Finding Text
2021-001 – Payroll – Segregation of Duties
Condition:
Our audit procedures disclosed that the person responsible for processing payroll has the capability of inputting pay rate changes into the payroll software. Additionally, this same individual has the ability to create employees within the payroll module.
Criteria:
Proper internal control requires there be a segregation of duties between the recordkeeping function (payroll processing) and the authorization function (access to change salary rates and edit payroll master files).
Effect:
These practices could allow for misappropriation of assets to occur without being detected.
Cause:
SAIL did not have procedures in place to address the risks from a lack of segregation.
Recommendation:
Due to the limited personnel in the accounting department, we recommend that the individual responsible for processing payroll continue to function with the same responsibilities; however, we recommend a payroll change status report be reviewed each pay period by another individual. This payroll change status form should be signed-off once reviewed.
Response:
SAIL agrees with the finding and will implement procedures to address the recommendation in 2023.