Audit finds gaps in Nevada nutrition-program accounting and shipping-fee calculations

An audit presented July 29 to the Executive Branch Audit Committee reviewed the Nevada Department of Agriculture’s management of nutrition programs and recommended the department reassess operations moved to it in 2013, establish accounts required by federal rules, and recalculate shipping fees charged to schools in the USDA Foods in Schools program.

"The department charges schools either $1.50 or $2.50 per case of food delivered," Executive Branch Auditor Marty Schaffer said. He told the committee the department had no record of how those rates were determined and that more than $400,000 has accumulated from charging the fees since fiscal year 2019 after the department implemented a dedicated job code to track shipping-fee transactions.

The audit found statutory language and state accounting practices that the department acknowledged may be out of date since program authority transferred to the department in 2013. Auditors said a dedicated account required by federal regulations for tracking shipping-fee receipts had not been established in practice and that records of food-distribution costs required by federal rules were not consistently maintained.

Director JJ Goikichi (as identified in the meeting) told the committee the department was aware of aged statutes and would work to align state practice with federal program requirements, while noting the USDA’s rules continue to evolve and that legislative fixes will require timing decisions tied to future federal guidance. The auditor said the department should recalculate shipping fees to reflect actual distribution costs and submit the rates for USDA approval.

The audit was presented as informational only. The department and auditors said they will work together on recalculating fees and updating statutory and regulatory alignment; the audit recommended follow-up and further action by mid-2026.