GRAVES COUNTY FISCAL COURTLocal Government

The Graves County Fiscal Court Submitted Unsubstantiated Jail Payroll Costs For Reimbursement From The Coronavirus Relief Fund And Lacks Internal Control Over Jail Payroll The Graves County Fiscal Court submitted unsubstantiated jail payroll expenses for reimbursement from the Coronavirus Relief Fund (the Fund) administered by the Commonwealth of Kentucky?s Department for Local Government (DLG) during fiscal year 2021. Two of the three reimbursement requests the fiscal court sent to DLG, that included jail payroll costs, were tested. Testing of these two reimbursement requests yielded that five jail employees did not keep timesheets. There were also two instances where jail employees? timesheets did not match their payroll summaries, there were 44 instances where jail employees did not sign their timesheet to indicate the time reported was time they worked, and there were 55 instances where jail employees tested did not have adequate supervisor approval. Three instances were also found where sheriff?s office employees didn?t document their approval of their timesheets. Questioned costs of $55,302 were computed based on the two months of unsubstantiated salary charges for five employees that did not keep timesheets, and the two employees whose timesheets did not match the December 2020 payroll summary These issues are due to a weakness in the jailer?s payroll procedures. The jailer has given authority for a signature stamp to be used by his office staff to approve timesheets when he is not there. The signature stamp does not have controls in place to document who is using it, so supervisor approval cannot be determined. Furthermore, the jailer did not require salaried employees to keep timesheets. The two employees? timesheets that did not match were due to an error made when processing December payroll which was quickly fixed in January; however, it was reimbursed improperly as the hours were not worked during the time period agreed by the grant. Due to the jail having weak payroll procedures, questioned costs were generated and the risk of improperly paying employees is elevated. Strong internal controls require documented approval of timesheets by both the direct supervisor and the employee. This will protect both parties by ensuring that an employee?s hours worked are accurate and agreed upon by both the employee and the office. 2 CFR 200.303 states: ?The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.? Additionally, KRS 337.320(1) states, in part, ?[e]very employer shall keep a record of: (a) The amount paid each pay period to each employee; (b) The hours worked each day and each week by each employee[.]? We recommend the Graves County Fiscal Court implement internal controls over federal award reimbursements and the jail?s payroll. Reimbursement request should be properly supported prior to submission. The fiscal court should require the jail strengthen their internal controls over timekeeping records which includes employees? signature on timesheets as well as documented approval of all timesheets. Any deviations should be investigated and cleared prior to processing payroll .