Finding Text
2023-013 Support for Payroll Material Weakness This is a repeat finding. The prior-year’s auditing finding number is 2022-013. Condition: All expenditures should include proper documentation and approval. During the audit we noted 5 out of the selected 93 timesheets selected for testing were missing. Criteria: Part E. Special Procedures Regarding Payroll Disbursement of the Housing Authority’s policies states that “The Finance Manager or his/her designee shall establish adequate timekeeping controls (including the use of time sheets) and there shall be supervisory review and approval of all employee time/leave records prior to issuance of a check.” Section 300.302 Financial Management of the Office of Management and Budget’s Uniform Guidance includes the following financial management system requirements: • Records must be maintained that adequately identify the source and application of funds for federally funded activities. These records must…be supported by source documentation. Cause: The executive director has authority to sign checks and therefore the approval process is not a reliable control. Effect: The lack of support and documentation of approval of these expenditures could cause the Housing Authority to have inappropriate expenditures being paid. Recommendation: Auditors recommend the governing board require proper documentation on all types of expenditures and that only members of the board have the authority to sign checks. Views of Responsible Officials: See Corrective Action Plan.