Flood Control and Engineering Services Payroll Audit
Scope
The scope of the audit was from September 1, 2021, to August 31, 2022.
Objectives
The audit objectives were to provide reasonable assurance that the internal controls in place are adequate and effective and that the payroll processes comply with all applicable fiscal ordinances, policies, and procedures. Areas of audit focus included the processes and procedures for the following:
- Onboarding of new employees
- Timekeeping
- Special allowances paid through payroll
- Overtime and compensatory time
- Reconciliations of payroll time and expenditures
- Offboarding of terminated employees
Report Highlights
Timecards Not Approved by a Supervisor and a Lack of Segregation of Duties in Approvals
We reviewed time entries for 18 employees that used PeopleSoft to enter their time. For 13 out of the 18 (72%) employees, 811 of 4,980 (16%) time entries were approved by an individual who was not their supervisor according to PeopleSoft, and the individual’s job title did not identify them as a supervisor or manager.
We also reviewed 13 employees that used Time Clock Plus (TCP). For two of the 13 (8%) employees, 47 of the 3,515 (1.3%) time entries did not have independent approval. In each case the employee approved their own time.
Badges Used to Clock In and Out Not Secured
Fourteen Flood Control and Engineering Services employees used a physical TimeClock Plus (TCP) time clock to clock in and out of work. A time clock was installed at the entrance to the Flood Control Crew Room. We observed a sample of five employees using the time clock and found that all employee time clock badges were stored next to the time clock, in a cardholder on the wall, making them accessible to all employees. The practice of leaving employee badges unsecured increases the risk of fraud, waste, or abuse, as employees could potentially clock in or out on behalf of others.
Agency Did Not Understand Retro Pay and Final Payout Responsibilities
During the audit period, Flood Control and Engineering Services processed 18 retro payments and one final payout for a terminated employee. We found that, while documentation was on file explaining the reason for the payments, there was no documentation containing supporting calculations.
When system calculations are not reperformed and verified, and where procedures are not documented, key controls may not be in place and may degrade over time. Errors and omissions are more likely to occur and not be detected. Employees may be under or overpaid without detection.
