2024-005 – Significant Deficiency – Internal Control
Significant Deficiency in Internal Control: The Organization’s internal control policies require that Supervisors approve all timesheets prior to submission to the Administrative & Fiscal Services Department. During audit procedures, one timeshee...
2024-005 – Significant Deficiency – Internal Control
Significant Deficiency in Internal Control: The Organization’s internal control policies require that Supervisors approve all timesheets prior to submission to the Administrative & Fiscal Services Department. During audit procedures, one timesheet selected for testing did not have the required approval from the employee’s supervisor. The timesheet was processed for payment without documented supervisory approval. The failure to obtain approval on the timesheet was due to a new supervisor inadvertently missing the employee’s timecard for approval. Controls in place did not prevent the timesheet from being processed without the necessary supervisory review
Recommendation: We recommend that the Organization provide additional training to new supervisors on the importance of reviewing and approving timesheets promptly. Additionally, efforts should be made to ensure continuity of internal controls in the event of staffing or responsibility changes. Management should strengthen controls to prevent processing of timesheets without required approvals. Management should periodically test these controls to ensure they operate effectively, particularly following changes in key personnel involved in the process.
Responsible Person for Corrective Action: Lindsay Mitchell, Director of Fiscal & Facilities
Corrective Action to be Taken:
The Finance Director, in collaboration with the HR Assistant, conducts biweekly reviews of employee timesheets to ensure that both employees and their supervisors have completed and approved submissions prior to payroll processing. MMCA has held meetings with both new and tenured managers to emphasize the critical importance of timely, accurate, and fully approved timesheets. MMCA’s contracted payroll processing company enforces a strict submission deadline to ensure employees are paid on time. In accordance with federal labor regulations, all hours worked must be paid within a reasonable timeframe. Once payroll is submitted to the processor, time sheets can no longer be edited – making the window for corrections very limited. To strengthen accountability, the HR Assistant has implemented a system rule requiring that supervisors cannot approve a timesheet before it has been reviewed and submitted by the employee. This ensures that both parties are actively verifying time entries. Ongoing management training is provided to reinforce best practices in timekeeping and payroll compliance. Additionally, the Finance Director will collaborate with the Director of Human Resources and the President/CEO to revise and formalize the timecard approval process, ensuring consistency, transparency, and compliance across the organization.
The anticipated completion date for this corrective action is 9/30/2025.