Finding Text
2025-002: Review and Approval of Employee Timecards Criteria: Uniform guidance requires a recipient to establish, document, and maintain effective internal control over a Federal award that provides reasonable assurance that the recipient is managing the Federal award in compliance with Federal regulations and the terms and conditions of the Federal award. In addition, Uniform guidance requires charges to Federal awards for salaries and wages to be based on records that accurately reflect the work performed and to be supported by a system of internal control that provides reasonable assurance that such charges are accurate, allowable, and properly allocated. Condition: During the audit, the Center was unable to provide evidence that employee timecards were reviewed and approved by the Controller. As a result, the Center was unable to demonstrate that supervisory review of employee timecards was consistently performed prior to payroll processing. Context: Employee timecards provide the underlying support for hours worked and, ultimately, employee compensation and related payroll expenditures. Supervisory review and approval of timecards is an important internal control designed to provide reasonable assurance that hours reported are accurate, authorized, and properly recorded. For employees whose compensation is charged to Federal awards, appropriate timekeeping and related supervisory review are essential to support the accuracy and allowability of payroll charges. Cause: The Center did not have controls designed and implemented effectively to ensure that supervisory review and approval of employee timecards was consistently documented and retained prior to payroll processing. Effect: The lack of documented supervisory review increases the risk that payroll could be processed using inaccurate or unauthorized hours or that payroll costs could be incorrectly charged to Federal awards. Additionally, the Center was unable to demonstrate that employee timecards were consistently reviewed for accuracy and approval prior to payroll processing. Recommendation: We recommend that the Center establish and implement procedures requiring employee timecards to be reviewed and approved by the Controller prior to payroll processing. The Center should retain sufficient documentation evidencing the performance of the review and approval in accordance with its record-retention policies.