Finding 27970 (2022-004)

Significant Deficiency Repeat Finding
Requirement
AB
Questioned Costs
-
Year
2022
Accepted
2023-04-27
Audit: 23914
Auditor: Eide Bailly LLP

AI Summary

  • Core Issue: There was a significant deficiency in internal controls over payroll, leading to discrepancies between hours worked and hours paid.
  • Impacted Requirements: Compliance with 45 CFR 1630, which mandates effective internal controls for managing federal awards.
  • Recommended Follow-Up: DPLS should review and reinforce payroll policies and procedures with staff to prevent future errors.

Finding Text

2022-004 Legal Services Corporation CFDA #09-742018 Legal Services Corporation ? Basic Field ? General CFDA #09-742018 Legal Services Corporation ? Basic Field ? Native American Activities Allowed and Allowable Costs Significant Deficiency in Internal Control over Compliance Criteria: 45 CFR 1630 establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: One instance identified in which hours worked by an employee did not agree to hours paid. Cause: There was a lapse in oversight of the internal control process ensuring hours worked reconciled to hours paid. Effect: DPLS? controls did not detect or correct the errors identified, which results in a reasonable possibility that DPLS could submit disallowed costs under the federal award. Questioned Costs: None reported. The error was corrected in a subsequent pay period. Context/Sampling: A nonstatistical sample of 60 payroll transactions that had time charged to the LSC grants were reviewed. Total LSC direct payroll accounted for $539,572 out of $876,222 direct payroll expenditures. Repeat Finding from Prior Year: Yes. 2021-004 reported a similar finding over payroll. Recommendation: We recommend DPLS review payroll policies and procedures with applicable employees to ensure compliance with documented procedures. Views of Responsible Officials: Management is in agreement.

Corrective Action Plan

Legal Services Corporation CFDA #09-742018 Legal Services Corporation - Basic Field - General CFDA #09-742018 Legal Services Corporation - Basic Field - Native American Activities Allowed and Allowable Costs Significant Deficiency in Internal Control over Compliance 2022-004 Condition: One instance identified in which hours worked by an employee did not agree to hours paid. Auditor's Recommendation: We recommend DPLS review payroll policies and procedures with applicable employees to ensure compliance with documented procedures. Management's Response: The timesheets are initially being processed by the Administrator of the program. The timesheets are checked for accuracy in the time recorded by the employee, the employee leave balance is verified, and a check is done to verify that they have been reviewed by the supervisor of the employee. Finally, the hours recorded on the timesheet are reviewed to verify that they match the hours the employee has recorded in the Legal Server program. After these procedures have been completed the timesheets then go to the Deputy Director for further review and to verify the accuracy of the managing attorney timesheets. Note: The Executive Director provides review of the Deputy Director timesheet. Only after these procedures have been completed do the timesheets then go to the Administrative Assistant for payroll processing. Management will initiate a further step where all payroll amounts will be double checked by the Program Administrator prior to the issuance of payroll. Responsible Individuals: Michelle LoveJoy, Program Administrator, Tom Mortland, Executive Director, Annemarie Michaels, Deputy Director. Anticipated Completion Date: Immediately.

Categories

Internal Control / Segregation of Duties Allowable Costs / Cost Principles Significant Deficiency

Other Findings in this Audit

  • 27969 2022-003
    Material Weakness Repeat
  • 27971 2022-005
    Significant Deficiency Repeat
  • 27972 2022-006
    Significant Deficiency Repeat
  • 27973 2022-003
    Material Weakness Repeat
  • 27974 2022-004
    Significant Deficiency Repeat
  • 27975 2022-005
    Significant Deficiency Repeat
  • 27976 2022-006
    Significant Deficiency Repeat
  • 604411 2022-003
    Material Weakness Repeat
  • 604412 2022-004
    Significant Deficiency Repeat
  • 604413 2022-005
    Significant Deficiency Repeat
  • 604414 2022-006
    Significant Deficiency Repeat
  • 604415 2022-003
    Material Weakness Repeat
  • 604416 2022-004
    Significant Deficiency Repeat
  • 604417 2022-005
    Significant Deficiency Repeat
  • 604418 2022-006
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
09.742 Basic Field Grant - Native American $1.15M
09.742 Basic Field Grant - Basic $570,744
93.044 Special Programs for the Aging_title Iii, Part B_grants for Supportive Services and Senior Centers $44,066
16.815 Tribal Civil and Criminal Legal Assistance Grants, Training and Technical Assistance $40,583
09.742 Covid-19 Response Grant $9,387