Type of Finding: Significant Deficiency in Internal Control over Compliance
Federal Agency: U.S. Department of Defense
Federal Program Name: Conservation and Rehabilitation of Natural Resources on Military Installations
Assistance Listing Number: 12.005
Federal Award Identification Number and Year: H79TI083313 - 2020
Award Period: September 28, 2020, through September 27, 2025
Criteria or specific requirement: 2 CFR 200.303(a) states that a non-federal entity must "Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)."
Condition: During testing, 2 of the 60 samples selected had an individual approving their own timecard.
Questioned costs: None.
Context: A sample of 60 was made from a population of over 250 paychecks processed during the year with costs charged to the major program. Out of the 60 timecards that were sampled, there were two instances where the individual whose timecard was being reviewed also approved their own timecard.
Cause: At the time of these payroll runs, the Organization did not have procedures in place to identify an appropriate approver for the Executive Director's timecards.
Effect: Without appropriate segregation of duties around the approval of timecards, there is an increased risk of errors and fraud in the timekeeping and payroll process, which could result in inaccurate financial reporting and misappropriation of funds.
Repeat Finding: No.
Recommendation: CLA recommends that another individual with knowledge of the Executive Director's time and effort on the various programs approve his timecards. The Organization has already identified a member of the executive team to perform such functions and will implement the change going forward.
Views of responsible officials: There is no disagreement with the audit finding.
Action taken in response to finding: The organization has implemented a policy such that no employee can approve their own timecard. As noted above, the organization has identified an appropriate executive team member to approve the Executive Director’s timecard.
Name(s) of the contact person(s) responsible for corrective action: Gary Slater
Planned completion date for corrective action plan: 10/1/2024
If you have any questions regarding this plan, please call Gary Slater at 305-213-8829.