Finding 1168079 (2023-003)

Material Weakness Repeat Finding
Requirement
AB
Questioned Costs
-
Year
2023
Accepted
2026-01-07

AI Summary

  • Core Issue: Missing documented approval for 7 out of 40 payroll transactions, violating federal requirements for payroll documentation.
  • Impacted Requirements: Non-compliance with 2 CFR § 200.430, which mandates accurate records and internal controls for payroll charges.
  • Recommended Follow-Up: Enhance internal controls for payroll approvals, ensure consistent use of the timekeeping system, and conduct regular audits of payroll records.

Finding Text

2023-003 – Lack of Documented Approval for Payroll Transactions Program: ALN# 47.070 = Computer and Information Science and Engineering Federal Agency: National Science Foundation Federal Award Identification Number(s): 2216614, 2122756 Period: Year Ended December 31, 2023 Criteria: Under 2 CFR § 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed and must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During testing of payroll expenditures, the Organization was unable to provide documentation demonstrating supervisory approval for 7 of the 40 payroll transactions sampled. While payroll amounts appeared consistent with employee job description, pay rates, and timesheets, the required evidence of review and approval (e.g., approved timesheets, electronic timekeeping approval logs, or supervisor sign-offs) was not available for these items. Cause: The Organization’s existing payroll approval process is not consistently followed. Management reported that supervisory approval of employee hours is performed, but documentation is not always retained due to inconsistent use of the timekeeping system. Effect: Failure to maintain proper documentation of payroll approvals increased the risk that payroll costs charged to Federal programs may be unallowable or inaccurately allocated and unauthorized or incorrect payroll charges may go undetected. Questioned Costs: No questioned costs identified. Context: This sample was not intended to be, and was not, a statistically valid sample. Repeat Finding: No Recommendation: We recommend that the Organization: • Strengthen internal controls to ensure that all payroll transactions include documented supervisory approval prior to processing. • Ensure consistent use of the approved timekeeping system and require management to complete standardized approvals. • Implement periodic monitoring of payroll records to verify compliance with the approval process. Views of Responsible Officials: See management corrective action plan attached.

Corrective Action Plan

Response to finding 2023-003 – Lack of Documented Approval for Payroll Transactions Views of Responsible Officials: CSforALL management agrees with the conditions identified by SAX Advisory Group, including the noted causes and resulting effects under 2023-003. Due to the organizational pause at the end of 2024 and the transition period throughout 2025, the Organization discontinued its prior payroll system when staff were laid off and shifted remaining personnel to contractor status. During this period, approval and payment of contractor invoices were processed through Ramp, with documentation maintained but not within a formalized payroll approval workflow. As CSforALL prepares for the 2026 rebuilding phase, management has re-established a structured payroll approval and documentation process aligned with audit recommendations. Corrective Action taken in 2025: Beginning in August 2025, the Organization transitioned to ADP, a trusted payroll service integrated with QuickBooks, in anticipation of restoring full payroll operations in 2026. Since implementation, payroll reporting and documentation have been maintained accurately each month by the Operations Manager and the Accountant, with formal approval granted by the Advisory Consultant. All invoices, payments, and payroll records are shared and stored bi-weekly as payroll is executed, establishing a consistent and documented approval trail. Corrective Action Planned for 2026: Beginning in January 2026, CSforALL will apply standardized supervisory approval procedures within ADP for all payroll transactions. Management will implement periodic monitoring of payroll records, ensure consistent use of the approved timekeeping and approval system, and maintain documentation of all supervisory approvals to ensure compliance with established internal controls throughout the 2026 operating year and beyond.

Categories

Subrecipient Monitoring Allowable Costs / Cost Principles Internal Control / Segregation of Duties

Other Findings in this Audit

  • 1168078 2023-002
    Material Weakness Repeat
  • 1168080 2023-004
    Material Weakness Repeat
  • 1168081 2023-005
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
47.070 COMPUTER AND INFORMATION SCIENCE AND ENGINEERING $1.09M
47.076 STEM EDUCATION (FORMERLY EDUCATION AND HUMAN RESOURCES) $270,635