Finding 2024-03 Insufficient Documentation Supporting Payroll Activity Condition: During testing of payroll claims, we noted that the Organization did not consistently maintain documentation of approved pay rates. Some employees had offer letters on file, while others did not. In certain cases, the offer letters on file contained pay rates that did not match the actual pay rates being paid. Although our procedures and inquiries confirmed that employees were paid the correct amounts in accordance with approved procedures, the approved documentation was not consistently retained. In addition, we noted that the Organization did not maintain properly completed and approved I-9 forms for all employees during the year. Corrective Actions Taken or Planned: The organization recognizes the importance of maintaining complete and accurate payroll documentation and acknowledges the deficiencies identified during the audit. While payroll payments were made accurately, we recognize that inconsistent retention of supporting documentation created a compliance risk. Certain documentation had been maintained in digital form by a former staff member. Due to staff turnover, these records were not readily accessible or able to be located during the audit period. Management has since initiated a process to update all employee files with current, complete, and properly executed documentation to ensure compliance and improve recordkeeping practices. Management and leadership remain committed to strengthening personnel file management, maintaining all required documentation in accordance with applicable regulations, and reinforcing oversight to prevent recurrence in future audit periods. The Organization plans to execute the following: 1. Standardization of Employee Files - The Organization has implemented a standardized checklist for all employee personnel files to ensure the presence of: + Signed offer letters with approved pay rates + Completed and verified I-9 forms + Any subsequent pay rate change approvals - Co-Executive Directors will be required to complete and sign the checklist for each employee file upon hire, and again during annual compliance reviews. 2. Offer Letter and Pay Rate Documentation - Effective immediately, all employees (existing and new) will have a signed offer letter or addendum on file reflecting their current pay rate. - For employees where discrepancies exist between historical offer letters and current pay, updated pay rate addendums will be drafted, signed by both employee and management, and placed in their personnel files. 3. I-9 Form Compliance - The organization will perform a full review of all current employee I-9 documentation to identify and correct any missing or incomplete forms. - Going forward, I-9 forms will be completed and verified on or before the employee’s first day of work, in accordance with federal requirements. - An annual HR compliance audit will be conducted to ensure all I-9’s are up to date and retained properly. 4. Training & Accountability - Administrative staff will receive refresher training on employment documentation requirements, including I-9 compliance and payroll authorization documentation. - The Co-Executive Directors will review a sample of personnel files quarterly to verify compliance and hold Co-Executive Directors accountable for maintaining accurate documentation. To ensure continued compliance, the Organization will maintain a centralized file tracking system, updated quarterly, and report results to the Board. Corrective actions will be taken immediately if gaps are identified.