EMERGENCY FOOD NETWORK OF TACOMA AND PIERCE COUNTY

Criteria or specific requirement: 2 CFR 200.430(i)(1)(viii) states that “budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim changes made to a Federal award based on budget estimates. All necessary adjustments must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: Grant hours are not consistently tracked on employees’ timesheets. Wages charged to the program are based on budgeted estimates. Per 2 CFR 200.430(i)(1)(viii), this is not allowed without additional steps to ensure accuracy, allowability and proper allocation. Insufficient evidence was presented to support a reasonable reflection of employee federal and non-federal activity. EFN does not have a written policy nor system of internal controls to review and true-up grant wages to actual. Questioned costs: Known: $37,599 Likely: $302,557 Context: During testing, CLA identified instances of time and effort not being documented on time sheets for charged payroll costs for every selection. Cause: Management was not aware that estimated budgeted costs alone are not sufficient to support personnel costs charged to Federal awards, and previous auditors had never mentioned any issue with treatment. Effect: Charging grant wages based on estimates rather than actual hours worked on the program may raise compliance concerns. Estimating grant wages without adequate support for time and effort documentation may result in noncompliance with grant regulations. This can also lead to overcharging or undercharging the federal grant, which may result in penalties or repayment obligations. Repeat Finding: No. Recommendation: We recommend that EFN incorporate a system of internal controls that clearly documents the time and effort that each individual employee spends on each grant per month. This can be done by tracking and recording the actual hours each employee, regardless of position, spends working on each grant, on their time sheet or with a specific grant code, that specifies how many hours per day were spent on each federal and nonfederal activity. Alternatively, EFN can implement an after-the-fact review procedure to ensure the proper allocation of payroll expenditures to Federal and non-Federal awards, in accordance with 2 CFR 200.430. Views of responsible officials: There is no disagreement with the audit finding.

Funding Agency: Department of Treasury ALN: 21.027 Criteria The Organization is required to confirm annually that in subrecipients are not suspended or debarred, and have an active system award management (""SAM"") number, in accordance with Uniform Guidance. Condition The Organization did not confirm that its subrecipients are not suspended or debarred, nor whether they have an active system award management (""SAM"") number. Context The Organization did not confirm that its subrecipients are not suspended or debarred, nor whether they have an active system award management (""SAM"") number, during the year then ended December 31, 2022. Effect Federal expenditures for ALN #21.027 were passed by the Organization to subrecipients, wherein there was a moderate possibility the subrecipients' unfavorable suspension or debarment status, or lack of an active SAM number, was undetected. Cause The Organization confirms that its subrecipients are not suspended or debarred, and whether they have an active system award management (""SAM"") number, on a bi-annual basis and confirmation was not obtained during the year then ended December 31, 2022. Auditor's Recommendation We recommend staff training to review suspension and debarment, and SAM number status of subrecipients. We also recommend the implementation of annual confirmation of subrecipients' suspension and debarment and SAM number status.

Funding Agency: Department of Agriculture ALN: 21.027 Criteria The schedule of federal awards ("SEFA") is required to be prepared in accordance with the Uniform Guidance to reflect expenditures of federal awards. Condition The SEFA, as originally prepared, inaccurately reported the source of a federal grant. Context The SEFA did not accurately reflect the correct source of federal expenditures for ALN #21.027. Effect The SEFA did not properly reflect the correct ALN as required by the Uniform Guidance. This resulted in the selection of an additional major program mid-way through the audit. Cause The SEFA was completed without verifying the source of the grant funding as outlined on the contracts. Auditor's Recommendation We recommend staff training to review contracts and verify the source of funding for each grant. We also recommend the implementation of procedures to provide oversight that ensures the completion of an accurate SEFA.

Funding Agency: Department of Agriculture CFDA Number: 10.178 and 10.568 Criteria The schedule of federal awards ("SEFA") is required to be prepared in accordance with the Uniform Guidance to reflect expenditures of federal awards. Condition The SEFA, as originally prepared, was materially understated. Context The SEFA did not accurately reflect the proper amount of federal expenditures and it was understated. Effect The SEFA did not properly reflect the amount of federal awards as required by the Uniform Guidance. Cause The SEFA was completed using spreadsheets maintained by the Organization to track reimbursements rather than actual expenditures that were expensed in the general ledger. Auditor's Recommendation We recommend staff training in the preparation of the SEFA and the implementation of procedures to provide oversight that ensures the completion of an accurate SEFA.

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