Finding Text
Condition: During our review of controls over payroll processing and tracking of time charged to federal awards, we noted that not all employee timecards are approved by their direct supervisor before processing of the bi-weekly payroll. Criteria: Effective internal controls should be in place to review hours worked by all employees and to review hours charged to federal awards to ensure the related expenditure is allowable. Cause: While policies in place require supervisor approval of timecards, the payroll system is not set up to require the electronic supervisor approval before payroll is processed each period. Effect: While we noted no time charged that appeared improper, internal controls over payroll were not properly implemented and could result in errors in employee hours not being detected and corrected in a timely manner. Context: Out of a sample of 40 payroll expenditures, 5 timecards were not fully approved by the employee’s direct supervisor. A statistical sample was not used. There were no questioned costs associated with this finding. Recommendation: We recommend that management review current internal controls over approval of timecards and ensure internal policies are being followed to ensure approval of all timecards. Certain payroll applications allow for system settings that would require approval of hours before processing.