Finding Text
2024-007 Significant Deficiency in Internal Control and Compliance over Major Programs Funding Agency: Department of Health and Human Services ALN: 93.600 Criteria Per 2 CFR 200.430(g)(1) and 2 CFR 200.430(g)(1)(i), “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.” Condition KCR’s internal controls require both the employee and supervisor to sign the timesheet prior to payroll being processed. During our testing of payroll expenses, we noted that six of the 60 timesheets tested lacked the employee and/or supervisor signature. Questioned Costs $9,955 Cause KCR’s internal controls over payroll were not adequately functioning to identify and respond to unapproved timesheets prior to processing payroll. Effect KCR’s failure to properly document approval for employee wages billed to the federal program resulted in noncompliance with 2 CFR 200.430(g)(1). Wages were billed to the federal program without reasonable assurance that the hours worked were accurate. Repeat Finding No. Recommendation We recommend KCR strengthen its internal controls over payroll to ensure timesheets are properly reviewed and approved prior to processing payroll. Views of Responsible Officials Management concurs with the finding and recommendation. Please see the attached corrective action plan.