Audit 361119

Criteria: The Organization uses a form to request overtime hours. This form is supposed to be approved before the employee works the extra hours. The Organization has established internal control policies and procedures requiring that all employee timesheets be signed by the employee and approved by the immediate supervisor. Approved timesheets must then be submitted to the Accounts Payable Clerk – Payroll, who is responsible for verifying the hours worked against internal records. The Organization's policy further requires that payroll authorizations be properly documented and retained in each employee’s personnel file. Condition: The Organization’s policies do not address approval of overtime, which person should approve overtime, when it should be approved, and who can approve if the designated person is on leave. During our testing of payroll transactions, we noted the following exceptions: • For 9 out of 40 items tested (23%), the overtime forms were approved by the Executive Director after the employee already worked the extra hours. • For 3 out of 40 items tested (8%), the overtime forms lacked documentation of approval. Cause: Personnel responsible for monitoring and reviewing payroll timesheets and supporting documentation did not adequately ensure that all overtime forms were properly reviewed and approved prior to payroll processing. Effect: The Organization did not comply with its internal control requirements regarding payroll processing. The absence of proper and timely approvals increases the risk of processing unauthorized or inaccurate payroll disbursements.

Criteria: Procurement practices should be supported by complete and properly approved documentation in accordance with internal control standards and best practices. An effective control environment includes formal policies and procedures that provide clear guidance to staff and ensure consistency and accountability in procurement activities. Condition: Of the 31 items tested, 4 transactions or 13% of the sample, included purchase requisition forms that lacked documentation of approval from required personnel. This includes one form without Executive Director’s approval and 3 forms without indication that funds were available. Cause: Although the purchase requisition form includes designated fields for required approvals, the Organization does not have a formal, written policy or procedure governing the proper completion and approval of these forms. As a result, some requisitions were either not fully completed or lacked signatures from designated approvers. The absence of enforceable procedures contributes to inconsistent practices and increases the risk of unauthorized purchases. Effect: The absence of a formal written policy or procedure has led to inconsistent completion and approval of purchase requisition forms. This condition increases the risk of: • Unauthorized or improper procurement activities, • Noncompliance with internal control expectations, • Weakening of oversight and accountability in purchasing decisions, • Potential misuse of funds or circumvention of procurement priorities.

Criteria: The Organization uses a form to request overtime hours. This form is supposed to be approved before the employee works the extra hours. The Organization has established internal control policies and procedures requiring that all employee timesheets be signed by the employee and approved by the immediate supervisor. Approved timesheets must then be submitted to the Accounts Payable Clerk – Payroll, who is responsible for verifying the hours worked against internal records. The Organization's policy further requires that payroll authorizations be properly documented and retained in each employee’s personnel file. Condition: The Organization’s policies do not address approval of overtime, which person should approve overtime, when it should be approved, and who can approve if the designated person is on leave. During our testing of payroll transactions, we noted the following exceptions: • For 9 out of 40 items tested (23%), the overtime forms were approved by the Executive Director after the employee already worked the extra hours. • For 3 out of 40 items tested (8%), the overtime forms lacked documentation of approval. Cause: Personnel responsible for monitoring and reviewing payroll timesheets and supporting documentation did not adequately ensure that all overtime forms were properly reviewed and approved prior to payroll processing. Effect: The Organization did not comply with its internal control requirements regarding payroll processing. The absence of proper and timely approvals increases the risk of processing unauthorized or inaccurate payroll disbursements.

Criteria: Procurement practices should be supported by complete and properly approved documentation in accordance with internal control standards and best practices. An effective control environment includes formal policies and procedures that provide clear guidance to staff and ensure consistency and accountability in procurement activities. Condition: Of the 31 items tested, 4 transactions or 13% of the sample, included purchase requisition forms that lacked documentation of approval from required personnel. This includes one form without Executive Director’s approval and 3 forms without indication that funds were available. Cause: Although the purchase requisition form includes designated fields for required approvals, the Organization does not have a formal, written policy or procedure governing the proper completion and approval of these forms. As a result, some requisitions were either not fully completed or lacked signatures from designated approvers. The absence of enforceable procedures contributes to inconsistent practices and increases the risk of unauthorized purchases. Effect: The absence of a formal written policy or procedure has led to inconsistent completion and approval of purchase requisition forms. This condition increases the risk of: • Unauthorized or improper procurement activities, • Noncompliance with internal control expectations, • Weakening of oversight and accountability in purchasing decisions, • Potential misuse of funds or circumvention of procurement priorities.