JCFBA Audit
The August 2025 JCFBA Audit.
SUMMARY AUDIT FINDINGS AND RESPONSE
The JCFBA Board of Directors is committed to fulfilling our fiduciary responsibilities to manage the revenue received from donations, grants and in-kind contributions that provide the resources required to help provide food security to residents and visitors in Jefferson County.
Over the past 18 months, JCFBA has undergone significant leadership and operational changes focused on stabilizing our financial practices and expanding controls to reinforce financial confidence of our network of donors and clients. J
CFBA is currently led by a new six voting member Board of Directors and an employee Executive Director. This new Board replaces the prior ten-member Board of Directors that managed all the activities that were reviewed and analyzed by this audit described below.
The JCFBA conducted an independent review of financial and operating policies, procedures and expenditures for the period January 1, 2020, through May of 2024. This audit represents only the first step of a comprehensive ongoing program to improve JCFBA’s food delivery system while assuring financial integrity and security.
Insightful Analytics. LLC conducted this review. The specific areas of focus for this review included:
Financial review of JCFBA donations policies and procedures. This analysis included all four area foodbanks with specific focus on the Tri-Area food bank where extensive documentation of the donation receipt, tracking and resulting banking records were available
Review of financial execution and operational controls and practices related to Quilcene Building project since its inception.
Review financial practice execution for each Food Bank location
This review was comprehensive and evaluated available historical records for the audit period including, but not limited to JCFBA:
Board Meeting Minutes
Bylaws
Banking records for seventeen accounts among six banks
Financial and operating procedures
Vendor contracts and communications
Vendor invoices and related supporting documentation
External bookkeeping records- Food Bank manager and Board member credit card records
Food Bank manager and Board member expense reimbursement documents
IRS filed form 990’s
Annual Balance Sheets and Profit & Loss Statements
Executive staff email and other written communications
This audit revealed and documented several significant problems with the integrity and accuracy of JCFBA’s historical financial management practices. These findings include:
1. Audit Finding -Checking Accounts:
The average financial practice execution of checking accounts by each food bank location was measured resulting in average accuracy scores ranging from 52%- 74%. This scoring indicates how well or deficient each food bank manager performed in applying JCFBA expense approval, documentation and payment policies.
Recommendation:
As a result of this poor performance, it was recommended that individual food banks not be permitted to manage or have individual checking accounts.
Response:
JCFBA has eliminated food bank specific checking accounts and centralized all vendor billing and payment processes.
2. Audit Finding -Financial Controls for the Quilcene Building Project-
96% of all payments related to the Quilcene Building Project (QBP) (over $500,000 at the time of this review) were made without following established financial controls which required appropriate approval and financial invoice support.
Recommendation:
JCFBA should review all payments related to the QBP to assure compliance with internal control requirements and contract provisions.
JCFBA Response:
JCFBA has retained the services of Barker Creek Consulting LLC to conduct a construction audit of the QBP. Barker Creek specializes in functioning as an owner’s representative. This review includes evaluation of labor charges against industry standards for work performed, compares materials purchased against the physical structure and evaluates compliance with Jefferson County building standards. A separate audit report summary will be provided after completion of this review.
3. Audit Finding-Quilcene Vendor Contract:
The Quilcene Building Project vendor contract was not competitively bid nor reviewed by outside counsel and contained a 72-hour payment provision which rendered application of established fiscal control of expenditure approval procedures difficult to enforce.
Recommendation:
JCFBA should conduct a post pay audit of all invoices to assure compliance with Board approved payment policies.
JCFBA Response:
JCFBA is conducting a contract compliance audit of all invoices related to the QBP.
4. Audit Finding: -Donations not Deposited
Thousands of dollars of documented checks and cash donations were not deposited in JCFBA bank accounts.
Recommendation:
Problems with cash management at food bank suggests that JCFBA should discontinue the practice of receiving cash donations.
JCFBA Response:
JCFBA has implemented a new policy that prohibits the receipt of cash donations by volunteers at each of the 5 food bank locations. The issue of missing funds (e.g. cash and checks) has been referred to the Jefferson County Sheriff for further investigation and appropriate legal action.
5. Audit Finding: -Reporting the Value of Donations of Food and Labor
JCFBA has failed to consistently and accurately account and report the value of donated food and volunteer labor resulting in an understatement of financial stability of JCFBA to potential donors, grantors or financial institutions.
Recommendation:
JCFBA should implement a standardized policy to consistently record and report in-kind donations and volunteer hours. These statistics should be converted to dollar values consistent with guidance from the IRS and reported on JCFBA financial statements and form 990, as appropriate.
JCFBA Response:
JCFBA has implemented new policies standardizing the reporting of in-kind donations and reporting financial values for volunteer hours. Professional service volunteer hours or volunteer hours impacting asset values will be reported as in-kind donations on financial statements. Other volunteer hours will be noted in the Form 990 as requested by the IRS.
6. Audit Finding: -Food Bank Managers
As a result of poor financial practice management by volunteer food bank managers JCFBA should move to an employee-based manager model.
Recommendation:
JCFBA should implement a program to have employee food bank manager.
JCFBA Response:
JCFBA agrees with this recommendation and has implemented an employee recruitment program to support paid employee regional supply chain management and food bank Person in Charge (PIC) functions.
Conclusion:
JCFBA is dedicated to continuing the process of financial controls and managing our finances carefully to best serve the people of Jefferson County. In support of these efforts JCFBA will be conducting random reviews of selected financial transactions to assure compliance with established internal control policies and procedures. The findings of these reviews will be presented to the JCFBA Board of Directors at regularly scheduled monthly meetings.
To download a PDF of the above information: click here.
