2022-003 Internal Controls over Payroll Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance Severity of Deficiency: Material Weakness Federal Agency: U.S. Department of the Treasury and U.S. Department of Health and Human Services Program: 21.027 COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds; 93.563 Child Support Enforcement; 93.778 Medical Assistance Program Award Number and Year: Assistance Listing Number Award Number Year 21.027 Federal Direct 2022 93.563 2201MNCEST 2201MNCSES 2022 93.778 2205MN5ADM 2205MN5MAP 2022 Pass-Through Agency: Assistance Listing Number Pass-Through Agency 21.027 Not applicable 93.563 Minnesota Department of Human Services 93.778 Minnesota Department of Human Services Questioned Costs: None Criteria: Management is responsible for designing and implementing internal controls over accounting processes, including payroll. To obtain greater assurance that errors or fraud in payroll are prevented, detected, and corrected in a timely manner, payroll disbursements made to employees should be supported by appropriate supervisory authorization. Furthermore, Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: During testing of internal controls over payroll processing, the County was unable to provide evidence of assigned supervisory review or approval of timesheets for payroll processed during fourth quarter. For each major federal program audit, the fourth quarter payroll expenditures selected for testing contained no evidence of supervisory review or approval. Context: Beginning September 24, 2022, with the implementation of the new time and attendance and payroll system, Workday, Human Resources began mass approving timesheets. Once posted, the mass approval overrides all other approvals in the system making it impossible to identify which timesheets were reviewed and approved by assigned supervisors and which were not. The sample sizes were based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The lack of assigned supervisory review and approval of timesheets has created errors in payroll transactions resulting in an increased number of corrections and supplemental pay needing to be processed. Cause: Human Resources began mass approving timesheets during the implementation to Workday as a way to speed up the processing of payroll. At the same time the County implemented Workday, Human Resources experienced a large amount of staff turnover. The increase in staff turnover combined with implementing Workday, caused significant internal controls to be overlooked. Recommendation: We recommend the County discontinue the practice of mass approving timesheets and design and implement procedures that requires each timesheet to be reviewed and approved within the system by the assigned supervisors. View of Responsible Official: Acknowledge
2022-003 Internal Controls over Payroll Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance Severity of Deficiency: Material Weakness Federal Agency: U.S. Department of the Treasury and U.S. Department of Health and Human Services Program: 21.027 COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds; 93.563 Child Support Enforcement; 93.778 Medical Assistance Program Award Number and Year: Assistance Listing Number Award Number Year 21.027 Federal Direct 2022 93.563 2201MNCEST 2201MNCSES 2022 93.778 2205MN5ADM 2205MN5MAP 2022 Pass-Through Agency: Assistance Listing Number Pass-Through Agency 21.027 Not applicable 93.563 Minnesota Department of Human Services 93.778 Minnesota Department of Human Services Questioned Costs: None Criteria: Management is responsible for designing and implementing internal controls over accounting processes, including payroll. To obtain greater assurance that errors or fraud in payroll are prevented, detected, and corrected in a timely manner, payroll disbursements made to employees should be supported by appropriate supervisory authorization. Furthermore, Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: During testing of internal controls over payroll processing, the County was unable to provide evidence of assigned supervisory review or approval of timesheets for payroll processed during fourth quarter. For each major federal program audit, the fourth quarter payroll expenditures selected for testing contained no evidence of supervisory review or approval. Context: Beginning September 24, 2022, with the implementation of the new time and attendance and payroll system, Workday, Human Resources began mass approving timesheets. Once posted, the mass approval overrides all other approvals in the system making it impossible to identify which timesheets were reviewed and approved by assigned supervisors and which were not. The sample sizes were based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The lack of assigned supervisory review and approval of timesheets has created errors in payroll transactions resulting in an increased number of corrections and supplemental pay needing to be processed. Cause: Human Resources began mass approving timesheets during the implementation to Workday as a way to speed up the processing of payroll. At the same time the County implemented Workday, Human Resources experienced a large amount of staff turnover. The increase in staff turnover combined with implementing Workday, caused significant internal controls to be overlooked. Recommendation: We recommend the County discontinue the practice of mass approving timesheets and design and implement procedures that requires each timesheet to be reviewed and approved within the system by the assigned supervisors. View of Responsible Official: Acknowledge
2022-003 Internal Controls over Payroll Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance Severity of Deficiency: Material Weakness Federal Agency: U.S. Department of the Treasury and U.S. Department of Health and Human Services Program: 21.027 COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds; 93.563 Child Support Enforcement; 93.778 Medical Assistance Program Award Number and Year: Assistance Listing Number Award Number Year 21.027 Federal Direct 2022 93.563 2201MNCEST 2201MNCSES 2022 93.778 2205MN5ADM 2205MN5MAP 2022 Pass-Through Agency: Assistance Listing Number Pass-Through Agency 21.027 Not applicable 93.563 Minnesota Department of Human Services 93.778 Minnesota Department of Human Services Questioned Costs: None Criteria: Management is responsible for designing and implementing internal controls over accounting processes, including payroll. To obtain greater assurance that errors or fraud in payroll are prevented, detected, and corrected in a timely manner, payroll disbursements made to employees should be supported by appropriate supervisory authorization. Furthermore, Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: During testing of internal controls over payroll processing, the County was unable to provide evidence of assigned supervisory review or approval of timesheets for payroll processed during fourth quarter. For each major federal program audit, the fourth quarter payroll expenditures selected for testing contained no evidence of supervisory review or approval. Context: Beginning September 24, 2022, with the implementation of the new time and attendance and payroll system, Workday, Human Resources began mass approving timesheets. Once posted, the mass approval overrides all other approvals in the system making it impossible to identify which timesheets were reviewed and approved by assigned supervisors and which were not. The sample sizes were based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The lack of assigned supervisory review and approval of timesheets has created errors in payroll transactions resulting in an increased number of corrections and supplemental pay needing to be processed. Cause: Human Resources began mass approving timesheets during the implementation to Workday as a way to speed up the processing of payroll. At the same time the County implemented Workday, Human Resources experienced a large amount of staff turnover. The increase in staff turnover combined with implementing Workday, caused significant internal controls to be overlooked. Recommendation: We recommend the County discontinue the practice of mass approving timesheets and design and implement procedures that requires each timesheet to be reviewed and approved within the system by the assigned supervisors. View of Responsible Official: Acknowledge
2022-003 Internal Controls over Payroll Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance Severity of Deficiency: Material Weakness Federal Agency: U.S. Department of the Treasury and U.S. Department of Health and Human Services Program: 21.027 COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds; 93.563 Child Support Enforcement; 93.778 Medical Assistance Program Award Number and Year: Assistance Listing Number Award Number Year 21.027 Federal Direct 2022 93.563 2201MNCEST 2201MNCSES 2022 93.778 2205MN5ADM 2205MN5MAP 2022 Pass-Through Agency: Assistance Listing Number Pass-Through Agency 21.027 Not applicable 93.563 Minnesota Department of Human Services 93.778 Minnesota Department of Human Services Questioned Costs: None Criteria: Management is responsible for designing and implementing internal controls over accounting processes, including payroll. To obtain greater assurance that errors or fraud in payroll are prevented, detected, and corrected in a timely manner, payroll disbursements made to employees should be supported by appropriate supervisory authorization. Furthermore, Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: During testing of internal controls over payroll processing, the County was unable to provide evidence of assigned supervisory review or approval of timesheets for payroll processed during fourth quarter. For each major federal program audit, the fourth quarter payroll expenditures selected for testing contained no evidence of supervisory review or approval. Context: Beginning September 24, 2022, with the implementation of the new time and attendance and payroll system, Workday, Human Resources began mass approving timesheets. Once posted, the mass approval overrides all other approvals in the system making it impossible to identify which timesheets were reviewed and approved by assigned supervisors and which were not. The sample sizes were based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The lack of assigned supervisory review and approval of timesheets has created errors in payroll transactions resulting in an increased number of corrections and supplemental pay needing to be processed. Cause: Human Resources began mass approving timesheets during the implementation to Workday as a way to speed up the processing of payroll. At the same time the County implemented Workday, Human Resources experienced a large amount of staff turnover. The increase in staff turnover combined with implementing Workday, caused significant internal controls to be overlooked. Recommendation: We recommend the County discontinue the practice of mass approving timesheets and design and implement procedures that requires each timesheet to be reviewed and approved within the system by the assigned supervisors. View of Responsible Official: Acknowledge
2022-005 Allowable Costs/Cost Principles and Reporting Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of Health and Human Services Program: 93.778 Medical Assistance Program Award Number and Year: 2205MN5ADM, 2205MN5MAP; 2022 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. For County federal awards received from the Minnesota Department of Human Services (DHS), internal control should be established and maintained to provide assurance that program reports submitted to DHS are completed accurately and in accordance with report instructions. As part of the County?s reporting requirements for the Medical Assistance Program, the County submits to DHS the quarterly Social Service Fund Report (DHS-2556) and the Income Maintenance Quarterly Expense Report (DHS-2550). Condition: Federal revenue offsets from the State and Local Fiscal Recovery Funds (ALN 21.027) were omitted from all quarterly DHS-2550 and DHS-2556 reports submitted to DHS during 2022. This resulted in an understatement of federal revenue offsets of $197,934 on the DHS-2550 and $752,717 on the DHS-2556 reports for the year. Questioned Costs: $950,651 Context: The DHS relies on accurate reporting of program costs to ensure that resulting grant funds paid to the County are for applicable federal program activities/costs and provide detailed information necessary for maintaining proper oversight over federal programs. Effect: Errors in the submission of costs on the quarterly reports can impair the DHS?s ability to provide required oversight over federal programs and can result in the County receiving either more or less federal funds than allowed based on the actual underlying activity. Cause: The County neglected to move the State and Local Fiscal Recovery Funds (ALN 21.027) revenue from the General Fund to the Human Services fund at the time the expenditures occurred resulting in an adjustment for financial reporting and omission of the federal revenue offset reported to DHS. Recommendation: We recommend Anoka County implement controls that ensure all DHS reports include federal revenue offsets and are completed accurately in accordance with DHS guidance. View of Responsible Official: Acknowledge
2022-003 Internal Controls over Payroll Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance Severity of Deficiency: Material Weakness Federal Agency: U.S. Department of the Treasury and U.S. Department of Health and Human Services Program: 21.027 COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds; 93.563 Child Support Enforcement; 93.778 Medical Assistance Program Award Number and Year: Assistance Listing Number Award Number Year 21.027 Federal Direct 2022 93.563 2201MNCEST 2201MNCSES 2022 93.778 2205MN5ADM 2205MN5MAP 2022 Pass-Through Agency: Assistance Listing Number Pass-Through Agency 21.027 Not applicable 93.563 Minnesota Department of Human Services 93.778 Minnesota Department of Human Services Questioned Costs: None Criteria: Management is responsible for designing and implementing internal controls over accounting processes, including payroll. To obtain greater assurance that errors or fraud in payroll are prevented, detected, and corrected in a timely manner, payroll disbursements made to employees should be supported by appropriate supervisory authorization. Furthermore, Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: During testing of internal controls over payroll processing, the County was unable to provide evidence of assigned supervisory review or approval of timesheets for payroll processed during fourth quarter. For each major federal program audit, the fourth quarter payroll expenditures selected for testing contained no evidence of supervisory review or approval. Context: Beginning September 24, 2022, with the implementation of the new time and attendance and payroll system, Workday, Human Resources began mass approving timesheets. Once posted, the mass approval overrides all other approvals in the system making it impossible to identify which timesheets were reviewed and approved by assigned supervisors and which were not. The sample sizes were based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The lack of assigned supervisory review and approval of timesheets has created errors in payroll transactions resulting in an increased number of corrections and supplemental pay needing to be processed. Cause: Human Resources began mass approving timesheets during the implementation to Workday as a way to speed up the processing of payroll. At the same time the County implemented Workday, Human Resources experienced a large amount of staff turnover. The increase in staff turnover combined with implementing Workday, caused significant internal controls to be overlooked. Recommendation: We recommend the County discontinue the practice of mass approving timesheets and design and implement procedures that requires each timesheet to be reviewed and approved within the system by the assigned supervisors. View of Responsible Official: Acknowledge
2022-005 Allowable Costs/Cost Principles and Reporting Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of Health and Human Services Program: 93.778 Medical Assistance Program Award Number and Year: 2205MN5ADM, 2205MN5MAP; 2022 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. For County federal awards received from the Minnesota Department of Human Services (DHS), internal control should be established and maintained to provide assurance that program reports submitted to DHS are completed accurately and in accordance with report instructions. As part of the County?s reporting requirements for the Medical Assistance Program, the County submits to DHS the quarterly Social Service Fund Report (DHS-2556) and the Income Maintenance Quarterly Expense Report (DHS-2550). Condition: Federal revenue offsets from the State and Local Fiscal Recovery Funds (ALN 21.027) were omitted from all quarterly DHS-2550 and DHS-2556 reports submitted to DHS during 2022. This resulted in an understatement of federal revenue offsets of $197,934 on the DHS-2550 and $752,717 on the DHS-2556 reports for the year. Questioned Costs: $950,651 Context: The DHS relies on accurate reporting of program costs to ensure that resulting grant funds paid to the County are for applicable federal program activities/costs and provide detailed information necessary for maintaining proper oversight over federal programs. Effect: Errors in the submission of costs on the quarterly reports can impair the DHS?s ability to provide required oversight over federal programs and can result in the County receiving either more or less federal funds than allowed based on the actual underlying activity. Cause: The County neglected to move the State and Local Fiscal Recovery Funds (ALN 21.027) revenue from the General Fund to the Human Services fund at the time the expenditures occurred resulting in an adjustment for financial reporting and omission of the federal revenue offset reported to DHS. Recommendation: We recommend Anoka County implement controls that ensure all DHS reports include federal revenue offsets and are completed accurately in accordance with DHS guidance. View of Responsible Official: Acknowledge
2022-003 Internal Controls over Payroll Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance Severity of Deficiency: Material Weakness Federal Agency: U.S. Department of the Treasury and U.S. Department of Health and Human Services Program: 21.027 COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds; 93.563 Child Support Enforcement; 93.778 Medical Assistance Program Award Number and Year: Assistance Listing Number Award Number Year 21.027 Federal Direct 2022 93.563 2201MNCEST 2201MNCSES 2022 93.778 2205MN5ADM 2205MN5MAP 2022 Pass-Through Agency: Assistance Listing Number Pass-Through Agency 21.027 Not applicable 93.563 Minnesota Department of Human Services 93.778 Minnesota Department of Human Services Questioned Costs: None Criteria: Management is responsible for designing and implementing internal controls over accounting processes, including payroll. To obtain greater assurance that errors or fraud in payroll are prevented, detected, and corrected in a timely manner, payroll disbursements made to employees should be supported by appropriate supervisory authorization. Furthermore, Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: During testing of internal controls over payroll processing, the County was unable to provide evidence of assigned supervisory review or approval of timesheets for payroll processed during fourth quarter. For each major federal program audit, the fourth quarter payroll expenditures selected for testing contained no evidence of supervisory review or approval. Context: Beginning September 24, 2022, with the implementation of the new time and attendance and payroll system, Workday, Human Resources began mass approving timesheets. Once posted, the mass approval overrides all other approvals in the system making it impossible to identify which timesheets were reviewed and approved by assigned supervisors and which were not. The sample sizes were based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The lack of assigned supervisory review and approval of timesheets has created errors in payroll transactions resulting in an increased number of corrections and supplemental pay needing to be processed. Cause: Human Resources began mass approving timesheets during the implementation to Workday as a way to speed up the processing of payroll. At the same time the County implemented Workday, Human Resources experienced a large amount of staff turnover. The increase in staff turnover combined with implementing Workday, caused significant internal controls to be overlooked. Recommendation: We recommend the County discontinue the practice of mass approving timesheets and design and implement procedures that requires each timesheet to be reviewed and approved within the system by the assigned supervisors. View of Responsible Official: Acknowledge
2022-003 Internal Controls over Payroll Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance Severity of Deficiency: Material Weakness Federal Agency: U.S. Department of the Treasury and U.S. Department of Health and Human Services Program: 21.027 COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds; 93.563 Child Support Enforcement; 93.778 Medical Assistance Program Award Number and Year: Assistance Listing Number Award Number Year 21.027 Federal Direct 2022 93.563 2201MNCEST 2201MNCSES 2022 93.778 2205MN5ADM 2205MN5MAP 2022 Pass-Through Agency: Assistance Listing Number Pass-Through Agency 21.027 Not applicable 93.563 Minnesota Department of Human Services 93.778 Minnesota Department of Human Services Questioned Costs: None Criteria: Management is responsible for designing and implementing internal controls over accounting processes, including payroll. To obtain greater assurance that errors or fraud in payroll are prevented, detected, and corrected in a timely manner, payroll disbursements made to employees should be supported by appropriate supervisory authorization. Furthermore, Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: During testing of internal controls over payroll processing, the County was unable to provide evidence of assigned supervisory review or approval of timesheets for payroll processed during fourth quarter. For each major federal program audit, the fourth quarter payroll expenditures selected for testing contained no evidence of supervisory review or approval. Context: Beginning September 24, 2022, with the implementation of the new time and attendance and payroll system, Workday, Human Resources began mass approving timesheets. Once posted, the mass approval overrides all other approvals in the system making it impossible to identify which timesheets were reviewed and approved by assigned supervisors and which were not. The sample sizes were based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The lack of assigned supervisory review and approval of timesheets has created errors in payroll transactions resulting in an increased number of corrections and supplemental pay needing to be processed. Cause: Human Resources began mass approving timesheets during the implementation to Workday as a way to speed up the processing of payroll. At the same time the County implemented Workday, Human Resources experienced a large amount of staff turnover. The increase in staff turnover combined with implementing Workday, caused significant internal controls to be overlooked. Recommendation: We recommend the County discontinue the practice of mass approving timesheets and design and implement procedures that requires each timesheet to be reviewed and approved within the system by the assigned supervisors. View of Responsible Official: Acknowledge
2022-003 Internal Controls over Payroll Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance Severity of Deficiency: Material Weakness Federal Agency: U.S. Department of the Treasury and U.S. Department of Health and Human Services Program: 21.027 COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds; 93.563 Child Support Enforcement; 93.778 Medical Assistance Program Award Number and Year: Assistance Listing Number Award Number Year 21.027 Federal Direct 2022 93.563 2201MNCEST 2201MNCSES 2022 93.778 2205MN5ADM 2205MN5MAP 2022 Pass-Through Agency: Assistance Listing Number Pass-Through Agency 21.027 Not applicable 93.563 Minnesota Department of Human Services 93.778 Minnesota Department of Human Services Questioned Costs: None Criteria: Management is responsible for designing and implementing internal controls over accounting processes, including payroll. To obtain greater assurance that errors or fraud in payroll are prevented, detected, and corrected in a timely manner, payroll disbursements made to employees should be supported by appropriate supervisory authorization. Furthermore, Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: During testing of internal controls over payroll processing, the County was unable to provide evidence of assigned supervisory review or approval of timesheets for payroll processed during fourth quarter. For each major federal program audit, the fourth quarter payroll expenditures selected for testing contained no evidence of supervisory review or approval. Context: Beginning September 24, 2022, with the implementation of the new time and attendance and payroll system, Workday, Human Resources began mass approving timesheets. Once posted, the mass approval overrides all other approvals in the system making it impossible to identify which timesheets were reviewed and approved by assigned supervisors and which were not. The sample sizes were based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The lack of assigned supervisory review and approval of timesheets has created errors in payroll transactions resulting in an increased number of corrections and supplemental pay needing to be processed. Cause: Human Resources began mass approving timesheets during the implementation to Workday as a way to speed up the processing of payroll. At the same time the County implemented Workday, Human Resources experienced a large amount of staff turnover. The increase in staff turnover combined with implementing Workday, caused significant internal controls to be overlooked. Recommendation: We recommend the County discontinue the practice of mass approving timesheets and design and implement procedures that requires each timesheet to be reviewed and approved within the system by the assigned supervisors. View of Responsible Official: Acknowledge
2022-003 Internal Controls over Payroll Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance Severity of Deficiency: Material Weakness Federal Agency: U.S. Department of the Treasury and U.S. Department of Health and Human Services Program: 21.027 COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds; 93.563 Child Support Enforcement; 93.778 Medical Assistance Program Award Number and Year: Assistance Listing Number Award Number Year 21.027 Federal Direct 2022 93.563 2201MNCEST 2201MNCSES 2022 93.778 2205MN5ADM 2205MN5MAP 2022 Pass-Through Agency: Assistance Listing Number Pass-Through Agency 21.027 Not applicable 93.563 Minnesota Department of Human Services 93.778 Minnesota Department of Human Services Questioned Costs: None Criteria: Management is responsible for designing and implementing internal controls over accounting processes, including payroll. To obtain greater assurance that errors or fraud in payroll are prevented, detected, and corrected in a timely manner, payroll disbursements made to employees should be supported by appropriate supervisory authorization. Furthermore, Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: During testing of internal controls over payroll processing, the County was unable to provide evidence of assigned supervisory review or approval of timesheets for payroll processed during fourth quarter. For each major federal program audit, the fourth quarter payroll expenditures selected for testing contained no evidence of supervisory review or approval. Context: Beginning September 24, 2022, with the implementation of the new time and attendance and payroll system, Workday, Human Resources began mass approving timesheets. Once posted, the mass approval overrides all other approvals in the system making it impossible to identify which timesheets were reviewed and approved by assigned supervisors and which were not. The sample sizes were based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The lack of assigned supervisory review and approval of timesheets has created errors in payroll transactions resulting in an increased number of corrections and supplemental pay needing to be processed. Cause: Human Resources began mass approving timesheets during the implementation to Workday as a way to speed up the processing of payroll. At the same time the County implemented Workday, Human Resources experienced a large amount of staff turnover. The increase in staff turnover combined with implementing Workday, caused significant internal controls to be overlooked. Recommendation: We recommend the County discontinue the practice of mass approving timesheets and design and implement procedures that requires each timesheet to be reviewed and approved within the system by the assigned supervisors. View of Responsible Official: Acknowledge
2022-005 Allowable Costs/Cost Principles and Reporting Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of Health and Human Services Program: 93.778 Medical Assistance Program Award Number and Year: 2205MN5ADM, 2205MN5MAP; 2022 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. For County federal awards received from the Minnesota Department of Human Services (DHS), internal control should be established and maintained to provide assurance that program reports submitted to DHS are completed accurately and in accordance with report instructions. As part of the County?s reporting requirements for the Medical Assistance Program, the County submits to DHS the quarterly Social Service Fund Report (DHS-2556) and the Income Maintenance Quarterly Expense Report (DHS-2550). Condition: Federal revenue offsets from the State and Local Fiscal Recovery Funds (ALN 21.027) were omitted from all quarterly DHS-2550 and DHS-2556 reports submitted to DHS during 2022. This resulted in an understatement of federal revenue offsets of $197,934 on the DHS-2550 and $752,717 on the DHS-2556 reports for the year. Questioned Costs: $950,651 Context: The DHS relies on accurate reporting of program costs to ensure that resulting grant funds paid to the County are for applicable federal program activities/costs and provide detailed information necessary for maintaining proper oversight over federal programs. Effect: Errors in the submission of costs on the quarterly reports can impair the DHS?s ability to provide required oversight over federal programs and can result in the County receiving either more or less federal funds than allowed based on the actual underlying activity. Cause: The County neglected to move the State and Local Fiscal Recovery Funds (ALN 21.027) revenue from the General Fund to the Human Services fund at the time the expenditures occurred resulting in an adjustment for financial reporting and omission of the federal revenue offset reported to DHS. Recommendation: We recommend Anoka County implement controls that ensure all DHS reports include federal revenue offsets and are completed accurately in accordance with DHS guidance. View of Responsible Official: Acknowledge
2022-003 Internal Controls over Payroll Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance Severity of Deficiency: Material Weakness Federal Agency: U.S. Department of the Treasury and U.S. Department of Health and Human Services Program: 21.027 COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds; 93.563 Child Support Enforcement; 93.778 Medical Assistance Program Award Number and Year: Assistance Listing Number Award Number Year 21.027 Federal Direct 2022 93.563 2201MNCEST 2201MNCSES 2022 93.778 2205MN5ADM 2205MN5MAP 2022 Pass-Through Agency: Assistance Listing Number Pass-Through Agency 21.027 Not applicable 93.563 Minnesota Department of Human Services 93.778 Minnesota Department of Human Services Questioned Costs: None Criteria: Management is responsible for designing and implementing internal controls over accounting processes, including payroll. To obtain greater assurance that errors or fraud in payroll are prevented, detected, and corrected in a timely manner, payroll disbursements made to employees should be supported by appropriate supervisory authorization. Furthermore, Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: During testing of internal controls over payroll processing, the County was unable to provide evidence of assigned supervisory review or approval of timesheets for payroll processed during fourth quarter. For each major federal program audit, the fourth quarter payroll expenditures selected for testing contained no evidence of supervisory review or approval. Context: Beginning September 24, 2022, with the implementation of the new time and attendance and payroll system, Workday, Human Resources began mass approving timesheets. Once posted, the mass approval overrides all other approvals in the system making it impossible to identify which timesheets were reviewed and approved by assigned supervisors and which were not. The sample sizes were based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The lack of assigned supervisory review and approval of timesheets has created errors in payroll transactions resulting in an increased number of corrections and supplemental pay needing to be processed. Cause: Human Resources began mass approving timesheets during the implementation to Workday as a way to speed up the processing of payroll. At the same time the County implemented Workday, Human Resources experienced a large amount of staff turnover. The increase in staff turnover combined with implementing Workday, caused significant internal controls to be overlooked. Recommendation: We recommend the County discontinue the practice of mass approving timesheets and design and implement procedures that requires each timesheet to be reviewed and approved within the system by the assigned supervisors. View of Responsible Official: Acknowledge
2022-005 Allowable Costs/Cost Principles and Reporting Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of Health and Human Services Program: 93.778 Medical Assistance Program Award Number and Year: 2205MN5ADM, 2205MN5MAP; 2022 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. For County federal awards received from the Minnesota Department of Human Services (DHS), internal control should be established and maintained to provide assurance that program reports submitted to DHS are completed accurately and in accordance with report instructions. As part of the County?s reporting requirements for the Medical Assistance Program, the County submits to DHS the quarterly Social Service Fund Report (DHS-2556) and the Income Maintenance Quarterly Expense Report (DHS-2550). Condition: Federal revenue offsets from the State and Local Fiscal Recovery Funds (ALN 21.027) were omitted from all quarterly DHS-2550 and DHS-2556 reports submitted to DHS during 2022. This resulted in an understatement of federal revenue offsets of $197,934 on the DHS-2550 and $752,717 on the DHS-2556 reports for the year. Questioned Costs: $950,651 Context: The DHS relies on accurate reporting of program costs to ensure that resulting grant funds paid to the County are for applicable federal program activities/costs and provide detailed information necessary for maintaining proper oversight over federal programs. Effect: Errors in the submission of costs on the quarterly reports can impair the DHS?s ability to provide required oversight over federal programs and can result in the County receiving either more or less federal funds than allowed based on the actual underlying activity. Cause: The County neglected to move the State and Local Fiscal Recovery Funds (ALN 21.027) revenue from the General Fund to the Human Services fund at the time the expenditures occurred resulting in an adjustment for financial reporting and omission of the federal revenue offset reported to DHS. Recommendation: We recommend Anoka County implement controls that ensure all DHS reports include federal revenue offsets and are completed accurately in accordance with DHS guidance. View of Responsible Official: Acknowledge