Pago Pago, AMERICAN SAMOA — The Territorial Audit Office’s (TAO) performance audit for fiscal years ending Sept. 30, 2022 of the American Samoa Medicaid State Agency identified several issues of concern over the agency’s various timekeeping, personnel, and payroll practices.

The final part of the Samoa News reports on the performance audit, looks at the last finding, in which TAO calls for the Medicaid Agency — referred to as ASG Medicaid Office — to “improve various timekeeping, personnel, and payroll practices.”

BIOMETRIC TIME CLOCK

TAO’s first cited concern is that some Agency employees were not using the Biometric clock to document the hours they were at work. TAO review and inspection of staff attendance records confirmed that most of the employees didn’t punch into the Biometric Clock.

A Biometric Clocks requires employees to punch in and out using a fingerprint, palm, facial or iris scan.

“There was no reasonable explanation(s) given on why employees were not using the Biometric Clock system,” the auditors said and listed the names of the employees who didn’t punch in.

TAO points out that time tracking is an essential part of managing payroll expenditure and provides evidence on employee attendance. Additionally, it’s the responsibility of the supervisor or departmental head to review employee(s) timesheet(s) and validate hours worked before sending them to the payroll department for processing.

“In not using the Biometric Clock, there is an increased risk of paying employees for hours not worked as there is no way to efficiently validate hours worked by employees,” said TAO and recommend that Medicaid management enforce the use of the biometric clock system.

“The main advantage of using this system is that it is difficult to manipulate as it can only be activated using unique digital features applicable to each employee,” the auditors said.

In the response, Medicaid agreed, and noted that although this is a standard operating procedure known by staff and in our staff handbook, it needs to be reminded and enforced.

Another concern raised by TAO auditors is that the Medicaid Agency employees recorded payroll hours worked did not agree with the hours shown on the Biometric Clock. According to the auditors, attendance records generated by the Biometric system and that recorded on individual manual timesheets did not agree.

TAO also found that the Agency does not reconcile Biometric clock hours against the manual time sheets submitted to Payroll and as a result “we were unable to confirm the exact hours worked for selected employees.”

“Nevertheless, the manual timesheet hours were approved and paid without adequate review as to whether or not the employees actually worked the hours claimed,” the auditors said.

TAOA recommends the authorized timekeeper ensure that relevant documents are available for supervisory review, check and approval. The documents to be provided for review must reconcile the difference in hours recorded on the Biometric clock system and those claimed on the manual timesheets.

Medicaid management agrees and revisited these policies and will work with Human Resources to train staff on the keeping attendance and reconciliation of timesheets.

LEAVE POLICIES

TAO audit found that the Agency does not follow applicable leave procedures and policies and record keeping is not intact. Review of the Agency's administration of the leave policy found the following weaknesses:

• Instances where leave application forms were not securely filed. “We could not locate some of the employee applications leave forms either in their personal files or in the leave form file,” the auditors explained.

• Appropriate Leave Forms were not used and not properly filled out. TAO found that Administrator Division Head uses the e-copy leave form instead of the actual approved ASG Leave Form. In addition, TAO also found that some leave forms were not signed by employee(s).

The auditors said that failure of the immediate supervisor or departmental head to perform reasonable checks can result in administrative errors.

TAO recommends that the Agency comply with the DHR policies by using only approved ASG leave forms when requesting leave; and ensure that the Agency filed copies are securely maintained and in the proper order

Additionally, the designated supervisor or departmental head reviewing or approving the leave(s) must ensure all relevant information on the form(s) is correctly filled.

Medicaid management agrees and will proceed as recommended and train staff on leave policies and strengthen procedures on leave requests.

PAYROLL RECONCILIATIONS

Another finding by TAO is that the Medicaid Agency “does not prepare nor maintain payroll reconciliations.” The auditors explained that enquiries with the Administration Division Head confirmed that the Agency does not prepare payroll reconciliations and maintain them on a regular basis.

“The purpose of payroll reconciliations is to ensure employees are correctly paid,” the auditors explained. “Failing to reconcile can create problems in confirming the accuracy of payroll payments. This is a reflection of inefficient work and poor processes.”

TAO recommends, and Medicaid management agrees, for timely preparation of payroll reconciliations in the One Solution — the ASG Treasury accounting system — to ensure employees are correctly paid and statutory deductions discharged within the timeline.

SALARY ADJUSTMENTS

According to TAO auditors, Medicaid office “did not properly document the basis for employee salary adjustments” and audit testing revealed that employees received two salary adjustments within a nine months period.

“We were unable to verify the reasonableness of the later salary adjustment as the Agency had no documentation justifying the basis of the increment that was given to all employees,” said TAO in its finding.

Moreover, the Agency did not have performance appraisals in file to support the 2021 salary adjustments.

TAO noted that the benefit of having employee(s) appraisal evaluation assessments should be prepared to reflect individual employee achievements and performance and assist in determination of salary increments.

And the merits for any salary increase, which exceed the range established by law or the administration is usually documented on an individual basis.

Additionally, and subject to higher management authority, the organization may make salary increases for promotions and reclassifications or to address any salary inequities with sound justification and approval from DHR and fund availability clearance from Budget Office.

TAO recommends that the Agency document any salary adjustment(s) awarded to employees developed and in consistent with compensation practices across and within the ASG hiring and employment policies.

In its response, Medicaid management agrees and explained that salary increments were driven by overall ASG policies and to provide staff with equitable wages that align with the complexity and demands of their job description.

“Justification for salary increases all have to be made, agreed to and approved by DHR within allowable merit system standards,” said management. “Medicaid will proceed to provide all documentation on justification for salary increases in personnel files.”