FAC Explorer

Finding 4192 (2023-002)

Significant Deficiency
Requirement
AB
Questioned Costs
$1
Year
2023
Accepted
2023-12-13
Audit: 6504
Organization: City of Springfield (KY)
Auditor: Jones & Associates CPAS Psc

AI Summary

  • Core Issue: The City lacks adequate internal controls for accurate payroll processing.
  • Impacted Requirements: Compliance with generally accepted accounting principles for payroll expenditures.
  • Recommended Follow-Up: Implement a review process where a second individual checks payroll before submission.

Finding Text

Federal Program: Coronavirus State and Local Fiscal Recovery Funds AL#: 21.027 Federal Award Number: KY0283 Grant Period: 7/1/2022 – 6/30/2023 Federal Agency: U.S. Department of Treasury Questioned Costs: $5,667 Condition: The City does not have sufficient internal controls to ensure that payroll is processed correctly. Cause: During the course of testing, several issues were identified where employees were paid at an incorrect rate or for the incorrect amount of time. Effect: These issues resulted in questioned costs of $5,667. Criteria: Generally accepted accounting principles require that management design internal controls to provide reasonable assurance that expenditures, including payroll, are processed correctly. Recommendation: We recommend that the City implement additional controls to ensure that payroll is processed correctly. Payroll should be reviewed by a second individual prior to submission.

Corrective Action Plan

Upon receiving the notification that there was an inconsistency in our payroll, we immediately took the recommendation that we should have a second individual review payroll prior to submission. In addition to this, we have made the decision to leave the payroll company that we contracted with in March of this year (2023) and will begin processing payroll in house again. We made this decision due to various inconsistencies with the payroll company, including improper tax reporting and issues with pay rates changing after being entered. With the switch back to processing in house, we will continue to have two individuals review payroll before it is submitted.

Categories

Questioned Costs Internal Control / Segregation of Duties

Other Findings in this Audit

  • 580634 2023-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $780,177
20.205 Highway Planning and Construction $13,465