Pago Pago, AMERICAN SAMOA — The Territorial Audit Office has voiced concerns over the lack of segregation of duties, when it comes to payroll processing for the Health Department and urged the department to strengthen internal control over payroll processing functions.

This is one of the issues listed under “Other Matters” that was identified by TAO during its Performance Audit report of the more than $14 million in federal CARES Act funding awarded to DoH during the COVID pandemic.

Part ten of the Samoa News report on the DoH audit, looks at: “Strengthen Internal Controls over Payroll Processing” identified under the “Other Matters” section of the report, which points out that a prerequisite to a good system of internal controls is maintaining adequate segregation of duties between employees so that no one employee or small group of employees have complete control over a particular financial transaction from beginning to end.

“Good internal controls over the payroll processing function ensure that one employee is not in a position to initiate and approve transactions,” said TAO auditors. “Our review of internal controls over the payroll process indicated a lack of segregation of adequate duties, which results in an internal control weakness.”

The auditors said it identified that a number of time sheets were reviewed and approved by the supervisor - as indicated by signatures on time sheet documents.

“This indicates that one person has performed two roles which are incompatible functions that results in the lack of segregation of duties and internal control weakness,” TAO said. “When there is a lack of adequate segregation of duties with any process, compensating internal controls should be implemented to mitigate the risks related to the existing control weakness.”

In its recommendation, TAO said the DoH’s head of finance shall ensure that adequate segregation of duties is in place and the person should review timesheets and related payroll documents as a compensating control for insufficient segregation of duties.

For the DoH response, management said the department “concurs and will remind our finance/payroll team to thoroughly check the timesheets as well as all other tasks to make sure segregation of duties' principle is complied with.

Furthermore, the DoH chief financial officer will be reviewing the payroll process before the final approval by the director.