Finding 480094 (2023-001)

Significant Deficiency Repeat Finding
Requirement
A
Questioned Costs
-
Year
2023
Accepted
2024-07-31

AI Summary

  • Core Issue: Significant deficiencies in payroll process due to missing documentation and approvals linked to payroll software issues.
  • Impacted Requirements: Compliance with internal controls for employee pay rates and timecard approvals, which should match payroll reports.
  • Recommended Follow-Up: Ensure adherence to the documented payroll process and maintain proper reviews and approvals for all timecards.

Finding Text

Finding 2023-001, Payroll Process (Second Year repeat comment): Information on the Federal Program - Assistance Listing Number 93.224 Health Care Center Program (Direct Health Center Program Cluster). Compliance Requirements: Activities Allowed or Unallowed. Type of Finding: Significant Deficiency in internal control over financial reporting and internal controls over Federal major programs Cause - Discussions with Organization employees indicate the cause of missing documentation, approvals and inconsistencies was due to an issue with the payroll software. Criteria - Based on documented internal controls, the Organization should be able to provide approved support for employee pay rates and approved time cards in which the documented hours agree to payroll reports. There should be no inconsistences between time on timecards and payroll reports. Condition - In 18 instances out of 40 items tested,, the timecard was not electronically approved either by employee or by supervisor. In one instance, one of the timecards did not have any hours recorded. Effect - The missing support and missing approvals could result in improper payroll expenditures. Questioned Costs - Zero Recommendation - We recommend the Organization follow the documented payroll process and ensure reviews and approvals are documented.

Corrective Action Plan

Finding 2023-001. Payroll Process. Recommendation: We recommend the Organization follow the documented payroll process and ensure reviews and approvals are documented. Response: NEFHS transitioned to a different third -party payroll provider as of January 2023. Many of the findings identified stemmed from a sample period that occurred two months into the transition period of payroll providers. The updates and adjustment made by NEFHS had very little time to materialize, however, we have incorporated hard stops within the process to prompt for required approvals of timecards by supervisors before payroll can be processed in full. NEFHS will also incorporate quarterly reviews to ensure the process is being administered as intended.

Categories

Reporting Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

  • 480095 2023-002
    Significant Deficiency
  • 480096 2023-001
    Significant Deficiency Repeat
  • 480097 2023-002
    Significant Deficiency
  • 1056536 2023-001
    Significant Deficiency Repeat
  • 1056537 2023-002
    Significant Deficiency
  • 1056538 2023-001
    Significant Deficiency Repeat
  • 1056539 2023-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
93.224 Consolidated Health Centers (community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) $2.21M
93.224 Covid-19 Consolidated Health Centers (community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) $914,977