Finding 12436 (2022-001)

Significant Deficiency Repeat Finding

Requirement

Questioned Costs

Year

2022

Accepted

2023-02-05

Audit: 16861

Organization: Central West Virginia Regional Airport Authority (WV)

Auditor: Suttle & Stalnaker PLLC

AI Summary

Core Issue: Internal controls over payroll expenditures were inadequate, leading to a lack of proper review and approval for one transaction.
Impacted Requirements: This finding repeats previous issues, indicating ongoing non-compliance with 2 CFR 200.303 regarding effective internal control over federal awards.
Recommended Follow-Up: The Authority should enhance its review processes to ensure all payroll transactions are properly approved before charging federal awards.

Finding Text

2022-001 INTERNAL CONTROLS OVER ALLOWABILITY (REPEAT OF PRIOR YEAR FINDINGS 2021-001 AND 2020-001) Federal Program Information: Federal Agency and Program Name: U.S. Department of Transportation Airport Improvement Program Grant Number: AIP #3-54-0003-063-2018; AIP #3-54-0003-067-2019; AIP #3-54-0003-068-2020; AIP #3-54-0003-069-2020; AIP #3-54-0003-070-2020; AIP #3-54-0003-071-2020; AIP #3-54-0003-072-2021; AIP #3-54-0003-073-2021; AIP #3-54-0003-076-2022 Federal Assistance Listing Number 20.106/COVID-19 20.106 Criteria: 2 CFR 200.303 requires that a non-federal entity must ?(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States and the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).? Condition: For one of the forty payroll transactions selected for testing, the expenditure was not properly reviewed and approved. Questioned Costs: Not Applicable Context: Total federal expenditures for the Airport Improvement Program were $13,800,823 for the year ended June 30, 2022. Cause: The Authority did not follow the policies and procedures in place to ensure all payroll transactions are reviewed and approved. Effect: The Authority may not be in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Expenditures may be paid that are not allowable. Recommendation: We recommend that the Authority implement controls to ensure that expenditures are properly reviewed and approved before being charged to a federal award. Views of Responsible Officials: Management acknowledges the finding. See corrective action plan.

Corrective Action Plan

Finding 2022-001: Internal Controls Over Allowability During the fiscal year ended June 30, 2021, the Authority began converting to a new payroll software, UKG, and hired a new human resources specialist after noting the previously implemented payroll software, Criterion, was unable adequately calculate the Authority ' s complex payroll. The new payroll software did not go live until September 2021 and the paper timesheet in question was utilized during the transition period while converting to the new software. The Authority believes proper controls concerning payroll have been in place since going live with UKG. The Human Resources Specialist and Accounting Manager review each payroll to ensure the payroll is being calculated correctly and proper timesheet approvals have taken place. In addition, the Chief Financial Officer and Accounting Manager will conduct or assign an employee to conduct period internal audits to ensure payroll records are accurate and complete. Responsible Parties: Human Resources Specialist: Communicates with managers to confirm review of timesheets. Accounting Manager: Review payroll and conduct internal audits.

Other Findings in this Audit

12434 2022-002

Significant Deficiency
12435 2022-002

Significant Deficiency
12437 2022-001

Significant Deficiency Repeat
588876 2022-002

Significant Deficiency
588877 2022-002

Significant Deficiency
588878 2022-001

Significant Deficiency Repeat
588879 2022-001

Significant Deficiency Repeat

Programs in Audit

ALN	Program Name	Expenditures
20.106	Airport Improvement Program	$9.25M
20.106	Covid-19: Airport Improvement Program	$4.55M
20.930	Payments for Small Community Air Service Development	$324,968
11.307	Covid-19: Economic Adjustment Assistance	$50,000