Finding 529412 (2024-001)

Significant Deficiency
Requirement
P
Questioned Costs
-
Year
2024
Accepted
2025-03-21

AI Summary

  • Core Issue: Executives can approve their own timesheets, creating a significant deficiency in internal controls.
  • Impacted Requirements: Internal controls must ensure that all timesheets, including those of executives, are reviewed and approved by management.
  • Recommended Follow-up: Update procedures to require dual approval from the finance and housing directors for executive timesheets before payroll processing.

Finding Text

2024 - 001 - Internal Controls over Payroll - Timesheet Approval- Significant Deficiency Condition: During our testing of controls over payroll disbursements, we observed that executive personnel have the ability to review and approve their own timesheets within the Paycom system. Once submitted, there is no additional review or approval process for their time entries. Criteria: Internal controls over allowable costs and allowable activities should be properly designed to provide assurance of meeting compliance requirements and should operate effectively. Procedures should be in place to ensure supervisors or management approve all program staff timesheets. Cause: PCCDC has a review and approval process in place for all employees, except for executive staff. Effect: Without segregation of duties, there is a risk of management override, which can circumvent established control measures and increase the risk of fraud. This lack of control may lead to employees may be compensated for unworked hours, and employee time may be inaccurately allocated to the grant. Auditor's Recommendation: PCCDC should update its procedures to require prior approval of executive staff's electronic timesheets by both the finance director and housing director before payroll processing.

Categories

Internal Control / Segregation of Duties Allowable Costs / Cost Principles Significant Deficiency

Other Findings in this Audit

  • 529411 2024-001
    Significant Deficiency
  • 1105853 2024-001
    Significant Deficiency
  • 1105854 2024-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.871 Section 8 Housing Choice Vouchers $4.71M
10.415 Rural Rental Housing Loans $2.27M
10.766 Community Facilities Loans and Grants $991,860
93.568 Low-Income Home Energy Assistance $912,957
14.135 Mortgage Insurance Rental and Cooperative Housing for Moderate Income Families and Elderly, Market Interest Rate $643,933
10.427 Rural Rental Assistance Payments $547,432
10.447 Rural Multi-Family Housing Revitalization Demonstration Program (mpr) $385,481
14.850 Public Housing Operating Fund $357,625
14.197 Multifamily Assisted Housing Reform and Affordability Act $352,602
14.872 Public Housing Capital Fund $344,572
93.569 Community Services Block Grant $317,603