Finding Text
Finding Number: 2022-001 Repeat Finding: No Type of Finding: Significant Deficiency Description: Payroll Expenditures Condition: Out of the sample tested, there were two on-call employees in the Transportation program that were paid at their regular pay rate rather than the on-call rate. There was also one employee?s electronic timecard where there was a split of time noted, however there was no labor distribution filled out, thus Paychex defaulted to the ?home? program which is CSBG. This resulted in hours that were incorrectly charged to the CSBG program. Criteria: Internal controls are effective if they are properly designed and implemented to prevent or detect errors in payroll processing prior to the audit. Also, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Cause: The internal controls of the Organization were not effective in preventing or detecting and correcting the pay rates used to compensate the employees tested and labor distribution used to charge programs prior to the audit. Effect: Without proper review of pay rates entered in the system used to compensate employees and a review of labor distribution on electronic timecards, it is possible that grants could be over or undercharged. Recommendation: We recommend that a review of the pay rates and labor distribution on electronic timecards, be performed to ensure they are correct prior to payroll being processed, to ensure grants are charged for the correct amount of payroll expenses. View of responsible officials: Management agrees with the finding and has committed to a corrective action plan.