FAC Explorer

Finding 524683 (2024-001)

Significant Deficiency
Requirement
B
Questioned Costs
-
Year
2024
Accepted
2025-02-27
Audit: 344111
Organization: Texas Association for the Education of Young Children, Inc. (TX)
Auditor: Sutton Frost Cary LLP

AI Summary

  • Core Issue: Three payroll transactions lacked proper management approval for time sheets, violating internal control procedures.
  • Impacted Requirements: The absence of segregation of duties led to self-approved time sheets, compromising compliance documentation.
  • Recommended Follow-Up: Implement a segregation of duties for time sheet approvals to prevent self-approvals and ensure compliance.

Finding Text

Criteria: The Organization’s internal control procedures over compliance stipulates that all time sheets be approved by the appropriate level of management. Condition: During allowable cost testing for federal grants, 3 out of the 70 payroll transactions tested did not have adequate time sheet approvals. These time sheets were self approved. Cause: The Organization had not implemented a segregation of duties surrounding time sheet approvals. Effect: The Organization’s reporting of time and effort was not fully documented, in accordance with internal control over compliance procedures. Questioned costs: None Recommendation: The Organization should segregate duties for time sheet approvals so that no time sheets are self approved. Management’s response: See corrective action plan.

Corrective Action Plan

Management Response: TXAEYC’s Payroll Processing section of the Accounting Manual will be updated to reflect the following changes: “Direct supervisors will review and approve their direct reports’ timesheets to ensure time is accurately recorded and all hours worked are assigned a cost allocation. The Director of Operations conducts a second layer of approval for all employee timesheets and processes payroll via the payroll platform. The Director of Operations may not process payroll without ensuring Supervisor Approval has been entered for all timesheets within the payroll platform. Additionally, the Director of Operation shall approve the timesheet of the Executive Director/Chief Executive Officer.” Parties Responsible and Timeline Updates to the Accounting Manual will be approved by TXAEYC’s Finance Committee and Governing board by April 30, 2025. The Director of Operation will implement changes to approved by the Finance Committee and Governing Committee immediately following their approval.

Categories

Internal Control / Segregation of Duties Allowable Costs / Cost Principles Reporting

Other Findings in this Audit

  • 524684 2024-002
    Significant Deficiency
  • 524685 2024-001
    Significant Deficiency
  • 524686 2024-002
    Significant Deficiency
  • 524687 2024-001
    Significant Deficiency
  • 524688 2024-002
    Significant Deficiency
  • 524689 2024-001
    Significant Deficiency
  • 524690 2024-002
    Significant Deficiency
  • 1101125 2024-001
    Significant Deficiency
  • 1101126 2024-002
    Significant Deficiency
  • 1101127 2024-001
    Significant Deficiency
  • 1101128 2024-002
    Significant Deficiency
  • 1101129 2024-001
    Significant Deficiency
  • 1101130 2024-002
    Significant Deficiency
  • 1101131 2024-001
    Significant Deficiency
  • 1101132 2024-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.371 Comprehensive Literacy Development $887,595
93.575 Child Care and Development Block Grant $662,283
21.027 Coronavirus State and Local Fiscal Recovery Funds $62,058