Finding 526726 (2023-002)

Material Weakness

Requirement

Questioned Costs

Year

2023

Accepted

2025-03-12

Audit: 345729

Organization: City of Alva (OK)

Auditor: Hspg & Associates PC

AI Summary

Core Issue: Two individuals have excessive access to payroll functions, including creating employees and changing pay rates.
Impacted Requirements: Lack of independent reviews for individual employee pay rates and missing approval forms for 11 employees.
Recommended Follow-Up: Implement a process for independent reviews of pay rates and ensure all pay rate changes have documented approvals.

Finding Text

Two individuals each have the ability to create a new employee, set up and make changes to employees’ direct deposit information, change pay rates, and make journal entries to record or adjust payroll. There are certain regular reviews of payroll expense amounts in total, but there are no documented reviews of the pay rates of individual employees by someone that does not have access to perform all activities within the City’s payroll process. In addition, there were 11 employees noted in our testing for which a signed pay rate approval form for the rate in effect for the selected pay period could not be provided.

Corrective Action Plan

Management concurs with the finding, and for fiscal year 2024-2025 the City will implement staff procedures whereby the City Manager’s full-access to the payroll system will be transferred to the Finance Director. The City Manager will remain independent of the payroll process but will maintain a read-only access to the system in order to fulfill the responsibility of periodically reviewing and approving individual payroll data and personnel adjustments. Furthermore, the City will maintain documented records of this process as evidence of its consistent operation.

Other Findings in this Audit

1103168 2023-002

Material Weakness

Programs in Audit

ALN	Program Name	Expenditures
20.106	Airport Improvement Program, Infrastructure Investment and Jobs Act Programs, and Covid-19 Airports Programs	$66,827
45.310	Grants to States	$198
21.027	Coronavirus State and Local Fiscal Recovery Funds	$0