Finding 11225 (2022-001)

Reference Number: 2022-001 Filing and Payment of Payroll Taxes (Material Weakness) Criteria: AYUDA is required to maintain internal controls over timely payment of payroll taxes financial reporting to provide a high level of assurance that the financial records are recorded properly, and that adequate documentation is maintained to support all transactions recorded. All accounts related to payroll should be reconciled monthly to ensure accuracy and support should be maintained for all transactions. The Internal Revenue Code requires that filing be done timely and accurately. Furthermore, it requires payroll taxes to be paid and 941’s accurately filed and reconcile to quarterly wages. Condition and Context: Payroll-related accounts were being reconciled however, timely and accurate payment of payroll taxes were not deposited with the U.S. Treasury. Effect: Lack of Timely Payment has resulted in noncompliance with timely and accurate submission of required payroll taxes. AYUDA operated with inadequate controls over timely payment of payroll taxes which can result in significant penalties being incurred. Cause: The Organization does not have adequate procedures to ensure timely payment of payroll taxes due. Recommendation: The Organization should improve its internal controls to ensure that their payroll taxes are paid as they are due within the required period. Management Response: Refer to corrective action plan. Reference Number: 2022-001 Filing and Payment of Payroll Taxes (Material Weakness) Criteria: AYUDA is required to maintain internal controls over timely payment of payroll taxes financial reporting to provide a high level of assurance that the financial records are recorded properly, and that adequate documentation is maintained to support all transactions recorded. All accounts related to payroll should be reconciled monthly to ensure accuracy and support should be maintained for all transactions. The Internal Revenue Code requires that filing be done timely and accurately. Furthermore, it requires payroll taxes to be paid and 941’s accurately filed and reconcile to quarterly wages. Condition and Context: Payroll-related accounts were being reconciled however, timely and accurate payment of payroll taxes were not deposited with the U.S. Treasury. Effect: Lack of Timely Payment has resulted in noncompliance with timely and accurate submission of required payroll taxes. AYUDA operated with inadequate controls over timely payment of payroll taxes which can result in significant penalties being incurred. Cause: The Organization does not have adequate procedures to ensure timely payment of payroll taxes due. Recommendation: The Organization should improve its internal controls to ensure that their payroll taxes are paid as they are due within the required period. Management Response: Refer to corrective action plan.