Finding 478271 (2023-001)

Material Weakness

Requirement

Questioned Costs

Year

2023

Accepted

2024-07-11

Audit: 314941

Organization: Religious Coalition for Emergency Human Needs (MD)

Auditor: Lswg P A

AI Summary

Core Issue: Timesheets lacked necessary supervisor signatures, and some hours did not match payroll records.
Impacted Requirements: GAAP mandates effective internal controls, including proper timesheet approval to ensure accurate financial reporting.
Recommended Follow-Up: Ensure supervisors approve timesheets in the system or assign alternates; provide training to employees on timely submissions.

Finding Text

Criteria: Generally accepted accounting principles in the United States (GAAP) requires entities to establish and maintain effective internal controls over financial reporting to ensure accurate financial reports. A good system of internal controls requires contemporaneous timesheets be maintained for all employees and the timesheets should be signed by both the employee and the supervisor. Condition and Context: A payroll test was performed that encompassed all employees for two calendar months. Of the 137 timesheets selected for testing, 12 did not include the supervisor’s signature and 2 timesheets had hours that did not agree to the hours included on the payroll register. Cause: Management has represented that the supervisor was away and did not have access to the timekeeping system to approve the timesheets and gave verbal approval. Management has also represented that any hours submitted on the timesheet after the due date would not be included in the payroll. Effect: The approval by the supervisor was not able to be verified through the timekeeping system and the employees were not paid for hours worked as they missed the timesheet submission deadline. Auditor’s Recommendation: We recommend that management work with the supervisors to ensure they are approving the timesheets through the timekeeping system for documentation purposes or appoint an alternate approver in the absence of the assigned supervisor. Verbal approval is not an acceptable way of approving timesheets. We also recommend training for employees to ensure the timesheet hours are submitted timely. Views of Responsible Officials and Planned Corrective Actions: Employees are now notified when timesheets are due and are made aware of the processing deadline. Going forward, if a manger is taking time off, they will assign another manager to approve timesheets in their absence and this will be documented. Employees will also receive training from the payroll company applications.

Corrective Action Plan

Beyond Shelter Frederick, Inc. respectfully submits the following corrective action plan for the year ended September 30 2023. Name and address of independent public accounting firm: LSWG, P.A. Certified Public Accountants 1801 Research Blvd., Suite 320 Rockville, Maryland 20850 Audit Period: Year ended September 30, 2023. The finding from the September 30, 2023 schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. FINDINGS - FINANCIAL STATEMENT AUDIT Material Weakness 2302-001 Timesheets Auditor's Recommendation: We recommend that management work with the supervisors to ensure they are approving the timesheets through the timekeeping system for documentation purposes or appoint an alternative approver in the absence of the assigned supervisor. Verbal approval is not an acceptable way of approving timesheets. We also recommend training for employees to ensure the timesheet hours ae submitted timely. Action Taken: Employees are now notified when timesheets are due and are made aware of the processing deadline. Going forward, if a management is taking time off, they will assign another manager to approve timesheets in their absence and this will be documented. Employees will also receive training from the payroll company applications. If the Department of Treasury has questions regarding this plan, please call Nick Brown, Executive Director at (301) 631-2670. Sincerely, Nick Brown, Executive Director

Other Findings in this Audit

478272 2023-001

Material Weakness
478273 2023-001

Material Weakness
1054713 2023-001

Material Weakness
1054714 2023-001

Material Weakness
1054715 2023-001

Material Weakness

Programs in Audit

ALN	Program Name	Expenditures
14.231	Emergency Solutions Grant Program	$321,419
21.023	Emergency Rental Assistance Program	$180,878
14.228	Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii	$34,062
97.024	Emergency Food and Shelter National Board Program	$15,300
21.027	Coronavirus State and Local Fiscal Recovery Funds	$9,800