Think SmallNon-Profit

2020-003 Type of Finding: Material weakness in Internal Control over Compliance Condition: During our testing, we noted that Think Small changed processes for wage rate approvals to an electronic approval starting in January 2020. However, we noted six instances (out of a sample of 15) of no approvals on the wage rates. We also tested one employee who was paid an incorrect wage rate on the payroll report. Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award Subpart E ? Cost Principles requires compliance with the provisions of allowable costs. Think Small should have internal controls designed to ensure compliance with those provisions. Context: While performing audit procedures, we noted employee wage rates did not have evidence of review by their supervisor and one employee was paid an incorrect amount. Cause of condition: Employee wage rates did not have evidence of review by their supervisor and one employee was paid an incorrect amount. Effect: A lack of review increases the possibility that errors or irregularities may occur and not be detected. Cause: Think Small?s controls were not designed in a manner to ensure wage rates were formally approved and that all employees are paid an amount equal to their approved wage rates. Recommendation: We recommend that the employee?s supervisor review and document approval on their wage rate. Further, we recommend that employee?s wages rates are reviewed when entered into the CBIZ payroll system, to ensure that an individual is being paid the correct amount. Our audit did not disclose any matters required to be reported in accordance with 2 CFR 200.516(a).