Audit 390597

2025 - 001 – Timely Review of Timesheets Federal Agency: U.S. Department of Health and Human Services Federal Program Names: Head Start Cluster and Social Services Block Grant Assistance Listing Numbers: 93.600 and 93.667 Pass-Through Agencies: N/A, and Illinois Department of Human Services Pass-Through Numbers: N/A, and FCSDS06222 and FCSDS06149 Award Periods: Various: January 1, 2024 through September 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: Under allowable cost/cost principles, an organization in receipt of federal funding is required tohave a system of controls in place to safeguard assets and ensure that only allowable costs are charged to federal programs. 2 CFR Part 200 states that changes to awards for salaries and wages are to be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: - AL93.600: In testing a sample of 40 payroll items, we identified 3 employees whose timesheets were not approved. In replace of timesheet approvals were timesheet approval forms noting the timesheets were approved ~6 - ~13 months after the pay period tested. - AL93.667: In testing a sample of 40 payroll items, we identified 7 employees whose timesheets were not approved. In replace of timesheet approvals were timesheet approval forms noting the timesheets were approved ~3 - ~13 months after the pay period tested. - AL93.667: In testing a sample of 40 period of performance items for the beginning of the period of performance, we identified 3 employees whose timesheets were not approved. In replace of timesheet approvals were timesheet approval forms noting the timesheets were approved ~10 - ~13 months after the pay period tested. Questioned Costs: None. Context: Payroll timesheets are not being properly reviewed on a timely basis. Cause: Payroll timesheets are not being properly reviewed on a timely basis. Effect: Inaccurate payroll costs may be charged to federal programs. Repeat Finding: This is a not repeat finding. Recommendation: Policies and procedures over the processing of payroll transactions should include timely review and approval of the payroll transactions through approval of the timesheets. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding. Action taken in response to finding: In fiscal year 2025, Start Early used a payroll system that, after a pay period was locked for processing, would not allow supervisors who missed timecard approvals to go back and approve after the period was locked. As a result, Start Early used a manual, time-consuming process to receive these approvals outside of the payroll system. While all approvals were received via this process, due to the manual nature, not all approvals were received timely. In early fiscal year 2026, Start Early changed to a new payroll system which allows for supervisors to go back to prior periods for their sign offs. Start Early will implement a process to, no less than monthly, remind supervisors that had previously missed their timecard approvals to go back and approve to ensure timeliness. Name(s) of the contact person(s) responsible for corrective action: David Paul, Controller Planned completion date for corrective action plan: The corrective action plan detailed above is being implemented by June 30, 2026.