Corrective Action Plan for Current Year Finding
2023-001 – Internal Control over Allocation of Payroll
Description of Finding: The allocation of payroll between grants was inaccurate due to errors when restoring the allocation workbook used to calculate payroll as well as an employee changing programs and new position filled which were not reflected properly in the allocation.
Cause: Insufficient internal controls due to inadequate staffing.
Effect: Without ensuring the payroll allocation is proper based on time and effort records as well as predetermined program allocations, it is possible that grants could be overcharged, resulting in misstated financial statements and unallowable costs.
Corrective Action: DRM is committed to adequate staffing levels. Executive Management realizes the necessity for adequate staffing levels to maintain top notch internal controls. The following corrective actions will be taken to avoid the misallocation of payroll funds moving forward.
1. All program allocation updates in the payroll workbook will be completed by the CFO.
2. Any malfunctions in the payroll workbook will be reported to the CFO by the payroll processor before the Labor Distribution Report (LDR) is imported for time distribution.
3. The CFO will review the LDR for any anomalies prior to it being imported into the payroll workbook each pay period.
4. The CFO will review the predetermined program allocations in the payroll workbook monthly to ensure that they are accurate and current.
5. The CFO will compare the employee timesheets, LDR, and payroll expense report to the payroll allocations outlined in the agency budget each month.
Person(s) Responsible: Shannon Crocker, CFO
Timing for Implementation: Immediately