TARGET HUNGER INC

Finding #2025-003 – Material Weakness and Other Noncompliance. Applicable federal program: U. S. Department of Housing and Urban Development, Economic Development Initiative, Community Project Funding, and Miscellaneous Grants, Assistance Listing #14.251, Contract Number: В-23-СР-TX-1411, Contract Year: 02/15/24 – 08/31/31. Criteria: Procurement – Nonprofit organizations are required to conduct procurement transactions in a manner providing full and open competition consistent with standards prescribed in the Uniform Guidance, and conform to federal laws and regulations and other contractual requirements. Uniform Guidance requires public notice for purchases over the Simplified Acquisition Threshold, which for Target Hunger is $350,000. Condition and context: During our testing of a sample of 3 expenditures requiring procurement, we identified one vendor exceeding $350,000 for which proper procurement procedures were not followed as Target Hunger did not issue a public notice. Additionally, Target Hunger’s procurement policy does not address formal procurement methods for purchases exceeding the Simplified Acquisition Threshold. Cause: Failure to have a procurement policy that addresses formal procurement requirements, including public notice and competitive solicitation in accordance with Uniform Guidance. Effect: Failure to follow formal procurement methods may result in Target Hunger purchasing goods or services for more than would be necessary if required competitive procurement procedures had been followed. Recommendation: Revise Target Hunger’s procurement policy to include procedures for formal procurement for purchases exceeding the Simplified Acquisition Threshold in accordance with the Uniform Guidance. Views of responsible officials and planned corrective actions: Management agrees with the finding. See Corrective Action Plan.

Finding #2024-001 – Significant Deficiency and Other Noncompliance. Applicable federal programs: U. S. Department of Housing and Urban Development, Economic Development Initiative, Community Project Funding, and Miscellaneous Grants, Assistance Listing #14.251, Contract Number: В-23-СР-TX-1411, Contract Year: 02/15/24 – 08/31/31, Harris County, Passed through The Houston Food Bank, COVID-19 Coronavirus State and Local Fiscal Recovery Funds, Assistance Listing #21.027, Contract Number: N/A, Contract Year: 02/08/23 – 12/31/24. Criteria: Procurement – Nonprofit organizations are required to maintain and use documented procedures for procurement transactions under a federal award and conduct procurement transactions in a manner providing full and open competition consistent with standards prescribed in Uniform Guidance, Subtitle III Procurement Standards and conform to federal and state laws and regulations and other contractual requirements. Simplified acquisition procedures are to be performed for procurement decisions greater than $10,000 and less than $250,000. Condition and context: Target Hunger does not have a documented procurement policy. For 1 of 6 transactions tested for procurement documentation, there were no simplified acquisition procurement procedures performed for professional services totaling $30,000. Cause: Failure to have a procurement policy and to perform simplified acquisition procedures for professional services. Effect: Failure to follow formal procurement methods may result in the organization purchasing goods or services for more than would be necessary if required competitive procurement procedures had been followed. Questioned costs: Unknown. Recommendation: Develop a formal procurement policy and provide training to staff responsible for procurement. Views of responsible officials and planned corrective actions: Management agrees with the finding. See Corrective Action Plan.

Finding #2024-002 – Significant Deficiency and Other Noncompliance. Applicable federal program: Harris County, Passed through The Houston Food Bank, COVID-19 Coronavirus State and Local Fiscal Recovery Funds, Assistance Listing #21.027, Contract Number: N/A, Contract Year: 02/08/23 – 12/31/24. Criteria: Allowable Costs – Compensation for personal services in accordance with §200.430 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards must be based on records that accurately reflect the work performed and support the distribution of the employee’s salary or wages among specific activities or costs objectives if the employee works on more than one federal award, non-federal award, indirect activities, or unallowable activities. Condition and context: 1 of 25 payroll transactions was not supported by a timesheet. Cause: A timesheet was not obtained for one transaction due to the employee changing positions during the month. Effect: Failure to have a time sheet to support compensation allocations could result in an over/under statement of compensation charged to the Federal grant. Questioned costs: $205.32. Recommendation: Provide additional training to employees to ensure timesheets are obtained for all payroll transactions to support the allocation of compensation. Views of responsible officials and corrective action plans: Management agrees with the finding. See Corrective Action Plan.