Finding Text
Condition and Criteria: A monthly journal entry was recorded for nine months that allocated additional payroll to the grant which was based on management’s estimates and not on approved time sheets. Management identified the time sheets were not being accurately filled out and, on a monthly basis estimated the additional time they believed was spent on the grant but not recorded in the approved time sheets. Questioned Cost: $75,000. Cause: The employees improperly completed their time sheets and those responsible for reviewing and approving the time sheets did not detect and correct the improperly recorded time. Effect: It cannot be verified that the employees worked these additional hours that were billed to the grant. Auditor’s Recommendation: The Organization should develop and implement policies and procedures to ensure that only actual hours spent working on the grant are charged to the grant as direct labor.