Finding Text
2022-002 Federal Agency: U.S. Department of Agriculture Federal Program Name: Beginning Farmer and Rancher Development Program Assistance Listing Number: 10.311 Federal Award Identification Number and Year: 2021: 2021-70033-35709 Award Period: September 1, 2021 to August 31, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR 200.303(a) states that a nonfederal entity must "Establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: During testing, one of the 24 samples selected had an individual approving their own timecard. Questioned costs: None. Context: A sample of 24 was made from a population of 193 paychecks processed during the year with costs charged to the major program. Out of the 24 timecards that were sampled, there was one instance where the individual whose timecard was being reviewed also approved their own timecard. The same individual was tested in multiple pay periods, and the self-approval appears to have been an isolated incident. Cause: Procedures requiring timesheets to be approved by a manager or director were not applied consistently. Effect: Without appropriate segregation of duties around the approval of timecards, there is an increased risk of inaccuracies, unauthorized payroll activity, and fraud within the timekeeping and payroll processes, which could result in inaccurate financial reporting and misappropriation of funds. Repeating finding: No. Recommendation: We recommend management provide additional training to employees and supervisors responsible for timesheet preparation and approval to reinforce compliance with established timesheet policies and approval controls. View of responsible officials: Management agrees with the finding and has provided its corrective action plan.