Finding Text
Small Business Administration Program Name: Shuttered Venue Operators Grant (SVOG) CFDA No(s) 59.075 Grant Number: SBAHQ21SV001236.2 Finding 2022-002 SIGNIFICANT DEFICIENCY Allowable Cost / Cost Principles and Allowable Activity Criteria: The Theatre?s policy is to have approval for any new salary or change noted on each salary authorization form, weekly payroll timecards should be approved by each department head and payroll registers be approved by the Director of Finance and Administration. Condition: Salary authorization forms for testing of payroll transactions charged to the SVOG (major federal program) were lacking approval of the authorized salary and there were four payroll periods tested where documented approval of the payroll run by the Director of Finance and Administration was missing. Context: Salary forms were initially provided during testing that had no approvals noted. The Theatre subsequently provided forms with the proper approvals. Four payroll periods tested had no documented approval of payroll by the Director of Finance and Administration noted. The Director of Finance subsequently affirmed approval. Through additional procedures and inquires, the auditor was able to determine that the payroll transactions in question were correct and approved by the appropriate responsible party. Cause: Controls surrounding approval of payroll were not operating properly. The approval of timecards is carried out in different ways depending on the department. Some department heads sign the timecards to approve them, some over email, and others approve over teams. There is no standard universal approval method. Effect: Multiple payroll forms were lacking documentation of approval. Recommendation: We recommend that the Theatre use a standardized method of authorized salary approval across the organization. Questioned Costs: None Management?s Response: We agree with the finding. Due to unexpected turnover in accounting personnel some procedures were not followed consistently. The Theatre will update their procedures and training to have consistent procedures followed.