FAC Explorer

Finding 32977 (2022-101)

Significant Deficiency
Requirement
B
Questioned Costs
-
Year
2022
Accepted
2023-01-08
Audit: 35766
Organization: Boys and Girls Club of Greater Scottsdale, Inc. (AZ)
Auditor: Fester &chapman PLLC

AI Summary

  • Core Issue: There are significant deficiencies in internal controls over payroll compliance, leading to errors in employee compensation.
  • Impacted Requirements: The Organization failed to meet the record-keeping standards set by 2 CFR 200.430(i)(1)(i), which requires accurate documentation for payroll charges.
  • Recommended Follow-Up: Implement internal control policies for regular reviews of employee pay records, timesheets, and time off approvals to ensure accuracy and compliance.

Finding Text

Section III - Federal Award Findings and Questioned Costs 2022-101: Significant Deficiency in Internal Controls Over Compliance: Payroll FAL No. and Name: FAL 84.425C COVID-19: Governor's Emergency Education Relief (GEER) Funds Award Number: None Federal Agency: US Department of Education Compliance Requirement: Allowable Costs Questioned Costs: None Criteria: In accordance with 2 CFR, ?200.430(i)(1)(i), the Organization should maintain records that are supported by a system of internal control which provides reasonable assurance that the charges are accurate. Condition and context: We noted the following errors out of a sample of forty payroll transactions that we tested for the payroll period ended August 20, 2021: 1) one employee was not credited for an approved pay increase, 2) one employee was not paid for 4 hours included on the timesheet as hours worked, and 3) one employee was paid for 40 hours that was not documented on a timesheet or otherwise supported by an approved time off request. Cause: Documentation was not sufficient to support all amounts paid to employees and internal controls were not effective in preventing payroll errors. Effect: There is an increased risk that employee compensation will not be paid accurately and amounts charged to federal programs will not be properly supported. Recommendation: To help ensure that charges to payroll expenses are properly supported and accurate, the Organization should implement internal control policies and procedures that requires periodic reviews of employee records as it relates to payrates, amounts recorded on timesheets, and time off approvals. Management's Corrective Action Plan is included at the end of this report.

Corrective Action Plan

CORRECTIVE ACTION PLAN YEAR ENDED JUNE 30, 2022 We have prepared the following corrective action plan as required by the standards applicable to financial audits contained in Government Auditing Standards and by the audit requirements of Title 2 U.S Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Specifically, for each finding we are providing you with the names of the contact people responsible for corrective action, the corrective action planned, and the anticipated completion date. Financial Statement Findings 2022-001: Significant Deficiency in Internal Controls Over Payroll Recommendation: To help ensure that charges to payroll expenses are properly supported and accurate, the Organization should implement internal control policies and procedures that requires periodic reviews of employee records as it relates to payrates, amounts recorded on timesheets, and time off approvals. Action Taken: The Organization concurs and has implemented the recommendation. Completion Date: During fiscal year ending June 30, 2023 Contact Person: Ivan Gilreath, President and CEO 2022-002: Significant Deficiency in Financial Statements Presented in Accordance with GAAP Recommendation: We recommend that the Organization implements procedures to help ensure the completeness of pledges receivable recorded in the financial statements and to document the methods required to record lease liabilities in accordance with GAAP as part of the financial closing process. Action Taken: The Organization concurs and has implemented the recommendation. Completion Date: During fiscal year ending June 30, 2023 Contact Person: Ivan Gilreath, President and CEO Federal Awards Findings and Questioned Costs 2022-101: Significant Deficiency in Internal Controls Over Payroll Recommendation: To help ensure that charges to payroll expenses are properly supported and accurate, the Organization should implement internal control policies and procedures that requires periodic reviews of employee records as it relates to payrates, amounts recorded on timesheets, and time off approvals. Action Taken: The Organization concurs and has implemented the recommendation. Completion Date: During fiscal year ending June 30, 2023 Contact Person: Ivan Gilreath, President and CEO

Categories

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

Other Findings in this Audit

  • 609419 2022-101
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.425 Education Stabilization Fund $768,247
21.027 Coronavirus State and Local Fiscal Recovery Funds $734,846
93.933 Demonstration Projects for Indian Health $14,705
16.726 Juvenile Mentoring Program $14,529