Finding Text
Finding 2023-01
Payroll Procedures
Material Weakness in Internal Control
Condition: During our audit procedures we noted that the Business Office failed to adequately review payroll reports and communicate with the Human Resources department regarding new hires, terminations, supplemental payments, and salary placement during 2022-2023.
Criteria: A proper system of internal control is essential in order to prevent, detect and correct misstatements, as well as demonstrating accountability and stewardship.
Cause: The District did not properly follow its policies and procedures of comparing bi-weekly payroll summary packets and final payroll reports for significant variances, nor employee elections across departments.
Effect: Errors and/or fraud can occur and not be detected and corrected on a timely basis. Errors within payroll processing were identified and corrected by management, but no instances of fraud were detected.Recommendation: Implement safeguards to ensure responsible business office and human resources employees are held accountable for following procedures and increased communication to ensure timely and accurate payroll processing.
Management’s Response: Management will implement policies to improve communication between the business office and human resources department and implement safeguards to ensure responsible business office employees are held accountable for following procedures to ensure timely and accurate payroll processing.