Finding 570915 (2023-002)

Significant Deficiency
Requirement
B
Questioned Costs
$1
Year
2023
Accepted
2025-07-10
Audit: 361880
Organization: YWCA New Hampshire (NH)

AI Summary

  • Core Issue: Payroll documentation is inadequate, with missing approved pay rate forms and unapproved timecards leading to potential inaccuracies in employee payments.
  • Impacted Requirements: Compliance with 2 CFR 200.430 is compromised, weakening internal controls over payroll and increasing the risk of over- or under-payment.
  • Recommended Follow-Up: Review and strengthen payroll policies, ensure all pay rate forms are approved and maintained, and implement a formal process for timecard approval and review.

Finding Text

Criteria: Payroll payments are based on the timecard submitted for work performed, and the approved rate of pay the employee is entitled to. Time and effort requirements are outlined in 2 CFR 200.430. Condition: In testing payroll transactions, there were numerous instances of inadequate documentation for payroll. There were missing approved pay rate forms and lack of supporting documentation for stipends and differentials paid. There were timecards submitted for support of the payroll which were unapproved, mathematically incorrect, and/or which did not agree to the payroll paid. Cause: The lack of formal processes and procedures for payroll documentation paired with the limited oversight of payroll processing resulted in insufficient supporting information for payroll payments made. Effect or potential effect: Internal control over the financial activities of the YWCA New Hampshire is weakened. Failure to maintain accurate supporting documentation for payroll increases the risk employees are over- or under- paid for work performed. Questioned costs: The questioned costs are unknown, as the amount of payroll that could have been inappropriately charged is unable to be recalculated at this time. Context: The YWCA New Hampshire expended in excess of $750,000 in federal awards and assistance during the year ending June 30, 2023 requiring a compliance audit in accordance with the Uniform Guidance. The organization has not required a compliance audit in previous years and management was not aware of the various requirements of the Uniform Guidance. The payroll deficiencies were a systemic problem noted during the audit. Recommendation: Policies and procedures surrounding payroll should be reviewed with all relevant personnel. Rate of pay forms should be maintained for each employee, signed and approved, and updated for any rate changes. Formal pay rates should be established for all shift differentials and stipends. Timecards should be appropriately completed each week, approved, and reviewed during the payroll processing. Views of Responsible Officials: YWCA New Hampshire’s management concurs with this audit finding.

Corrective Action Plan

Description of Finding: Payroll documentation was found to be inadequate, as there were missing approved pay rates, lack of supporting documentation for stipends and differentials paid, and timecards submitted which were not approved, mathematically incorrect, and/or which did not agree to the payroll paid. Planned Corrective Action: To strengthen internal controls over payroll, YWCA New Hampshire will implement the following: 1. Payroll Policy Revision: Update the Payroll Policy to require documented approval of pay rates, stipends, and differentials, with all documentation retained in employee files. 34 2. Timecard Approval Process: Implement an electronic timekeeping system by July 31, 2025, requiring supervisor approval of timecards before payroll processing. The system will flag mathematical errors and discrepancies. 3. Training: Provide training for supervisors and payroll staff on the new timekeeping system and documentation requirements by August 15, 2025. 4. Reconciliation Process: The Payroll Coordinator will perform a monthly reconciliation of timecards against payroll records, with discrepancies investigated and resolved before finalizing payroll. 5. Audit Checks: The CFO will conduct quarterly audits of payroll records to ensure compliance with the updated policy, with results reported to the Executive Director. Responsible Party: Payroll Coordinator and Finance Manager, overseen by Caroline Catlender, Executive Director Anticipated Completion Date: August 15, 2025

Categories

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

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
16.575 Crime Victim Assistance $252,827
14.218 Community Development Block Grants/entitlement Grants $173,991
93.493 Congressional Directives $94,240
14.267 Continuum of Care Program $60,543
16.736 Transitional Housing Assistance for Victims of Domestic Violence, Dating Violence, Stalking, Or Sexual Assault $36,334
16.017 Sexual Assault Services Formula Program $31,629
93.671 Family Violence Prevention and Services/domestic Violence Shelter and Supportive Services $28,302
93.136 Injury Prevention and Control Research and State and Community Based Programs $15,310
21.027 Coronavirus State and Local Fiscal Recovery Funds $10,000
16.588 Violence Against Women Formula Grants $9,321