Condition: The Association’s controls were not effective to ensure transactions recorded to payroll liability accounts were appropriate and balances were accurately stated at year end on the trial balance. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Containment Payroll liability payments are now supported by payroll reports, tax filings, vendor invoices, and other applicable documentation rather than relying solely on general ledger balances. Root Cause The root cause was a prior practice of paying payroll liabilities based on general ledger balances rather than the underlying payroll or vendor documentation. In addition, benefitrelated changes were being made directly in the MIP financial system on the default timesheets when the changes should have been recorded in the HRMS employee record. Action Taken Payroll liability accounts are now reconciled each pay period to payroll reports and supporting documentation. Benefit-related changes are recorded in the HRMS employee record and processed through payroll rather than being manually changed in the MIP financial system. Payroll liability balances are also reviewed as part of the monthly-end close (MEC) process, with discrepancies researched and corrected as needed. As part of the year-end close, OCCDA will also review payroll liability account activity and system configuration to determine whether consolidating payroll liabilities into a single liability account, rather than maintaining separate accounts by liability type, would improve the efficiency and accuracy of reconciliation and financial reporting.