Elevate, Inc.

Condition: A significant deficiency of internal control over compliance was identified related to payroll transactions. Out of a sample of 60 payroll transactions tested, three (5%) of the employees were underpaid based on the time worked per timesheets and three (5%) of the employees were overpaid. Criteria: The Organization?s internal control system should be properly designed to ensure that only allowable costs are charged to grants. This includes ensuring information that is manually inputted is accurately reported to ensure that all expenditures are properly captured and employees are paid for the actual hours worked, and information input into the electronic timesheets is properly flowing over to the payroll reports. Effect: Failure to properly input time worked could result in employees being incorrectly paid for time worked and expenditures being incorrectly charged to grants. Statistical sampling was not used in testing. Cause of the Condition: The Organization incorrectly manually input hour information into the payroll software, and failed to identify errors between the electronic time sheets and payroll reports. Questioned Costs: $384 Repeat Finding: Yes, 2019-002 Recommendation: We recommend management review their internal control procedures surrounding time entry and comparison of actual time worked to payroll reports to ensure that employees are paid for the correct number of hours worked. We also recommend that management review their programming with the payroll provider to ensure electronic time sheets are properly rolled into the payroll reports. Views of Responsible Officials: Management agrees with this finding and their response is included in this corrective action plan.

Condition: Out of the 60 payroll transactions, four (7%) of the employees were underpaid based on the time worked per timesheets and three (5%) of the employees were overpaid. Corrective Action Plan: In addition to the current approval process, Elevate will require the Executive Director or the Associate Director to review and approve payroll detail prior to submission for processing by our outside payroll company. In addition, we will work with the outside payroll company to determine if additional programming can be incorporated into the processing to reduce the amount of manual intervention required. Finally, we will revise our Holiday policy to clarify paid time for holidays worked. Responsible Person for Corrective Action Plan: Executive Director Implementation Date for Corrective Action Plan: June 30, 2021

2019-002

Condition: Out of a sample of 80 payroll transactions tested, three (4%) of the employees were underpaid based on the time worked per timesheets and two (3%) of the employees were overpaid. Criteria: The Organization?s internal control system should be properly designed to ensure that information that is manually inputted is accurately reported to ensure that all expenditures are properly captured and employees are paid for the actual hours worked. Effect: Failure to properly input time worked could result in employees being incorrectly paid for time worked and expenditures being incorrectly charged to grants. Cause of the Condition: The Organization incorrectly manually input hour information into the payroll software. Questioned Costs: $152 Repeat Finding: No Recommendation: We recommend management review their internal control procedures surrounding time entry and comparison of actual time worked to manual time entries to ensure that employees are paid for the correct number of hours worked. Views of Responsible Officials: Management agrees with this finding and their response is included in this corrective action plan.

Condition: Out of a sample of 80 payroll transactions tested, three (4%) of the employees were underpaid based on the time worked per timesheets and two (3%) of the employees were overpaid. Corrective Action Plan: Elevate, Inc. will correct all errors identified during payroll testing by July 31, 2020. Going forward, Elevate, Inc. will contract with an outside payroll company to process payroll and is reviewing options for a timeclock software for employees to use that will be integrated with the payroll system. The electronic time clock will require all employee?s time to be reviewed and approved before it is imported into the payroll software for processing. The electronic process will also reduce the opportunities for errors in determining overtime hours. Mary Simon, executive director, will also review in detail the payroll data before it is submitted for final processing. Responsible Person for Corrective Action Plan: Executive Director, Mary Simon Implementation Date for Corrective Action Plan: Employees identified as being underpaid will be corrected by July 31, 2020 and payroll will be outsourced to a third party no later than December 31, 2020