Finding Text
2022-007 Payroll (Material Weakness) Criteria: Title 2 CFR Part 200 §200.430(g). Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition: Timesheets were not always obtained and did not include information to support employee time and effort as required by federal regulations. Time records did not always include evidence of review/approval. Additionally, for two employees of 60 tested, differences existed between the approved hourly pay rate and the hourly rate paid per the payroll summary. Cause: As discussed at Finding 2022-005, we noted that no policy exists over the form and content of documentation to support employee time and effort under 2 CFR Part 200. And policies are not in place for the review and approval of payroll transactions. Effect: Payroll records did not comply with federal regulations. Because of the failure to require appropriate documentation and review/approval, there is increased risk that payroll transactions could be inappropriately charged to government programs. Questioned Costs: Not determinable due to limitations in the Organization’s accounting system. Perspective: When timesheets were not obtained, we were able to examine other evidence of time worked (such as emails). Forty of 60 tested had no evidence of approval. Repeat Finding: Yes Recommendation: Procedures should be implemented to require appropriate contemporaneous documentation to support time and effort reporting under 2 CFR Part 200. In addition, procedures should also be implemented to require the review and approval of payroll. Views of Responsible Officials: Management acknowledges the control weaknesses as described above as there was not proper documentation of payroll transactions including evidence of review and approval. The Organization has undertaken a review of its policies and procedures, including consultation of an outside accounting firm to ensure proper control procedures over payroll are implemented.