Audit 399020

Federal Program Information: Funding agency: Department of the Interior - Bureau of Indian Affairs Title: Endangered Species on Indian Lands AL number: 15.051 Award year and number: 2023 A23AV00371 Criteria or Specific Requirement: The grant award agreement requires semi-annual financial reporting to be submitted to the awarding agency within 25 days after the end of the semi-annual period. Condition: The Organization did not provide evidence the SF-425s were completed and submitted within the required due date. Context: We requested to review a copy of the semi-annual grant reports for the 15.051 program and the Organization was unable to produce evidence the reports were prepared and submitted timely. Questioned Costs: None. Effect: The major program is out of compliance with reporting requirements and the Organization may not be allowed to draw down funding in the payment management system until reporting is caught up on semi-annual reports. Cause: The Organization does not have adequate internal controls in place for reporting. Repeat: Yes - Years as Repeat Finding: Three Auditor's Recommendation: The Organization should create internal controls over reporting that require submitting reports by reporting due date and provide support for balances within the report. View of Responsible Officials: Establish and maintain robust internal controls to ensure timely and accurate grant reporting.

Federal Program Information: Funding agency: Department of the Interior - Bureau of Indian Affairs Title: Endangered Species on Indian Lands AL number: 15.051 Award year and number: 2023 A23AV00371 Criteria or Specific Requirement: Internal control standards require that all employee pay rates be documented, formally approved by management, and retained in the employee personnel file. This documentation serves as the basis for payroll processing and provides evidence of proper authorization. Condition: During our Allowable Cost/Activities Allowed payroll testing, we noted that the Organization was unable to provide documentation evidencing management's approval of the pay rate for employees included in our sample. While the employees' gross pay was consistent with payroll records, we identified 12 instances where we were unable to obtain personnel action forms, offer letters, or equivalent documentation to substantiate the authorized pay rates. Context: We tested 25 payroll transactions to verify that employee compensation was calculated in accordance with authorized pay rates approved by management. Questioned Costs: None Effect: Without evidence of management approval for pay rates, the Organization is exposed to an increased risk of payroll errors or unauthorized compensation changes going undetected. This could result in financial misstatements, potential regulatory noncompliance, or employee disputes. Cause: The Organization is not consistently following its internal controls over payroll. Repeat: No Auditor's Recommendations: We recommend management establish and enforce a policy requiring that all changes to employee pay rates be supported by formal documentation, authorized by appropriate management, and retained in the employee personnel file. Management should perform reviews to confirm that documentation is complete and maintained in accordance with policy. View of Responsible Officials: The Organization has transitioned to new payroll software that facilitates online timecard submission and third-party processing. Furthermore, forms for payroll rate approvals and changes are being implemented.