Finding Text
2022-003 Payroll (Material Weakness) New Finding This Year Condition: The payroll manager has unrestricted access to the payroll system and is able to change rates of pay and leave balances. Internal controls to mitigate segregation of duties issues are not effective. Retroactve changes to accrued PTO were made several times in FY22 to make corrections to past pay periods. Criteria: Section 200.303 Internal Controls of the Office of Management and Budget?s Uniform Guidance outlines the following requirement: ? The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States. Cause: A lack of segregation of duties has resulted in the payroll manager having unrestricted access to the payroll system. Effective internal controls to mitigate the related risks have not been implemented. Effect: The School is at risk of not being in compliance with the OMB Uniform Guidance. This weakness in internal controls allows for potential misapplication of PTO and approved pay rates, which could result in unallowable expenditures being charged to federal programs. Recommendation: Management should restrict payroll module access to those with a logical need for such access. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan. (repeat finding 2021-003) Condition: The School was unable to locate records indicating character investigations had been performed for all employees in positions that involve regular contact with children. Criteria: The Office of Management and Budget?s (OMB) Compliance Supplement states, ?The Indian Child Protection and Family Violence Act (25 USC 3201 et seq.) requires Indian tribes and tribal organizations that receive funds under the ISDEAA or the Tribally Controlled Schools Act to conduct an investigation of the character of each individual who is employed or is being considered for employment by such Indian tribe or tribal organization in a position that involves regular contact with, or control over, Indian children?. The Act further states that the ?Indian tribe or tribal organization may employ individuals in those positions only if the individuals? meet standards of character, no less stringent than those prescribed under subpart B ? Minimum Standards of Character and Suitability for Employment (25 CFR part 63).? Cause: Management of the School did not adhere to written policy regarding the storage of character investigations (record retention). Effect: The School is not in compliance with the Indian Child Protection and Family Violence Act. Employees who have regular contact with and control over children may not be suitable for such a position. Persons may be employed at the School who may have otherwise been precluded from employment based on a character investigation. Recommendation: Implement existing policies that reflect the requirements of the Indian Child Protection and Family Violence Act. Views of Responsible Official and Planned Corrective Actions: See Corrective Action Plan.