. Management's Response Additional training will be provided to staff responsible for determining and entering participant meal eligibility codes to ensure proper classification and reimbursement claims. Management will also implement a secondary review process for eligibility determination prior to submission of reimbursement claims to reduce risk of future errors.

U.S. Department of Agriculture Passed through the Alabama State Department of Education Program: Summer Food Service Program CFDA: 10.559 Grant Number: AF6-0000 Noncompliance/Significant Deficiency Procurement Criteria Per 2 CFR 200.318-200.326, non-federal entities must follow federal procurement standards when acquiring goods and services, including adherence to competition requirements and proper documentation. Condition During our audit of procurement activities, we identified purchases made from two food vendors that exceeded the micro-purchase threshold of $10,000. There was no evidence that the entity obtained price comparisons or quotations from other sources prior to selecting these vendors. Each vendor was used repeatedly throughout the year, and the cumulative totals were $38,998. Cause Staff believed that long-standing relationships with vendors or prior approvals were sufficient and did not realize that federal procurement rules still apply annually. Effect Failure to follow small purchase procedures increases the risk of overpaying for goods and may affect allowability of expenditures charged to the program. Recommendation We recommend the entity train staff on federal procurement guidelines. Purchases from vendors should be forecasted at the beginning of each grant period. Procurement guidelines should be followed for all vendors from which it is reasonably foreseeable that total purchases will exceed $10,000. Documentation should be maintained for all price quotations and comparisons reviewed prior to purchases for items exceeding the micro-purchase threshold. Management's Response Management acknowledges the importance of adhering to federal procurement standards, including the requirement for competitive pricing and documentation for purchases exceeding the micro-purchase threshold

U.S. Department of Agriculture Passed through the Alabama State Department of Education Program: Summer Food Service Program CFDA: 10.559 Grant Number: AF6-0000 Noncompliance/Significant Deficiency Eligibility Criteria Under 7 CFR 225.6(c) and 2 CFR 200.303, sponsors of the Summer Food Service Program must ensure that all sites meet federal eligibility criteria. Sponsors are responsible for collecting and maintaining documentation that demonstrates site eligibility and must conduct appropriate oversight of sites to ensure ongoing compliance. Condition During our audit, we identified two closed enrolled operating sites for which the YMCA did not provide documentation to support eligiblity based on enrollment of children. The YMCA did not perform sufficient oversight as a sponsor of the sites to verify that required eligibility records were obtained and maintained. Cause Operating sites are separate from the YMCA. As such, all enrollment and child records are maintained separately by the operating site. The YMCA verified that free meals may be provided to children based on the appropriate data maintained by schools; however, the YMCA failed to monitor that the operating sites were maintaining records to support that meals were only being provided to enrolled children. Effect Operating sites without documented eligibility may result in unallowable costs and reimbursements for ineligible meals or sites, placing the program at risk for disallowed funding. As a result, questioned costs totaling $4,163 were identified for meals claimed at the two sites lacking eligibility support. Recommendation We recommend the entity implement and enforce procedures to collect and retain all required eligibility documents for each SFSP site. Management's Response Management recognizes the critival role of eligibility documentation in maintaining compliance with SFSP regulations and ensuring program integrity.

Criteria: Use of reimbursement payments shall be used solely for the conduct of food service operation or to improve such food service operations, principally for the benefit of the enrolled participants. Records of such expenses should be properly maintained. Condition: The YMCA uses general ledger tracking codes to track and monitor reimbursements and expenses under separate grants. During the year, these tracking codes did not align with the actual expenses incurred under the grant and reported on the monthly CACFP requests for reimbursement. The YMCA does however maintain the invoices and timecards related to expenses incurred under the program. Cause: Food costs are reported on the monthly claims based on invoices in hand at the time the report is prepared. If an invoice is received after the submission date of the report, it is entered in the general ledger but is not being reflected in the reports. Labor costs are being under reported on the monthly claims due to a misunderstanding of the information provided by the payroll individual. Each month an allocation of labor is sent to the individual preparing the report. This allocation does not include allowable direct labor, payroll taxes, or benefits. Labor included on the report is based only on the allocation spreadsheet. Effect: Proper monitoring of program reimbursements and expenses cannot be performed using the general ledger detail. In addition, supporting documentation is not easily traceable due to inaccurate general ledger detail. This represents a risk that reimbursement funds will be used for costs other than grant related food services. Recommendation: We recommend that the general ledger detail be periodically reconciled to the monthly reports. Management's Response: Management agrees with the finding. The general ledger will be periodically reconciled to the reimbursement reports to ensure costs are being properly reported each month and records are maintained.

Criteria: Institutions must determine each enrolled participant's eligibility for free and reduced price meals in order to claim reimbursement for the meals served to that individual at the correct rate. Condition: Internal controls over the eligibility determination include completion and signature of the Income Eligibility Form by a knowledgeable member of staff. Of the six forms selected from one of the YMCA's operating sites, none of the forms were signed by a staff member. Cause: There was a change in personnel at this site. Appears the new staff member did not obtain adequate training regarding the Income Eligibility Form requirements. Effect: Inadequate controls over the income eligibility determinations can lead to improper rate determinations that result in incorrect reimbursement claims. Recommendation: We recommend the staff in charge of determining eligibility at the site receive additional training on the eligibility requirements of the grant. Management's Response: Management agrees with the finding. The staff person will receive additional training in the area of eligibility.

Criteria Use of reimbursement payments shall be used solely for the conduct of food service operation or to improve such food service operations, principally for the benefit of the enrolled participants. Records of such expenses should be properly maintained. Condition The YMCA uses general ledger tracking codes to track and monitor reimbursements and expenses under separate grants. During the year, these tracking codes did not align with the actual expenses incurred under each grant and reported on the monthly CACFP requests for reimbursement. The YMCA does however maintain the invoices and timecards related to expenses incurred under the programs. Cause Expenses are typically coded based on the location of meal service. Due to the COVID-19 Pandemic, certain locations previously serving CACFP meals began serving SFSP meals. The general ledger cost coding for these locations did not get updated leading to expenses incurred under the SFSP being tracked under the CACFP program. Effect Proper monitoring of program reimbursements and expenses cannot be performed using the general ledger detail. In addition, supporting documentation is not easily traceable due to inaccurate general ledger detail. This represents a risk that reimbursement funds will be used for costs other than grant related food services. Recommendation We recommend that the employees responsible for coding expenses to consider all changes in grant activity at the locations and code according to specific grant being operated at that time. In addition, we recommend that the general ledger detail be periodically reconciled to the monthly reports. Management's Response Management agrees with the finding. Those responsible for coding expenses will be educated to align expense coding with current grant activity and specific grant codes. The general ledger will be periodically reconciled to the reimbursement reports to ensure costs are being appropriately coded.

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