Finding 50047 (2022-002)

Material Weakness Repeat Finding
Requirement
ABEILN
Questioned Costs
-
Year
2022
Accepted
2023-03-28

AI Summary

  • Issue: A former employee manipulated wage rates during her last two pay periods.
  • Requirement: Segregation of duties in payroll is essential to prevent errors and fraud.
  • Follow-up: Review and strengthen payroll controls to ensure proper oversight and prevent similar incidents.

Finding Text

Another important aspect of the internal control structure is the segregation of duties related to payroll to prevent and/or detect and correct, in a timely manner, inappropriate transactions involving payroll resulting from error or misappropriation. We noted a former employee had falsified wage rates for her final 2 pay periods of employment with the District. See finding II-B-22.

Corrective Action Plan

The District did identify the wage rate falsification matter in a timely manner. We proactively worked with legal counsel, the Iowa Auditor of State, external auditors, the Glenwood Board of Education and our software vendor to appropriately report and resolve the situation. We have requested our school accounting system vendor, Software Unlimited, to develop a wage rate change report that can be regularly reviewed. The requested report is in process of development and will be included in an upcoming software maintenance release. We have received and reviewed a pay rate change query report from Software Unlimited for the months of January 2022 to April 2022 and no exceptions were discovered. Appropriate review procedures have been established to regularly review this report in the future. We have both contacted the insurance company and legal counsel both of whom indicated that this is a School District decision that does not need approval by either of them. We will also work on revising procedures to include documentation of administrative approval of employee time cards and we do have procedures for the Board President to sign all contracts entered into by the District that comply with Chapter 291 .1 of the Code of Iowa. We have enhanced internal procedures so that procedures are in place to allow for confirmation of all required payroll filings and to ensure that the filings are timely. Our procedures now include a requirement that all W-2 filings are confirmed by two individuals at the District. In addition, we have contacted the District insurance company and informed them of the situation so that a claim can be filed if needed to cover any penalties associated with the late W-2 filing.

Categories

Internal Control / Segregation of Duties

Other Findings in this Audit

  • 50046 2022-001
    Material Weakness Repeat
  • 50048 2022-001
    Material Weakness Repeat
  • 50049 2022-002
    Material Weakness Repeat
  • 50050 2022-001
    Material Weakness Repeat
  • 50051 2022-002
    Material Weakness Repeat
  • 50052 2022-001
    Material Weakness Repeat
  • 50053 2022-002
    Material Weakness Repeat
  • 50054 2022-001
    Material Weakness Repeat
  • 50055 2022-002
    Material Weakness Repeat
  • 50056 2022-001
    Material Weakness Repeat
  • 50057 2022-002
    Material Weakness Repeat
  • 626488 2022-001
    Material Weakness Repeat
  • 626489 2022-002
    Material Weakness Repeat
  • 626490 2022-001
    Material Weakness Repeat
  • 626491 2022-002
    Material Weakness Repeat
  • 626492 2022-001
    Material Weakness Repeat
  • 626493 2022-002
    Material Weakness Repeat
  • 626494 2022-001
    Material Weakness Repeat
  • 626495 2022-002
    Material Weakness Repeat
  • 626496 2022-001
    Material Weakness Repeat
  • 626497 2022-002
    Material Weakness Repeat
  • 626498 2022-001
    Material Weakness Repeat
  • 626499 2022-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
84.425 Education Stabilization Fund $1.74M
84.010 Title I Grants to Local Educational Agencies $236,326
10.553 School Breakfast Program $208,494
10.555 National School Lunch Program $132,154
93.778 Medical Assistance Program $103,798
84.027 Special Education_grants to States $89,583
10.559 Summer Food Service Program for Children $78,427
93.596 Child Care Mandatory and Matching Funds of the Child Care and Development Fund $51,292
84.367 Improving Teacher Quality State Grants $47,838
84.424 Student Support and Academic Enrichment Program $42,692
84.391 Arp Special Education Grants to States $13,821
10.558 Child and Adult Care Food Program $10,751
84.048 Career and Technical Education -- Basic Grants to States $9,528
93.575 Child Care and Development Block Grant $2,113