Finding Text
Type of Finding: Payroll support (material weakness) Repeat Finding: Yes - 2018-003
Condition:
During the year ended December 31, 2020, the City did not maintain documentation for time worked by employees (ie: timesheets) or for accrued leave balances earned by employees.
Criteria:
The characteristics of internal control are presented in the context of the components of internal control discussed in Internal Control-Integrated Framework (COSO Report), published by the Committee of Sponsoring Organizations of the Treadway Commission. The COSO Report provides a framework for organizations to design, implement, and evaluate control that will facilitate compliance with the requirements of Federal laws, regulations, and program compliance requirements.
Cause:
The City did not have the controls in place to ensure time worked or accrued leave balances were properly supported.
Effect:
Salaries and wages were not properly supported by a system of internal controls which provides reasonable assurance that the charges are accurate. Salary and wage charges were not able to be reconciled to the time distribution records.
Questioned Costs:
Unknown.
Recommendation:
The City should maintain documentation for time worked for all employees and for leave as its earned and used by employees.
Auditee Response and Corrective Action Plan:
Management agrees with the finding. The city does record paid time off records at the departmental level. Department managers do have an accounting of the total accrued paid time off available to their employees. The city does not currently have this information in turn uploaded to its accounting software in a centralized way. The city is currently working on uploading this information into internal accounting software.
Auditor’s Conclusion:
This finding remains as stated.