Finding Text
Criteria or specific requirement – Management is required to ensure that there
are sufficient internal controls in place over payroll costs charged to the program.
This includes internal controls that ensure that all supporting documentation is
retained to demonstrate compliance.
Conditions – Documentation supporting employee costs charged to the program
was unavailable or incomplete for some selections.
Context – During our testing of allowable costs and activities, we selected 18
journal entries for payroll testing. The 18 journal entries totaled $85,311. Of the
total, $67,576 were for transactions occurring in the year ended December 31,
2022 and $17,735 were for prior periods. The Organization provided us detail
listings for each of the 18 journal entries which included employees and charges
that supported the journal entry and we were able to make sub selections to the
employee level. For each employee selected, we were able to verify the validity
of the employee and the approved rate of pay. For 2022 transactions, we were
able to agree hours worked to approved time records. However, for transactions
occurring prior to 2022 time records were not available. Total payroll costs
charged to the program was $1,060,356.
Cause – For periods for which payroll records were not available, the Organization
was using a different payroll process system. As a result, such records could no
longer be accessed.