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 two
employees for payroll testing. For each employee selected, we were able to verify
the validity of the employee. However, we were not able to validate the approved
rate of pay.
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.
Effect – Complete documentation to support certain payroll transactions was not
available. We were able to verify the existence of the employee. We were also able
to verify that the amounts charged were reasonable based on the nature of the
program as well as subsequent activity. As a result, we considered the total costs
charged to the program to be reasonable. However, internal controls were not in
place related to the proper retention of records.
Views of Responsible Officials and Planned Corrective Actions — Management
agrees with the finding and in the future will take steps to retain or insure that
access to records continues to be available.