Finding Text
2024-002: Payroll Timecard Approval
Federal Departments: Department of Health and Human Services
Assistance Listing #: 93.612 and 93.959
Compliance and Internal Controls Significant Deficiency
Category of Finding – Allowable Costs/ Cost Principles
Criteria – 2 CFR § 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.
Condition – During testing, we noticed multiple timecards for the Executive Director were not approved by the responsible individual so the required supervisors’ review of the timecard for accurate hours and allocations did not occur and was not documented.
Cause – Controls in place did not operate as designed so hours charged to the grant were not properly reviewed for accuracy by responsible individuals.
Effect – Salaries or wages may be overcharged or undercharged to grant if program allocation is not documented. If the granting agency ever questioned costs, IPTF may not be able to prove that all the funds requested for reimbursement from the agency were for activities allowed under the grant.
Context – A nonstatistical sample of 28 payroll transactions were selected for testing. Timecard approval was performed by an unauthorized individual for 7 transactions.
Recommendation – We recommend the management implement and enforce a review process to ensure all timecards are reviewed by the responsible individual or responsible individuals in a timely manner.
Auditee’s comments and response – IPTF has hired and assigned an experienced individual within the organization who has the responsibility of reviewing and approving the Executive Director's timecard prior to processing.
Responsible party for corrective action: Sharon Day, Executive Director
Repeat finding – 2023-005