Finding Text
Finding 2025-005 Activities Allowed/Allowable Costs: Internal Control (Payroll Costs) U.S. Department of Health and Human Services No. 93.558 – Temporary Assistance for Needy Families No. 93.276 Drug Free Community Grant Period Year Ended June 30, 2025 Criteria: The entity should maintain controls to ensure employee timecards are reviewed and approved before payroll is processed and charged to federal awards. Condition and Context: Of six payroll runs tested, six employees were selected from each run. Seven instances of timecards not being approved prior to payroll processing was found. Cause: Supervisory review controls over payroll processing were not operating effectively, and payroll was processed before approval of employee time records. Effect: Employees may be paid based on inaccurate or unauthorized time records. Payroll costs could be calculated or allocated incorrectly and charged to the federal program without timely detection. Recommendation: We recommend the Organization develop written policies establishing a review process for hourly timecards prior to payroll processing. Management Response: Policies are being implemented to ensure there is a review process and documentation of the process, see corrective action plan.