To determine if the Department of Agriculture and Markets (Ag&Mkts) and the Department of Health (DOH) are ensuring the Nourish New York Program (Nourish NY) provides adequate access to the program for farmers and connects citizens across the State to surplus agricultural products. This audit covered Nourish NY spending from May 2020 through March 2022, and considered Ag&Mkts and DOH actions related to the program through May 2023.
About the Program
The COVID-19 pandemic revealed weaknesses in the State’s food supply system and caused serious economic hardships for farms and agribusinesses. Further, food insecurity remains a reality for many New York residents. Nourish NY was developed as a temporary program in May 2020 in response to disrupted food supply chains during the pandemic – the purpose of which was to expand the State’s food supply network and markets for New York farm products while also providing greater access to local, nourishing food options in food-insecure areas. Nourish NY supplies surplus agricultural products (e.g., milk, apples, cheese, yogurt, cabbage, squash) to populations who need them through the State’s network of food relief organizations (i.e., regional food banks, food pantries, soup kitchens, and community-based organizations that provide food for free to persons experiencing food insecurity).
Agricultural products purchased under Nourish NY must be grown, produced, or harvested in the State, and if further processed, the final product must contain at least 51%, by weight or volume, of agricultural products that are grown, produced, or harvested in the State. Products are made available for purchase from New York farmers, producers, and processors (hereafter, collectively referred to as vendors) to food relief organizations that then distribute the food to those in need. Nourish NY was made permanent in November 2021. Since Nourish NY’s implementation in May 2020, through March 2023, a total of $147 million has been dedicated to the program through six rounds of funding, with actual spending totaling $142,096,533.
The program is jointly administered by Ag&Mkts and DOH. Each agency has specific responsibilities for administering and monitoring the program. Ag&Mkts is responsible for conducting outreach to vendors, assisting food relief organizations in searching for specific food products, maintaining a farm product list to assist food relief organizations in finding products, serving as a contact for vendors, and verifying that purchases made with Nourish NY funds are products sourced from New York vendors, as required. DOH is responsible for developing contracts with food relief organizations, reviewing and approving all claims for payment, communicating and addressing concerns related to contracts, and serving as a contact for food relief organizations while providing oversight of the program. In addition to the purchase of New York food products, DOH also allows regional food banks to spend up to 15% of Nourish NY funding on administrative costs (e.g., salaries, rent, utilities) associated with Nourish NY. Sub-awardees are also allowed 15% for administrative costs and are further allowed up to another 15% of the remaining funding to purchase non-New York food products.
We found both agencies should strengthen controls to ensure only eligible products and expenses are funded by Nourish NY. Specifically:
- Ag&Mkts’ and DOH’s processes and documentation provided by food relief organizations make determining whether expenses are eligible for Nourish NY funding difficult – generally because they lack sufficient detail or because information used by DOH and Ag&Mkts is not being used effectively together to determine if products purchased with Nourish NY funds are eligible New York food products. Further, because expenses from certain organizations are submitted as a lump sum without any detail, DOH did not adequately review $39.7 million in purchases.
- DOH provided little guidance to food relief organizations establishing what constitutes an allowable administrative cost, and conducted minimal review to determine if administrative expenses claimed were allowable and therefore used to support Nourish NY.
- We identified 571 purchases from 42 vendors, totaling $7,160,507, that were required to have accompanying documentation to support the source of the food purchased. However, neither the regional food banks and sub-awardees nor Ag&Mkts could provide the documentation for 165 (29%) of the purchases from 20 vendors, totaling $970,667.
As a result, there is a risk that funding from Nourish NY may not be going toward the purchase of eligible agricultural products to the benefit of the State’s vendors and support of its overall agribusiness needs.
Additionally, DOH has adopted requirements of its Hunger Prevention and Nutrition Assistance Program (HPNAP) and applied them to Nourish NY – specifically regarding which New York food products are eligible for purchase under the program – requiring Nourish NY purchases to follow HPNAP standards. Consequently, this limits the eligibility of certain agricultural products from the Nourish NY program – and possibly the participation of certain vendors. Further, Ag&Mkts should do more to promote participation by vendors. To aid in these efforts, improvements could be made to the information collected and used by Ag&Mkts, which could also assist in evaluating the statewide impact of Nourish NY on the State’s farmers and agribusinesses and, therefore, the effectiveness of the program.
- Develop processes and procedures to improve data collection and reliability for information maintained on vendor participation and use the data to build the program’s effectiveness and promote enhanced participation.
- Communicate guidance to food relief organizations on eligibility requirements for purchases made under Nourish NY.
To Ag&Mkts and DOH:
- Improve monitoring of Nourish NY, which may include but not be limited to enhancing documentation requirements, and review processes to ensure purchases are from eligible sources.
- Collaborate to develop and document criteria for Nourish NY purchases that most effectively balance the needs of its various stakeholders and communicate the criteria to food relief organizations and vendors.
State Government Accountability Contact Information:
Audit Manager: Heather Pratt
Phone: (518) 474-3271; Email: [email protected]
Address: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236