Finding Text
Criteria - Internal controls require the Organization to make all its personnel service payments through the payroll system. Condition - Payments were made to employees for time worked and recorded but not entered in the payroll system. Short-term employees received payments outside of the payroll system for their contracted period of employment. Cause - Resulted from a lack of internal controls over financial reporting. Effect - The Organization is not following proper internal control procedures. Questioned Costs - None identified. Recommendation - We recommend that the Organization further develops its internal control policies to pay all employees through the payroll system. The Organization should work to improve the review and approval process to properly differentiate between employees and subcontractors and to ensure all employees are paid through the payroll system. Management?s Response - (a) Comments on the finding and recommendation: Duly noted. (b) Actions Taken: As mentioned above for audit finding 2022-004, we are going to have some specific guidance regarding this process once the HR consultant completes his project. We have already started putting short term contractors in the ADP (payroll system). (c) Anticipated Completion Date: July 31, 2023.