Audit 17187

Criteria: The Organization?s policies over payroll indicate that completed timesheets are approved by the employee and then submitted electronically to the employee?s supervisor for approval. Upon submission of the timesheet to the employee?s supervisor, the supervisor will verify the accuracy of the timesheet and either approve as is, edit and approve, or contact the employee to make corrections. The employee can go back into the timesheet and make the required corrections and then must re-submit to his or her supervisor for final approval until a certain point at which the timesheet review process is locked. The Payroll Specialist reviews all approved timesheets to ensure accuracy and follows-up on any timesheets not yet complete and/or approved. If any timesheets remain outstanding as of Friday, the Payroll Specialist will lock the timesheets in order to review and pay employees for the time that has been submitted to allow for proper processing time. Condition: During our testing of payroll transactions, we noted 13 of 40 employee timesheets that were not signed at all, or in its entirety by the employee?s supervisor, per our review of the Dayforce Authorization Report for the applicable payroll period tested. Cause: Per inquiry, it appears the missing approvals were an oversight by the applicable supervisor before the timesheets became locked by the Payroll Specialist. Effect: Without proper oversight and approval of employee hours by a supervisor a higher risk exists that time recorded by the employee may be incomplete or inaccurate. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization follow its stated internal control policies over payroll to ensure timesheets are adequately reviewed and approved. Views of Responsible Officials: While the Mosaic policy indicates that all time sheets are approved by the employee and the supervisor, there are occasions where that is not possible, and the payroll clerk must approve in order to process payroll. Tracking employee approvals before processing pay is not possible in an organization with 5,000 employees. Currently Mosaic and all Sheppard Pratt Foundation subsidiary corporations are following the Sheppard Pratt policies which do not specify payroll approval requirements.

Criteria: The Organization is responsible for ensuring there is adequate controls over its cash disbursements process and adequate documentation is maintained to support its disbursements. Condition: During our testing of forty haphazardly selected client assistance expenditures, an invoice or other supporting documentation could not be provided for six selected transactions, for a total amount of $27,147.95. Five of the six expenditures were made electronically via a debit/credit card. Cause: Per inquiry, the cause is unknown and appears to be an oversight and/or lack of proper record keeping. Effect: Without adequate supporting documentation for disbursements, the Organization is at a heightened risk that expenditures are being made and charged to the federal award that are not allowed and/or for an eligible participant of the program. Questioned Costs: $27,147.95 Repeat Finding: No Recommendation: We recommend the Organization review its current policies and implement changes to ensure documentation is retained for all disbursements. Views of Responsible Officials: While the finance team prides themselves on a high degree of accuracy, there are inherent complexities in transitioning to a new system and implementing new policies. The accounts payable department at Mosaic Community Services transitioned to a shared service model under Sheppard Pratt in FY22. Also, Sheppard Pratt implemented a new ERP (General Ledger) system and the accounts payable team implemented a new platform with Truist for credit card transactions. Supporting documentation for cash disbursements is currently maintained electronically in both systems. This is a major step forward for integration of the finance function.

Criteria: The Organization is responsible for ensuring employees are paid for hours worked as reported on their timesheets at applicable approved personnel rates, and charged to the correct program. Condition: During our testing of payroll transactions of this award, we noted three instances within our sample where the employee?s paycheck amount does not equate to the amount charged to the program. All three discrepancies occurred within the same payroll period and the differences were in relation to the pay of on-call hours, see details below; ? Program charged $50 for 1 hour of on-call time versus employee receiving $25 on paycheck ? Program charged $170 for 5 hours of on-call time versus employee receiving $92.50 on paycheck ? Program charged $330 for 9 hours of on-call time versus employee receiving $135 on paycheck In total, the program was charged $550 for the above on-call hours and the applicable employees were paid $252.50, a difference of $297.50. Cause: The Organization utilizes two systems to process payroll; the first being the HR/Timekeeping system (Unanet) and the second being the payroll system (Empath). These two systems are not integrated. For example, if a pay rate was changed in Empath, the same change needed to occur in Unanet. In the above instances, there was discrepancy between hours/rates of on-call time amongst the two systems and the grant was billed from Unanet and employees paid from Empath. Effect: It appears the program may have been overbilled due to the discrepancy between what the employees were actually paid and what was billed to the grantor. It is not clear if this was an isolated instance or occurred at other times during the year. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization ensure systems are operating as expected to ensure grant billings agree to the underlying accounting records. Views of Responsible Officials: In FY22, Family Services utilized a separate timekeeping system and payroll system with data being manually imported in the general ledger system. While payroll and finance teams pride themselves on a high degree of accuracy, there are inherent complexities in operating multiple systems and the manual process is prone to human error. On August 1st, 2023, Sheppard Pratt implemented UKG HRIS system with integrated timekeeping and payroll, with reporting that integrates seamlessly with the ERP (General Ledger) system, Oracle. This is a major step forward for integration of the finance and payroll function and will greatly reduce manual processing and errors.

Finding 2022-004 ? Late Filing of Uniform Guidance Report Assistance Listing #: All Federal Award: All Recipient Organization: All Criteria: The Uniform Guidance requires submission of the audited financial statements and report on the Schedule of Expenditures Federal Awards, as well as submission of the Data Collection Form within nine months after the organization?s fiscal year end. Condition: The reporting package and submission of the Data Collection Form to the Federal Audit Clearinghouse was not completed and filed by March 31, 2023. Cause: In order to complete our various testing of the major programs, additional time was needed by the Organization to produce the requested records. Ultimately, it was decided the records could not be located and the best course was to complete the audit. This resulted in the late filing and Finding 2022-003 above. Effect: The Organization will not qualify as a low risk auditee for the next two fiscal years due to the late filing of the required report. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current policies to ensure the audited financial statements, report on the Schedule of Expenditures of Federal Awards and the submission of the Data Collection Form be submitted annually on a timely basis.

Finding 2022-004 ? Late Filing of Uniform Guidance Report Assistance Listing #: All Federal Award: All Recipient Organization: All Criteria: The Uniform Guidance requires submission of the audited financial statements and report on the Schedule of Expenditures Federal Awards, as well as submission of the Data Collection Form within nine months after the organization?s fiscal year end. Condition: The reporting package and submission of the Data Collection Form to the Federal Audit Clearinghouse was not completed and filed by March 31, 2023. Cause: In order to complete our various testing of the major programs, additional time was needed by the Organization to produce the requested records. Ultimately, it was decided the records could not be located and the best course was to complete the audit. This resulted in the late filing and Finding 2022-003 above. Effect: The Organization will not qualify as a low risk auditee for the next two fiscal years due to the late filing of the required report. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current policies to ensure the audited financial statements, report on the Schedule of Expenditures of Federal Awards and the submission of the Data Collection Form be submitted annually on a timely basis.

Finding 2022-004 ? Late Filing of Uniform Guidance Report Assistance Listing #: All Federal Award: All Recipient Organization: All Criteria: The Uniform Guidance requires submission of the audited financial statements and report on the Schedule of Expenditures Federal Awards, as well as submission of the Data Collection Form within nine months after the organization?s fiscal year end. Condition: The reporting package and submission of the Data Collection Form to the Federal Audit Clearinghouse was not completed and filed by March 31, 2023. Cause: In order to complete our various testing of the major programs, additional time was needed by the Organization to produce the requested records. Ultimately, it was decided the records could not be located and the best course was to complete the audit. This resulted in the late filing and Finding 2022-003 above. Effect: The Organization will not qualify as a low risk auditee for the next two fiscal years due to the late filing of the required report. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current policies to ensure the audited financial statements, report on the Schedule of Expenditures of Federal Awards and the submission of the Data Collection Form be submitted annually on a timely basis.

Finding 2022-004 ? Late Filing of Uniform Guidance Report Assistance Listing #: All Federal Award: All Recipient Organization: All Criteria: The Uniform Guidance requires submission of the audited financial statements and report on the Schedule of Expenditures Federal Awards, as well as submission of the Data Collection Form within nine months after the organization?s fiscal year end. Condition: The reporting package and submission of the Data Collection Form to the Federal Audit Clearinghouse was not completed and filed by March 31, 2023. Cause: In order to complete our various testing of the major programs, additional time was needed by the Organization to produce the requested records. Ultimately, it was decided the records could not be located and the best course was to complete the audit. This resulted in the late filing and Finding 2022-003 above. Effect: The Organization will not qualify as a low risk auditee for the next two fiscal years due to the late filing of the required report. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current policies to ensure the audited financial statements, report on the Schedule of Expenditures of Federal Awards and the submission of the Data Collection Form be submitted annually on a timely basis.

Finding 2022-004 ? Late Filing of Uniform Guidance Report Assistance Listing #: All Federal Award: All Recipient Organization: All Criteria: The Uniform Guidance requires submission of the audited financial statements and report on the Schedule of Expenditures Federal Awards, as well as submission of the Data Collection Form within nine months after the organization?s fiscal year end. Condition: The reporting package and submission of the Data Collection Form to the Federal Audit Clearinghouse was not completed and filed by March 31, 2023. Cause: In order to complete our various testing of the major programs, additional time was needed by the Organization to produce the requested records. Ultimately, it was decided the records could not be located and the best course was to complete the audit. This resulted in the late filing and Finding 2022-003 above. Effect: The Organization will not qualify as a low risk auditee for the next two fiscal years due to the late filing of the required report. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current policies to ensure the audited financial statements, report on the Schedule of Expenditures of Federal Awards and the submission of the Data Collection Form be submitted annually on a timely basis.

Criteria: The Organization?s policies over payroll indicate that completed timesheets are approved by the employee and then submitted electronically to the employee?s supervisor for approval. Upon submission of the timesheet to the employee?s supervisor, the supervisor will verify the accuracy of the timesheet and either approve as is, edit and approve, or contact the employee to make corrections. The employee can go back into the timesheet and make the required corrections and then must re-submit to his or her supervisor for final approval until a certain point at which the timesheet review process is locked. The Payroll Specialist reviews all approved timesheets to ensure accuracy and follows-up on any timesheets not yet complete and/or approved. If any timesheets remain outstanding as of Friday, the Payroll Specialist will lock the timesheets in order to review and pay employees for the time that has been submitted to allow for proper processing time. Condition: During our testing of payroll transactions, we noted 13 of 40 employee timesheets that were not signed at all, or in its entirety by the employee?s supervisor, per our review of the Dayforce Authorization Report for the applicable payroll period tested. Cause: Per inquiry, it appears the missing approvals were an oversight by the applicable supervisor before the timesheets became locked by the Payroll Specialist. Effect: Without proper oversight and approval of employee hours by a supervisor a higher risk exists that time recorded by the employee may be incomplete or inaccurate. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization follow its stated internal control policies over payroll to ensure timesheets are adequately reviewed and approved. Views of Responsible Officials: While the Mosaic policy indicates that all time sheets are approved by the employee and the supervisor, there are occasions where that is not possible, and the payroll clerk must approve in order to process payroll. Tracking employee approvals before processing pay is not possible in an organization with 5,000 employees. Currently Mosaic and all Sheppard Pratt Foundation subsidiary corporations are following the Sheppard Pratt policies which do not specify payroll approval requirements.

Criteria: The Organization is responsible for ensuring there is adequate controls over its cash disbursements process and adequate documentation is maintained to support its disbursements. Condition: During our testing of forty haphazardly selected client assistance expenditures, an invoice or other supporting documentation could not be provided for six selected transactions, for a total amount of $27,147.95. Five of the six expenditures were made electronically via a debit/credit card. Cause: Per inquiry, the cause is unknown and appears to be an oversight and/or lack of proper record keeping. Effect: Without adequate supporting documentation for disbursements, the Organization is at a heightened risk that expenditures are being made and charged to the federal award that are not allowed and/or for an eligible participant of the program. Questioned Costs: $27,147.95 Repeat Finding: No Recommendation: We recommend the Organization review its current policies and implement changes to ensure documentation is retained for all disbursements. Views of Responsible Officials: While the finance team prides themselves on a high degree of accuracy, there are inherent complexities in transitioning to a new system and implementing new policies. The accounts payable department at Mosaic Community Services transitioned to a shared service model under Sheppard Pratt in FY22. Also, Sheppard Pratt implemented a new ERP (General Ledger) system and the accounts payable team implemented a new platform with Truist for credit card transactions. Supporting documentation for cash disbursements is currently maintained electronically in both systems. This is a major step forward for integration of the finance function.

Criteria: The Organization is responsible for ensuring employees are paid for hours worked as reported on their timesheets at applicable approved personnel rates, and charged to the correct program. Condition: During our testing of payroll transactions of this award, we noted three instances within our sample where the employee?s paycheck amount does not equate to the amount charged to the program. All three discrepancies occurred within the same payroll period and the differences were in relation to the pay of on-call hours, see details below; ? Program charged $50 for 1 hour of on-call time versus employee receiving $25 on paycheck ? Program charged $170 for 5 hours of on-call time versus employee receiving $92.50 on paycheck ? Program charged $330 for 9 hours of on-call time versus employee receiving $135 on paycheck In total, the program was charged $550 for the above on-call hours and the applicable employees were paid $252.50, a difference of $297.50. Cause: The Organization utilizes two systems to process payroll; the first being the HR/Timekeeping system (Unanet) and the second being the payroll system (Empath). These two systems are not integrated. For example, if a pay rate was changed in Empath, the same change needed to occur in Unanet. In the above instances, there was discrepancy between hours/rates of on-call time amongst the two systems and the grant was billed from Unanet and employees paid from Empath. Effect: It appears the program may have been overbilled due to the discrepancy between what the employees were actually paid and what was billed to the grantor. It is not clear if this was an isolated instance or occurred at other times during the year. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization ensure systems are operating as expected to ensure grant billings agree to the underlying accounting records. Views of Responsible Officials: In FY22, Family Services utilized a separate timekeeping system and payroll system with data being manually imported in the general ledger system. While payroll and finance teams pride themselves on a high degree of accuracy, there are inherent complexities in operating multiple systems and the manual process is prone to human error. On August 1st, 2023, Sheppard Pratt implemented UKG HRIS system with integrated timekeeping and payroll, with reporting that integrates seamlessly with the ERP (General Ledger) system, Oracle. This is a major step forward for integration of the finance and payroll function and will greatly reduce manual processing and errors.

Finding 2022-004 ? Late Filing of Uniform Guidance Report Assistance Listing #: All Federal Award: All Recipient Organization: All Criteria: The Uniform Guidance requires submission of the audited financial statements and report on the Schedule of Expenditures Federal Awards, as well as submission of the Data Collection Form within nine months after the organization?s fiscal year end. Condition: The reporting package and submission of the Data Collection Form to the Federal Audit Clearinghouse was not completed and filed by March 31, 2023. Cause: In order to complete our various testing of the major programs, additional time was needed by the Organization to produce the requested records. Ultimately, it was decided the records could not be located and the best course was to complete the audit. This resulted in the late filing and Finding 2022-003 above. Effect: The Organization will not qualify as a low risk auditee for the next two fiscal years due to the late filing of the required report. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current policies to ensure the audited financial statements, report on the Schedule of Expenditures of Federal Awards and the submission of the Data Collection Form be submitted annually on a timely basis.

Finding 2022-004 ? Late Filing of Uniform Guidance Report Assistance Listing #: All Federal Award: All Recipient Organization: All Criteria: The Uniform Guidance requires submission of the audited financial statements and report on the Schedule of Expenditures Federal Awards, as well as submission of the Data Collection Form within nine months after the organization?s fiscal year end. Condition: The reporting package and submission of the Data Collection Form to the Federal Audit Clearinghouse was not completed and filed by March 31, 2023. Cause: In order to complete our various testing of the major programs, additional time was needed by the Organization to produce the requested records. Ultimately, it was decided the records could not be located and the best course was to complete the audit. This resulted in the late filing and Finding 2022-003 above. Effect: The Organization will not qualify as a low risk auditee for the next two fiscal years due to the late filing of the required report. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current policies to ensure the audited financial statements, report on the Schedule of Expenditures of Federal Awards and the submission of the Data Collection Form be submitted annually on a timely basis.

Finding 2022-004 ? Late Filing of Uniform Guidance Report Assistance Listing #: All Federal Award: All Recipient Organization: All Criteria: The Uniform Guidance requires submission of the audited financial statements and report on the Schedule of Expenditures Federal Awards, as well as submission of the Data Collection Form within nine months after the organization?s fiscal year end. Condition: The reporting package and submission of the Data Collection Form to the Federal Audit Clearinghouse was not completed and filed by March 31, 2023. Cause: In order to complete our various testing of the major programs, additional time was needed by the Organization to produce the requested records. Ultimately, it was decided the records could not be located and the best course was to complete the audit. This resulted in the late filing and Finding 2022-003 above. Effect: The Organization will not qualify as a low risk auditee for the next two fiscal years due to the late filing of the required report. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current policies to ensure the audited financial statements, report on the Schedule of Expenditures of Federal Awards and the submission of the Data Collection Form be submitted annually on a timely basis.

Finding 2022-004 ? Late Filing of Uniform Guidance Report Assistance Listing #: All Federal Award: All Recipient Organization: All Criteria: The Uniform Guidance requires submission of the audited financial statements and report on the Schedule of Expenditures Federal Awards, as well as submission of the Data Collection Form within nine months after the organization?s fiscal year end. Condition: The reporting package and submission of the Data Collection Form to the Federal Audit Clearinghouse was not completed and filed by March 31, 2023. Cause: In order to complete our various testing of the major programs, additional time was needed by the Organization to produce the requested records. Ultimately, it was decided the records could not be located and the best course was to complete the audit. This resulted in the late filing and Finding 2022-003 above. Effect: The Organization will not qualify as a low risk auditee for the next two fiscal years due to the late filing of the required report. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current policies to ensure the audited financial statements, report on the Schedule of Expenditures of Federal Awards and the submission of the Data Collection Form be submitted annually on a timely basis.

Finding 2022-004 ? Late Filing of Uniform Guidance Report Assistance Listing #: All Federal Award: All Recipient Organization: All Criteria: The Uniform Guidance requires submission of the audited financial statements and report on the Schedule of Expenditures Federal Awards, as well as submission of the Data Collection Form within nine months after the organization?s fiscal year end. Condition: The reporting package and submission of the Data Collection Form to the Federal Audit Clearinghouse was not completed and filed by March 31, 2023. Cause: In order to complete our various testing of the major programs, additional time was needed by the Organization to produce the requested records. Ultimately, it was decided the records could not be located and the best course was to complete the audit. This resulted in the late filing and Finding 2022-003 above. Effect: The Organization will not qualify as a low risk auditee for the next two fiscal years due to the late filing of the required report. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current policies to ensure the audited financial statements, report on the Schedule of Expenditures of Federal Awards and the submission of the Data Collection Form be submitted annually on a timely basis.