Finding Text
Finding 2023-002 – Internal Controls over Payroll Tracking & Recording
Assistance Listing #: ALL
Federal Awards: All
Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs.
Condition: During our testing of 40 payroll transactions, we noted five instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award.
Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed.
Effect: The effect of the errors noted above did not exceed $850.
Although the overall errors were immaterial, an inherent risk exists that errors could be material and not be detected and corrected without sufficient review.
Questioned Costs: N/A
Repeat Finding: No
Recommendation: We recommend the Organization review its current processes over payroll to ensure that payroll costs are captured and recorded correctly in the financial management system.
Response: We concur with the Finding. The CFO will immediately evaluate the need for additional controls to ensure accurate recording of time charged to program as reflected on the employee’s timesheet.