Finding: 2022-003 – Payroll Documentation Auditor Description of Condition and Effect: Salaries and wages were allocated using percentages to distribute payroll costs allocated to grants. Costs were not consistently allocated to reflect the activity actually performed in five out of the six payroll ...
Finding: 2022-003 – Payroll Documentation Auditor Description of Condition and Effect: Salaries and wages were allocated using percentages to distribute payroll costs allocated to grants. Costs were not consistently allocated to reflect the activity actually performed in five out of the six payroll cycles that we tested. The Organization did have a system of controls in place for the fiscal year ending September 30, 2022 requiring employees report time spent in specific areas on their timesheets. However, the control was overridden by management and was not applied on a consistent basis. There were payrolls tested where timesheet was not compared to payroll journals provided by the payroll service, the accounting records, or the reimbursement requests for grants. Payroll costs reflected in the books and records of the Organization did not agree to the payroll journals, timesheets, and reimbursement requests. This required the Organization to use spreadsheets and calculation to support grant funding requests. Some timesheets were found to be inaccurate, resulting in employee personnel costs being reimbursed without proper documentation. Auditor Recommendation: We recommend that the Organization improve its financial management policies and procedures to ensure that multiple staff members are involved in the process of reviewing and allocating personnel expenses to grants. Policies and procedures over payroll should include employees entering time accurately across areas where they spent time, supervisory review, recalculation and approval of timesheets, review of timesheets and compiled time reporting before it is sent to the payroll provider and review of the reporting provided after the payroll run. Payroll postings input into the accounting system should accurately reflect time spent in each grant area (class) and grant reporting and reimbursement requests should be prepared using those numbers. Corrective Action: SIREN will improve its internal controls and policies to ensure that multiple staff members are involved in the process of reviewing and allocating personnel expenses to grants. Multiple staff members will review and ensure that grant reporting and reimbursement requests are based on the actual payroll postings input into the accounting system. Responsible Person Martha Richard Anticipated Completion Date: September 30, 2023