Finding Text
2022- 009 ? Allocation and Documentation of Payroll Costs Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Homeless Services and CARES Assistance Listing Number: 14.231 Pass-Through Agencies: All Chicago and Chicago Department of Family and Support Services Pass-Through Numbers: N/A Award Periods: January 1, 2021 through December 31, 2022 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Opportunity Persons with Aids (RHHP) Assistance Listing Number: 14.241 Pass-Through Agencies: Chicago Department of Public Health and Aids Foundation of Chicago Pass-Through Numbers: N/A Award Periods: January 1, 2021 through February 28, 2023 Type of Finding: Material Weakness in Internal Control over Compliance Other Matters Criteria or specific requirement: Under allowable cost/cost principles, an organization in receipt of federal funding is required to have a system of controls in place to safeguard assets and ensure that only allowable costs are charged to federal programs. 2 CFR Part 200 states that changes to awards for salaries and wages are to be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: AL 14.231: In testing a sample of 40 payroll items, we identified the following: ? 6 out of the 40 transactions tested did not have proper timesheet approval. ? 29 out of the 40 transactions tested did not have proper approved pay rates. ? 33 out of the 40 transactions tested did not have supporting documentation for the specific employee?s payroll allocation. ? 1 out of the 40 transactions tested had an unexplained ? All payroll registers including these payroll transactions were not reviewed and approved prior to final payroll processing and submission. AL 14.241: In testing a sample of 40 payroll items, we identified the following: ? 4 out of the 40 transactions tested did not have proper timesheet approval. ? 33 out of the 40 transactions tested did not have proper approved pay rates. ? 38 out of the 40 transactions tested did not have supporting documentation for the specific employee?s payroll allocation. ? All payroll registers including these payroll transactions were not reviewed and approved prior to final payroll processing and submission. Questioned Costs: AL 14.231: $135 AL 14.241: None Context: Payroll transactions are not being properly documented, reviewed and approved throughout the payroll process. Cause: Employee time cards, approval of pay rates, time and effort studies (not performed), and payroll processing lacked supervisory review and approval. Effect: Inaccurate payroll costs may be charged to federal programs. Repeat Finding: This is not a repeat finding. Recommendation: Policies and procedures over the processing of payroll transactions should include the following: ? Signatory evidence of review and approval by both the employee and supervisor on timecards and time and effort studies performed to support employee payroll allocations; ? Signatory evidence on employees approved pay rates by the appropriate level of upper management and/or human resources; ? Signatory evidence of management?s review and approval of payroll prior to processing and disbursement. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding. All documentation substantiating a change/transaction will reflect the authorizing body approving such and confirmed against The Boulevard of Chicago?s policies. Name(s) of the contact person(s) responsible for corrective action: Shanan Egger, Chief Financial Officer Planned completion date for corrective action plan: September 2023