Pago Pago, AMERICAN SAMOA — The American Samoa Visitors Bureau “needs better controls over its timekeeping and payroll processes” is another finding identified by the Territorial Audit Office during its Performance Audit of the Bureau for three fiscal years ending Sept. 30, 2022.

Part four of the Samoa News coverage of the TAO audit looks at this finding, which the auditors noted that internal controls over timekeeping and payroll processes are necessary to ensure that employees are paid for only the hours worked and at the correct pay rate.

However, the auditors found that the Bureau has not established adequate controls for timekeeping and payroll. Specifically, the Bureau does not: effectively track all employees working hours; document timesheet reviews; adequately review payroll transactions; properly monitor leave usage; and properly document employee’s information in its files.

“As a result, the Bureau cannot provide adequate assurance that employees were paid for the correct number of hours worked and at the correct pay rate,” the auditors said, adding that the “Bureau did not effectively track all employee working hours.”

According to the report, TAO determined that the Bureau did not effectively track all employee work hours because it has not established timekeeping mechanism such as a time clock, biometric clock, or attendance book/sign-in sheet) to record employee time and attendance.

Thus, employees are allowed to record their hours worked on their timesheets without an independent source to verify the accuracy of the hours reported. Additionally, the Bureau has not established adequate oversight or monitoring process to identify process issues and potential abuses.

“This indicates the lack of a strong tone at the top regarding the importance and accountability of accurate time and leave recording,” the auditors said.

The auditors also found that the “Bureau does not document reviews of employee timesheets.” The report says that Internal Control Policy on Payroll implemented in 2009 requires the Executive Director to review and approve employee timesheets prior to processing them for payment.

The Bureau’s Executive Assistant manually prepares payroll timesheets on a bi-weekly basis. Timesheets are then forwarded to the Executive Director for review and approval. Sometimes, the Executive Director is not present at the office and Executive Director’s approval is given by email. “It is typically the Executive Director’s responsibility to review and make adjustments if needed and evidence of such reviews should be documented,” the report said.

According to the auditors, the Bureau is not following the Internal Control Policy requiring review and approval of timesheets. “For instance, between FY20-FY22, we did not see evidence of the Executive Director’s review and approval for 21 payroll periods. Without a proper review and approval, errors or inappropriate of work hours in timesheets can go undetected,” the auditors explained.

Another issue cited by the auditors is that the “Bureau does not properly document employment information in its personnel files”. The report says that Bureau currently has eight active employees and its hiring process is performed internally and does not go through the ASG Human Resource Department. Therefore, the Bureau is the sole custodian of its personnel records.

TAO suggests that the Bureau should maintain complete personnel files on all its employees. And these files should include the names of employees, social security numbers, emergency contacts, hiring documentation, performance evaluations, training records, compensation, and work-related agreements. Poor file maintenance resulting from missing or not updating records may violate legal requirements.

“Our observations and inquiries with management... revealed that the Bureau does not maintain complete information of employees’ employment as required by its Internal Control Policy,” the auditor said.

Another issue of concern is that the Bureau “does not properly monitor leave usage.” TAO says that the Bureau’s eight full-time equivalent employees accrue leave time for absences such as sickness, personal time off, and vacation. However, the Bureau has no established formal process for reporting and recording employee leave.

TAO outlined two weaknesses that it says may have contributed to the leave time discrepancies:

•           The accuracy of attendance and absence time reporting is heavily reliant on the Executive Assistant and Executive Director to ensure they are monitoring time appropriately.

•           The Internal Control Policy procedures are not sufficiently detailed for effective training, resources and guidance to illustrate the necessary steps required to ensure accurate time reporting and leaves entitlement.

TAO offered four specific recommends for the Bureau in order to address internal control weaknesses on this finding:

•           Establish a method of time reporting and attendance to provide an independent verification of the hours the employees report on their timesheets.

•           Ensure that evidence of review and approval should be clearly noted on all payroll timesheets.

•           Maintain complete personnel information on current and former employees. These records should be kept in a secured area with access restricted to those designated employees with authority to review the files such as supervisors and or manager.

•           Work with employees and review employee calendars, emails, and other supporting documentation to determine if employees have unrecorded leaves and any leave adjustments detected should be adjusted accordingly.

In its response, the Bureau acknowledged the recommendations and that actions are taken to address the finding.