Finding Text
Statement of condition: Salaries and wages were charged to Coronavirus State and Local Fiscal Recovery Funds program for employees but there was no evidence of review performed over payroll calculations. There were also instances of variances for salaries and wages charged to the program between supporting documentation and amount recorded and paid. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) 200.303 (a) states that the non-federal entity must 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 statues, regulations, and the terms and conditions of the Federal award. Cause of condition: Controls were in place for management to ensure that payroll charged to the Coronavirus State and Local Fiscal Recovery Funds program were accurate and properly recorded, however, there was no evidence the control was performed. This lack of control resulted in variances between supporting documentation and what was recorded and paid. Effect of Condition: During testing, it was noted that there was no evidence that the key payroll control for the program was performed. This resulted in compliance findings and questioned costs. Context: A sample of 66 payroll checks paid with Coronavirus State and Local Fiscal Recovery Funds were selected to test controls related to allowable costs for payroll charged to program. The audit testing found no evidence of review by appropriate personnel of the 66 payroll checks charged to the program. This resulted in 10 of the 66 payroll checks having a variance of $391 when comparing supporting documentation of pay and what was actually recorded and paid. Recommendation: To ensure that salaries and wages charged to Coronavirus State and Local Fiscal Recovery Funds program are accurate and properly recorded, management should have appropriate personnel, outside of the personnel who prepared the payroll calculation, perform a review and sign-off once approved (either electronically within payroll software or on paper supporting documentation).