Finding Text
2022-004 Condition: The Organization does not maintain supporting documentation for approved payrates in employee personnel files. Criteria: ? 200.303(a) requires non-federal entities to establish and maintain effective internal control over the federal awards 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. An effective internal control structure necessitates a formal policy that documents approved payrates in employee personnel files. Effect: Failure to implement an adequate policy for documenting approved pay rates exposes the assets of the Organization to greater risk of misappropriation due to fraud. Cause: The Organization has not implemented a policy to maintain supporting documents of approved payrates in employee personnel files. Recommendation: At a minimum, the board of directors should approve pay rates for all employees yearly. Updated, approved payrates should be maintained in each employee?s personnel files or on an approved master list. Management Response: Management concurs with this finding. Management will immediately implement a payroll policy that requires documentation of approved payrates in employee personnel files.