Finding Text
U.S. Department of Veterans Affairs 2025-002 – VA Supportive Services for Veteran Families Program (SSVF) – Assistance Listing No. 64.033, Grant Period – October 2024 through September 30, 2026. Condition: During testing of 21 payroll transactions, we noted that 7 employees' approved timesheets allocated 100% of their time to programs other than SSVF. These timesheets were approved by both the employees and their supervisors and were used in payroll processing, resulting in payroll register charges being recorded to incorrect program codes. Based on review of employee personnel records and discussions with management, each employee was assigned 100% to the SSVF program during the period and did not perform work for the other programs identified on the timesheets. The auditors traced the related payroll expenditures to the general ledger and noted that the payroll costs were ultimately recorded in the correct amounts to SSVF. Criteria: 2 CFR 200.430(g)(1) indicates 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. Cause: Management's controls over the preparation and supervisory review of employee timesheets were not operating effectively to ensure that time distributions accurately reflected employees' assigned program activities prior to payroll processing. Effect: Because inaccurate timesheets were approved and processed, the controls designed to ensure accurate payroll documentation did not operate effectively. Although the payroll expenditures were ultimately recorded to the correct federal program and no questioned costs were identified, inaccurate supporting documentation increases the risk that payroll costs could be charged to the wrong funding source and that errors or noncompliance may not be detected timely. Context: Seven out of twenty-one payroll transaction sampled. Our sample was not a statistically valid sample. This was not a repeat finding from a prior period. Questioned Costs: NoneRecommendations: We recommend that management strengthen controls over payroll time reporting by requiring employees to accurately complete timesheets, enhancing supervisory review procedures to verify program coding before approval, and implementing payroll review procedures to ensure approved timesheets agree with employee funding assignments prior to payroll processing. Management should also provide periodic training to employees and supervisors regarding payroll documentation requirements. Management Response: Management acknowledges the finding regarding the accuracy of supporting payroll documentation for employees charged to the Supportive Services for Veteran Families (SSVF) program. Management agrees that stronger review controls over payroll documentation are appropriate and has implemented additional procedures to ensure supporting documentation is accurate before payroll is finalized.