Audit 369353

Payroll Documentation and Approval Deficiencies Condition: During our testing of payroll-related records, deficiencies were identified in the documentation and approval processes for both pay rates and employee timecards. Specifically, in one instance there was no documentation in employee file of approved pay rate, and for a specific pay period following the client’s mid-year transition to a new payroll software system, approved employee timecards were unavailable for six employees. These issues resulted in a lack of approved pay-rate documentation and missing evidence of supervisory approval for hours worked. Criteria: Organization policy and internal control best practices require that (1) all employee pay rates be approved by authorized personnel and documented prior to implementation, and (2) all employee timecards be reviewed and approved by supervisors prior to payroll processing. These controls are essential for ensuring accurate, authorized wage payments and compliance with labor regulations. Cause: The identified deficiencies were due to (1) the termination of an employee during the audit year and the subsequent lack of retention of their employment file, and (2) a temporary disruption in timekeeping and approval workflows resulting from the client’s transition to a new payroll software system, which led to the inability to migrate or retain timecard approvals for the affected pay period. Effect: The absence of approved pay rate and timecard documentation increases the risk of payroll inaccuracies, unauthorized payments, and non-compliance with labor regulations. It also limits the organization’s ability to validate payroll transactions during audits or employee disputes. Recommendation: Management should establish and enforce formal processes for documenting pay rate and timecard approvals. These procedures should include written authorization by appropriate personnel, retention of approval records in a centralized and accessible location, and adherence to document retention policies. Additionally, management should implement measures to ensure continuity of payroll documentation during system transitions, such as retaining historical records, validating data migration, and establishing contingency plans to maintain compliance. Views of Responsible Officials: See attached response

USDA Food Distribution and Authorized Signers Condition: During our audit, it was identified that the Organization did not consistently obtain signatures from "approved shoppers" for USDA food products. Additionally, in at least one instance, the individual signing for a USDA distribution was not listed as an authorized signer. These issues indicate a lack of adherence to required procedures for verifying and documenting authorized individuals who pick up USDA food products. Criteria: The Organization is required to maintain an "approved shopper" list for each partner agency, specifying who is authorized to pick up USDA food products. Furthermore, the Organization must ensure that those signing for deliveries are included on the approved list and that their signatures are properly obtained and cross-referenced. Cause: Staff turnover within the Organization led to lapses in following established procedures, resulting in missed steps such as obtaining and verifying signatures against the approved shopper list. Effect: As a result of these lapses, signatures were not consistently collected or compared to the approved shopper list, increasing the risk that unauthorized individuals may have received USDA food products and that proper records of distribution were not maintained. Recommendation: We recommend that the Organization provide comprehensive training to all relevant staff on the correct procedures for obtaining and cross-referencing signatures for USDA food product distribution. This will help ensure compliance with requirements and improve the integrity of the distribution process. Views of Responsible Officials: See attached response. See