Management accepts the finding and notes that the prior year finding was not reported until near the end of the current audit period, contributing to the repeat finding. Effective in June 2022, payroll authorizations were directed through the PeopleSoft system to the Payroll Manager who prepared and...
Management accepts the finding and notes that the prior year finding was not reported until near the end of the current audit period, contributing to the repeat finding. Effective in June 2022, payroll authorizations were directed through the PeopleSoft system to the Payroll Manager who prepared and documented the necessary allocation calculation. This calculation, along with a copy of the original payroll authorization for the employee and the superseding payroll authorization were sent to the Associate Controller for review and verification. This secondary review was marked approved and returned to the Payroll Manager for final entry in the payroll system and records archiving.
Further, a campus committee with representatives from the offices of; Controller, Information Technology, Sponsored Research Services, Payroll and Academic Affairs Operations was formed to further review and address this prior year finding. The Committee has developed a form within PeopleSoft that will allow for entering payroll authorization data, system calculation of applicable fringe adjustments, and a system driven workflow review and approval process from initial entry by the Principal Investigator to approval by Sponsored Research Services to the approval by either the Research Accountant or the Associate Controller for posting of all prior period reallocations. Any adjustments affecting future periods will be processed through the existing payroll authorization process and system entered by the Payroll Office. This cost transfer process was implemented on April 1, 2023. A further enhancement of automating a portion of the related journal entry posting upon final approval by the Research Accountant or Associate Controller was implemented in June 2023.
In light of the repeat finding, the University engaged an outside firm, Bowers and Company CPAs PLLC in May 2023, to conduct an internal review evaluation of the Payroll Department with a focus on reviewing assessing current internal controls and processes from employees set up through issuance of compensation and filing of state and federal forms relating to payroll procedures and transactions. The outcome of this review was to identify areas of potential weakness, process improvement, and current utilization of existing financial systems and tools. The results of this review evaluation were received in August 2023. In the limited scope review they identified no reportable findings and provided several recommendations to improve University-wide payroll processes. The implementation of these recommendations improved University-wide payroll processes.
Additionally, we carried out an internal audit encompassing all federally funded research payroll transactions involving students, staff, and research faculty for the fiscal year 2022. We compared payroll authorizations against the actual payroll amounts for a total of 231 faculty, staff and students. We identified 6 findings, in addition to the findings from KPMG during the initial audit, between payroll authorizations or graduate appointments and the actual amounts charged to federal accounts, which is an overall error rate of 5.6%.
Clarkson’s Payroll Department is conducting monthly review of allocations in payroll to proactively identify errors, aiming to facilitate prompt corrections. In addition to the monthly review, Sponsored Research Services will continue in processing cost transfers whenever errors are identified, necessitating adjustments to the allocation of payroll to federal awards.