Finding Text
Federal Agency: U.S. Department of Health and Human Services
Federal Program Names: Child Care and Development Fund Cluster and Temporary Assistance for Needy Families
Assistance Listing Numbers: 93.575 / 93.596 / 93.558
Federal Award Identification Number and Year: 2024PRIORPORSUPPMA01 / 10020BOYSANDGIR01SP
Pass-Through Agencies: Commonwealth of Massachusetts, Department of Early Education/ People Acting in Community Endeavors, Inc.
Pass-Through Number: 2024PRIORPORSUPPMA01 / 10020BOYSANDGIR01SP
Award Period: July 1, 2023 through June 30, 2024
Type of Finding: Significant Deficiency in Internal Control over Compliance
Condition: During our audit of the financial statements for the year ended June 30, 2024, we identified a significant deficiency in the organization’s internal controls within the payroll processing procedures. Specifically, adjustments and approvals to payroll data were made after the payroll was transmitted to the third-party processor for payment. The adjusted information was not transmitted for processing.
Criteria or specific requirement: Processes should be in place to payroll information is properly reviewed and approved prior to transmitting for payment. Effective internal controls should be in place to ensure the payroll data is complete and accurate.
Effect: During testing of sample of 40, it was noted that one employee’s time card did not agree to the amount transmitted for payroll. As a result, the employee was paid $107 more in error. The sample was expanded to 60 and no additional instances were noted. Further review of the payroll processing timing resulted in a total of 6 identified errors in time transmitted and a total error of $547 in payroll expense due to the issue.
Cause: There were personnel changes in the department and the person charged with the transmittal of payroll information did not capture all approved adjustments prior to transmitting.
Repeat Finding: The finding is not a repeat of a finding in the immediately prior year.
Recommendation: The organization should ensure personnel overseeing the payroll process are appropriately trained. In addition, we recommend that the entity add an additional level of review to ensure such errors do not repeat.
Views of responsible officials and planned corrective actions: Management is in agreement with the finding and has initiated corrective actions to address the finding. Steps being taken include:
Restructured the department to ensure the personnel have appropriate skills and knowledge in
the processing of payroll
Payroll information transmitted is reviewed by the CFO on a regular basis.