FAC Explorer

Finding 1222204 (2025-002)

Material Weakness Repeat Finding
Requirement
AB
Questioned Costs
-
Year
2025
Accepted
2026-06-30
Audit: 406051
Organization: Sunrise County Economic Council (ME)
Auditor: ONE RIVER CPAS

AI Summary

  • Core Issue: Incorrect sick time payouts for salaried employees due to reliance on hourly rates instead of salary rates.
  • Impacted Requirements: Management must ensure accurate salary payments as per personnel files.
  • Recommended Follow-Up: Improve review procedures for setting up and modifying pay codes in the payroll system.

Finding Text

2025-002 Internal Controls over Accuracy of Pay Rates in Payroll Processing for Paying Out Sick Time for Salaried Employees (Significant Deficiency) Federal Award Program: All Awards Criteria: Management is responsible for paying salaried employees at their correct salary rate in their personnel file. Condition and Context: Audit procedures noted two individuals that had more than 80 hours in a pay period with sick time in that pay period that were paid out sick time based on their hourly equivalent rate on top of their salary rather than paying the correct salary amount. Cause: Insufficient review of the setup of the sick time pay code in the payroll system. Effect: One employee was overpaid by $20.10 in a pay period while another employee was overpaid by $2.85 in a pay period, and there could be more instances of overpayments. Questioned Costs: None Recommendation: Management should consider implementing a better review procedure whenever new pay codes are set up and when any changes are made to how pay codes are set up.

Corrective Action Plan

SCEC contracts with a third-party payroll provider to process our payroll. Upon discovery of this error, we reviewed all pay periods again, but found no other error regarding sick time overpayment, or any other time paid incorrectly. The payroll provider had merged companies in a prior year and had several system updates that caused this error. SCEC had other issues with this provider’s system. SCEC cancelled our contract with this payroll provider and contracted with a new payroll provider by the end of the 2025 fiscal year. Payroll is reviewed extensively before it is processed to ensure staff are being paid at their correct rates and other elements of payroll are correct.

Categories

Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

  • 1222198 2025-002
    Material Weakness Repeat
  • 1222199 2025-002
    Material Weakness Repeat
  • 1222200 2025-002
    Material Weakness Repeat
  • 1222201 2025-002
    Material Weakness Repeat
  • 1222202 2025-002
    Material Weakness Repeat
  • 1222203 2025-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.558 TEMPORARY ASSISTANCE FOR NEEDY FAMILIES $1.04M
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $223,498
10.870 RURAL MICROENTREPRENEUR ASSISTANCE PROGRAM $211,463
59.059 CONGRESSIONAL GRANTS $194,446
10.767 INTERMEDIARY RELENDING PROGRAM $181,840
66.818 BROWNFIELDS MULTIPURPOSE, ASSESSMENT, REVOLVING LOAN FUND, AND CLEANUP COOPERATIVE AGREEMENTS $170,520
12.002 PROCUREMENT TECHNICAL ASSISTANCE FOR BUSINESS FIRMS $130,294
11.472 COOPERATIVE RESEARCH PROGRAM $114,397
11.008 NOAA MISSION-RELATED EDUCATION AWARDS $103,431
11.473 OFFICE FOR COASTAL MANAGEMENT $100,000
10.561 STATE ADMINISTRATIVE MATCHING GRANTS FOR THE SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM $82,738
14.228 COMMUNITY DEVELOPMENT BLOCK GRANTS/STATE'S PROGRAM AND NON-ENTITLEMENT GRANTS IN HAWAII $61,551
15.939 HERITAGE PARTNERSHIP $49,707
20.205 HIGHWAY PLANNING AND CONSTRUCTION $24,327
84.116 FUND FOR THE IMPROVEMENT OF POSTSECONDARY EDUCATION $21,301
10.868 RURAL ENERGY FOR AMERICA PROGRAM $13,897
10.310 AGRICULTURE AND FOOD RESEARCH INITIATIVE (AFRI) $10,783
11.419 COASTAL ZONE MANAGEMENT ADMINISTRATION AWARDS $4,149
47.076 STEM EDUCATION (FORMERLY EDUCATION AND HUMAN RESOURCES) $1,333
90.601 NORTHERN BORDER REGIONAL DEVELOPMENT $577