Finding Text
Finding 2022-003/ Repeat Finding 2021-004 / Repeat Finding 2020-004 Weakness in controls surrounding payroll expenditures. Programs: Child Nutrition Cluster, ALN #10.553; 10.555; 10.559 Title I grants to local educational agencies, ALN #84.010 Supporting Effective instruction state grants, ALN # 84.367 Special Education Cluster, ALN # 84.027; 84.173 Compliance Requirement: Allowable Cost Questioned Cost: Unknown Repeat Finding: Yes Criteria: The school district is charged with developing controls surrounding the payroll expenditure cycle that will provide for authorization of pay transactions through school board approval and the existence of time and attendance records. Controls should also include policies and procedures that will ensure compliance with the record-keeping requirements of federal wage and hour law. Finally, assignments for new employees should align to board approved duties and contracted descriptions. Condition: In our review of the controls surrounding payroll expenditures, we noted that the school board did not approve several supplemental amounts paid to district employees, including supplements for extra duties assigned. We also noted that employee time sheets were not being reconciled to pay. Cause: The cause is likely an oversight or lack of controls to ensure items were reconciled and approved appropriately. Effect: The effect is a breakdown in the controls surrounding the payroll expenditure cycle and exposure to risk of noncompliance with federal wage and hour law. Further, employees who are approved for one position are actually serving in a different capacity. When not reconciling to time sheets, employees could be overpaid or underpaid. Recommendation: We recommend that the school district comply with the recordkeeping requirements of the federal wage and hour law. We further recommend that all supplemental pay amounts be approved by the school board and that all employees be approved for the position/title that corresponds to their actual work assignments. We recommend the district reconcile to employee time sheets. View of Responsible Officials: The district will implement controls to ensure that all payroll expenditures are approved and documented within the board minutes.