FAC Explorer

Finding 1201405 (2025-004)

Material Weakness Repeat Finding
Requirement
AB
Questioned Costs
-
Year
2025
Accepted
2026-03-30
Audit: 395982
Organization: County of Orange, California (CA)
Auditor: EIDE BAILLY LLP

AI Summary

  • Core Issue: An employee was able to approve their own timecard due to a system configuration error, violating internal control requirements.
  • Impacted Requirements: This finding relates to compliance with 2 CFR Section 200.303(a) and 2 CFR Section 200.430, which mandate effective internal controls and accurate payroll records.
  • Recommended Follow-Up: Management should enforce segregation of duties in payroll, restrict approval to independent supervisors, and regularly review user access and system settings to ensure compliance.

Finding Text

Program: WIC Special Supplemental Nutrition Program for Women, Infants, and Children Federal Financial Assistance Listing Number: 10.557 Federal Grantor: U.S. Department of Agriculture Passed-Through: California Department of Public Health Award No. and Year: 22-10270 A03 and 2022 Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing of the HCA’s provisions for activities allowed or unallowed and allowable costs/cost principles requirements, we noted that for one (1) of sixty (60) payroll samples tested, the employee was able to review and approve their own timecard. Cause: It was determined that the control deficiency resulted from a system configuration error that permitted the employee to approve their own timecard under the supervisor/manager review role. Effect: Failure to consistently apply internal controls over payroll charges increases the risk that unallowable or unsupported payroll costs could be charged to the Federal program and not be detected in a timely manner. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sampling of sixty (60) timecards was selected for testing out of a population of 1,144. The condition noted above was identified during our procedures related to activities allowed or unallowed and allowable costs/cost principles. Repeat Finding from Prior Years: No. Recommendation: Management should ensure appropriate segregation of duties within the payroll system by restricting approval authority to independent supervisors or managers and implementing controls to prevent self-approval. In addition, management should periodically review user access roles and system configurations to confirm that approval controls are operating as designed and that payroll charges to Federal programs are allowable, properly allocated, and adequately supported. Views of Responsible Officials: See separately issued Corrective Action Plan.

Corrective Action Plan

Program: WIC Special Supplemental Nutrition Program for Women, Infants, and Children Federal Financial Assistance Listing Number: 10.557 Federal Grantor: U.S. Department of Agriculture Pass-Through: California Department of Public Health Award No. and Year: 22-10270 A03 and 2022 Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing of the HCA’s provisions for activities allowed or unallowed and allowable costs/cost principles requirements, we noted that for one (1) of sixty (60) payroll samples tested, the employee was able to review and approve their own timecard. Cause: It was determined that the control deficiency resulted from a system configuration error that permitted the employee to approve their own timecard under the supervisor/manager review role. Effect: Failure to consistently apply internal controls over payroll charges increases the risk that unallowable or unsupported payroll costs could be charged to the Federal program and not be detected in a timely manner. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sampling of sixty (60) timecards was selected for testing out of a population of 1,144. The condition noted above was identified during our procedures related to activities allowed or unallowed and allowable costs/cost principles. Repeat Finding from Prior Years: No. Recommendation: Management should ensure appropriate segregation of duties within the payroll system by restricting approval authority to independent supervisors or managers and implementing controls to prevent self-approval. In addition, management should periodically review user access roles and system configurations to confirm that approval controls are operating as designed and that payroll charges to Federal programs are allowable, properly allocated, and adequately supported. Management Response and Corrective Action Plan: 1. Person Responsible: Barbara Harano, HCA Disbursements Manager 2. Corrective action plan: An unexpected change occurred in the OC Time system that allowed an employee to both submit and approve their own timesheet. This issue had been previously reported and resolved. Auditor-Controller IT has reported the issue again to the timekeeping system vendor and is currently validating and testing the updated configuration to ensure the problem does not recur. 3. Anticipated Implementation date: June 30, 2026

Categories

Allowable Costs / Cost Principles Internal Control / Segregation of Duties

Other Findings in this Audit

  • 1201406 2025-001
    Material Weakness Repeat
  • 1201407 2025-002
    Material Weakness Repeat
  • 1201408 2025-001
    Material Weakness Repeat
  • 1201409 2025-002
    Material Weakness Repeat
  • 1201410 2025-001
    Material Weakness Repeat
  • 1201411 2025-002
    Material Weakness Repeat
  • 1201412 2025-001
    Material Weakness Repeat
  • 1201413 2025-002
    Material Weakness Repeat
  • 1201414 2025-008
    Material Weakness Repeat
  • 1201415 2025-008
    Material Weakness Repeat
  • 1201416 2025-008
    Material Weakness Repeat
  • 1201417 2025-008
    Material Weakness Repeat
  • 1201418 2025-005
    Material Weakness Repeat
  • 1201419 2025-005
    Material Weakness Repeat
  • 1201420 2025-006
    Material Weakness Repeat
  • 1201421 2025-006
    Material Weakness Repeat
  • 1201422 2025-001
    Material Weakness Repeat
  • 1201423 2025-009
    Material Weakness Repeat
  • 1201424 2025-001
    Material Weakness Repeat
  • 1201425 2025-009
    Material Weakness Repeat
  • 1201426 2025-001
    Material Weakness Repeat
  • 1201427 2025-009
    Material Weakness Repeat
  • 1201428 2025-001
    Material Weakness Repeat
  • 1201429 2025-009
    Material Weakness Repeat
  • 1201430 2025-001
    Material Weakness Repeat
  • 1201431 2025-009
    Material Weakness Repeat
  • 1201432 2025-001
    Material Weakness Repeat
  • 1201433 2025-009
    Material Weakness Repeat
  • 1201434 2025-001
    Material Weakness Repeat
  • 1201435 2025-009
    Material Weakness Repeat
  • 1201436 2025-003
    Material Weakness Repeat
  • 1201437 2025-003
    Material Weakness Repeat
  • 1201438 2025-003
    Material Weakness Repeat
  • 1201439 2025-001
    Material Weakness Repeat
  • 1201440 2025-001
    Material Weakness Repeat
  • 1201441 2025-007
    Material Weakness Repeat
  • 1201442 2025-007
    Material Weakness Repeat
  • 1201443 2025-007
    Material Weakness Repeat
  • 1201444 2025-007
    Material Weakness Repeat
  • 1201445 2025-001
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.871 SECTION 8 HOUSING CHOICE VOUCHERS $227.21M
12.U01 SANTA ANA RIVER MAINSTEM PROJECT - PRADO DAM CONSTRUCTION $63.03M
93.959 BLOCK GRANTS FOR PREVENTION AND TREATMENT OF SUBSTANCE ABUSE $19.06M
93.778 MEDICAL ASSISTANCE PROGRAM $16.90M
93.658 FOSTER CARE TITLE IV-E $12.77M
93.667 SOCIAL SERVICES BLOCK GRANT $10.75M
93.268 COVID- 19 IMMUNIZATION COOPERATIVE AGREEMENTS $8.13M
93.914 HIV EMERGENCY RELIEF PROJECT GRANTS $6.63M
93.967 CENTERS FOR DISEASE CONTROL AND PREVENTION COLLABORATION WITH ACADEMIA TO STRENGTHEN PUBLIC HEALTH $6.05M
10.557 WIC SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN $4.49M
14.879 MAINSTREAM VOUCHERS $4.46M
93.045 SPECIAL PROGRAMS FOR THE AGING, TITLE III, PART C, NUTRITION SERVICES $3.87M
20.205 HIGHWAY PLANNING AND CONSTRUCTION $3.82M
93.069 PUBLIC HEALTH EMERGENCY PREPAREDNESS $3.57M
20.106 AIRPORT IMPROVEMENT PROGRAM, INFRASTRUCTURE INVESTMENT AND JOBS ACT PROGRAMS, AND COVID-19 AIRPORTS PROGRAMS $3.53M
14.218 COMMUNITY DEVELOPMENT BLOCK GRANTS/ENTITLEMENT GRANTS $3.44M
93.958 BLOCK GRANTS FOR COMMUNITY MENTAL HEALTH SERVICES $3.42M
93.659 ADOPTION ASSISTANCE $3.21M
93.044 SPECIAL PROGRAMS FOR THE AGING, TITLE III, PART B, GRANTS FOR SUPPORTIVE SERVICES AND SENIOR CENTERS $3.11M
93.556 MARYLEE ALLEN PROMOTING SAFE AND STABLE FAMILIES PROGRAM $2.94M
93.994 MATERNAL AND CHILD HEALTH SERVICES BLOCK GRANT TO THE STATES $2.90M
14.239 HOME INVESTMENT PARTNERSHIPS PROGRAM $2.88M
17.258 WIOA ADULT PROGRAM $2.33M
93.563 CHILD SUPPORT SERVICES $2.15M
14.239 COVID- 19 HOME INVESTMENT PARTNERSHIPS PROGRAM $1.94M
93.917 HIV CARE FORMULA GRANTS $1.84M
17.278 WIOA DISLOCATED WORKER FORMULA GRANTS $1.79M
93.645 STEPHANIE TUBBS JONES CHILD WELFARE SERVICES PROGRAM $1.71M
16.922 EQUITABLE SHARING PROGRAM $1.62M
97.036 COVID- 19 DISASTER GRANTS - PUBLIC ASSISTANCE (PRESIDENTIALLY DECLARED DISASTERS) $1.58M
93.052 NATIONAL FAMILY CAREGIVER SUPPORT, TITLE III, PART E $1.56M
93.566 REFUGEE AND ENTRANT ASSISTANCE STATE/REPLACEMENT DESIGNEE ADMINISTERED PROGRAMS $1.46M
14.267 CONTINUUM OF CARE PROGRAM $1.37M
93.686 ENDING THE HIV EPIDEMIC: A PLAN FOR AMERICA — RYAN WHITE HIV/AIDS PROGRAM PARTS A AND B $1.29M
16.575 CRIME VICTIM ASSISTANCE $1.29M
95.001 HIGH INTENSITY DRUG TRAFFICKING AREAS PROGRAM $1.26M
20.616 NATIONAL PRIORITY SAFETY PROGRAMS $1.16M
93.889 NATIONAL BIOTERRORISM HOSPITAL PREPAREDNESS PROGRAM $1.15M
14.241 HOUSING OPPORTUNITIES FOR PERSONS WITH AIDS $905,766
17.235 SENIOR COMMUNITY SERVICE EMPLOYMENT PROGRAM $904,032
93.940 HIV PREVENTION ACTIVITIES HEALTH DEPARTMENT BASED $783,072
97.042 EMERGENCY MANAGEMENT PERFORMANCE GRANTS $750,854
93.767 CHILDREN'S HEALTH INSURANCE PROGRAM $717,458
93.918 GRANTS TO PROVIDE OUTPATIENT EARLY INTERVENTION SERVICES WITH RESPECT TO HIV DISEASE $689,428
93.268 IMMUNIZATION COOPERATIVE AGREEMENTS $641,855
93.116 PROJECT GRANTS AND COOPERATIVE AGREEMENTS FOR TUBERCULOSIS CONTROL PROGRAMS $619,258
16.753 CONGRESSIONALLY RECOMMENDED AWARDS $565,522
93.674 JOHN H. CHAFEE FOSTER CARE PROGRAM FOR SUCCESSFUL TRANSITION TO ADULTHOOD $517,178
93.590 COMMUNITY-BASED CHILD ABUSE PREVENTION GRANTS $463,154
93.044 COVID- 19 SPECIAL PROGRAMS FOR THE AGING, TITLE III, PART B, GRANTS FOR SUPPORTIVE SERVICES AND SENIOR CENTERS $407,064
14.896 FAMILY SELF-SUFFICIENCY PROGRAM $400,275
14.231 EMERGENCY SOLUTIONS GRANT PROGRAM $393,883
17.259 WIOA YOUTH ACTIVITIES $362,064
93.053 NUTRITION SERVICES INCENTIVE PROGRAM $337,821
16.741 DNA BACKLOG REDUCTION PROGRAM $324,527
10.025 PLANT AND ANIMAL DISEASE, PEST CONTROL, AND ANIMAL CARE $318,886
20.608 MINIMUM PENALTIES FOR REPEAT OFFENDERS FOR DRIVING WHILE INTOXICATED $261,021
93.150 PROJECTS FOR ASSISTANCE IN TRANSITION FROM HOMELESSNESS (PATH) $259,878
93.043 SPECIAL PROGRAMS FOR THE AGING, TITLE III, PART D, DISEASE PREVENTION AND HEALTH PROMOTION SERVICES $258,125
97.067 HOMELAND SECURITY GRANT PROGRAM $240,000
16.036 COMPREHENSIVE FORENSIC DNA ANALYSIS GRANT PROGRAM $221,851
93.472 TITLE IV-E PREVENTION PROGRAM $205,500
10.561 STATE ADMINISTRATIVE MATCHING GRANTS FOR THE SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM $203,132
93.493 CONGRESSIONAL DIRECTIVES $176,213
93.071 MEDICARE ENROLLMENT ASSISTANCE PROGRAM $167,793
16.835 BODY WORN CAMERA POLICY AND IMPLEMENTATION $164,430
15.226 PAYMENTS IN LIEU OF TAXES $162,565
16.040 MATTHEW SHEPARD AND JAMES BYRD, JR. HATE CRIMES EDUCATION, INVESTIGATION AND PROSECUTION PROGRAM $147,180
93.747 ELDER ABUSE PREVENTION INTERVENTIONS PROGRAM $145,138
16.839 STOP SCHOOL VIOLENCE $139,709
93.558 TEMPORARY ASSISTANCE FOR NEEDY FAMILIES $138,560
97.012 BOATING SAFETY FINANCIAL ASSISTANCE $134,274
93.323 COVID- 19 EPIDEMIOLOGY AND LABORATORY CAPACITY FOR INFECTIOUS DISEASES (ELC) $129,248
93.977 SEXUALLY TRANSMITTED DISEASES (STD) PREVENTION AND CONTROL GRANTS $128,292
16.742 PAUL COVERDELL FORENSIC SCIENCES IMPROVEMENT GRANT PROGRAM $122,674
20.600 STATE AND COMMUNITY HIGHWAY SAFETY $120,341
93.052 COVID- 19 NATIONAL FAMILY CAREGIVER SUPPORT, TITLE III, PART E $113,508
93.042 SPECIAL PROGRAMS FOR THE AGING, TITLE VII, CHAPTER 2, LONG TERM CARE OMBUDSMAN SERVICES FOR OLDER INDIVIDUALS $112,983
20.939 SAFE STREETS AND ROADS FOR ALL $103,954
93.090 GUARDIANSHIP ASSISTANCE $101,253
10.555 NATIONAL SCHOOL LUNCH PROGRAM $85,520
16.U01 OC REGIONAL COMPUTER FORENSICS LABORATORY (OCRCFL) $77,877
10.553 SCHOOL BREAKFAST PROGRAM $74,726
93.603 ADOPTION AND LEGAL GUARDIANSHIP INCENTIVE PAYMENTS PROGRAM $69,146
16.838 COMPREHENSIVE OPIOID, STIMULANT, AND OTHER SUBSTANCES USE PROGRAM $55,843
93.324 STATE HEALTH INSURANCE ASSISTANCE PROGRAM $54,494
21.032 LOCAL ASSISTANCE AND TRIBAL CONSISTENCY FUND $52,082
10.576 SENIOR FARMERS MARKET NUTRITION PROGRAM $44,000
93.041 SPECIAL PROGRAMS FOR THE AGING, TITLE VII, CHAPTER 3, PROGRAMS FOR PREVENTION OF ELDER ABUSE, NEGLECT, AND EXPLOITATION $39,498
93.045 COVID- 19 SPECIAL PROGRAMS FOR THE AGING, TITLE III, PART C, NUTRITION SERVICES $38,066
10.665 SCHOOLS AND ROADS - GRANTS TO STATES $31,720
16.U02 ORANGE COUNTY DRUG ENFORCEMENT TASK FORCE $21,741
16.U03 ORANGE COUNTY ALCOHOL, TOBACCO, FIREARMS & EXPLOSIVES TASK FORCE $17,787
93.323 EPIDEMIOLOGY AND LABORATORY CAPACITY FOR INFECTIOUS DISEASES (ELC) $17,728
16.738 EDWARD BYRNE MEMORIAL JUSTICE ASSISTANCE GRANT PROGRAM $13,109
97.106 SECURING THE CITIES PROGRAM $12,577
21.016 EQUITABLE SHARING $5,144
14.U01 FSS ESCROW FORFEIT PROGRAM $2,008
14.218 COVID- 19 COMMUNITY DEVELOPMENT BLOCK GRANTS/ENTITLEMENT GRANTS $384