Finding Text
Material Weakness/Material Non-Compliance 2022-003 Finding Deficiencies in controls surrounding payroll expenditures Programs: Title I Grants to Local Educational Agencies, ALN #84.010 Elementary and Secondary School Emergency Relief Fund II, ALN #84.425D Elementary and Secondary School Emergency Relief Fund III ARP, ALN #84.425U Compliance Requirement: Allowable Cost Repeat Finding: None Criteria: The school district is charged with developing controls around payroll expenditures that will provide authorization of pay through school board approval and the existence of time and attendance records. The district should also have controls, including policies and procedures, that will ensure compliance with the record-keeping requirements of the federal wage and hour law. Condition: During our testing of payroll expenditures, we noted the following exception out of a sample of twenty (20) tested: 1. Due to an error with rolling froward the year and checks being processed or allocated to the wrong fiscal year, the district could not provide accurate monthly check registers to recalculate the net pay for fourteen (14) in the sample. Due to the software error the auditor could not follow the support or proper board approvals showing the differences in actual and approved contract/budgeted pay based on the monthly check registers provided. 2. Two (2) in the sample where the district could not provide the contract or board approved budgeted amount for the employee. Cause: The district did not have adequate controls in place to ensure that payroll expenditures can be properly supported. Effect: This could cause payroll expenditures to be misstated on the financials and could lead to questioned costs. Questioned Cost: None Recommendation: We recommend the district implement internal controls to ensure all employees are properly board approved and employee payments are verified according to the board approved amounts. The district should also implement controls to ensure all employees? time records are being reconciled. Hourly employees should be docked or paid overtime, if applicable. Response: Please refer to the Auditee?s Corrective Action Plan beginning on page 76.