Finding Text
U.S. Department of Transportation FEDERAL TRANSIT CLUSTER 20.507 Federal Transit Formula Grant (applies to all grants) 20.526 Section 5339 Formula Apportionment 2022-006 Activities Allowed or Unallowed Allowable Costs/Cost Principles Criteria: Establishment of a payroll file enables accounting personnel to pay the employee without accessing employee confidential information which is maintained in a personnel file. Accounting and Finance personnel can keep payroll records in a secure location. Proper internal controls to ensure proper payment to employees would require that payroll files be updated with proper documentation to support wage rates paid to personnel. Condition: This is a repeat finding from 2021. During our testing of internal controls over payroll, we noted for 10 out of 65 individuals selected for testing, no documentation existed for the approval of the current rate of pay. We were able to verify the pay rates appeared appropriate through other audit procedures such as review of the positions and comparison of pay rates to prior year records. The population was all payroll. This is not a statistically valid sample. Questioned Costs: None. Cause: Turnover in key personnel in the human resources and finance departments resulted in the lack of documentation in payroll files.Effect: The System is unable to demonstrate that wages paid to all of its employees is appropriately approved. Recommendation: We recommend that the System adopt written policies and procedures to ensure that documentation of approved pay rates is maintained. View of Responsible Official: The Agency has contracted with a vendor to provide them with assistance in ensuring the system of record is properly set up to maintain and track all pay updates and changes.