City of Hartford Finance Department Payroll Accounts and Operations Audit
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2.
Policies, procedures and controls were not documented in narrative form for many key processes and functions. One of the key processes where policies and procedures were not documented is relating to payroll error identification, investigation, follow-up and correction. During this review, we noted that error correction documentation needed improvement. 3.
Finance Department management indicated that action has been taken to reduce the number of standard payroll checks issued to employees and retirees; switch to net-zero checks to direct deposits and advices; and, switch hard copy direct deposit advices to email payment notifications. While Finance Department management indicated that improvements have been made in these areas, additional work will be required until all employees and retirees are paid in the most efficient and cost effective manner possible. 4.
Payroll processing procedural issues and errors that resulted in actual and potential overpayments were not addressed. a.
Two overpayments totaling $10,602 paid to one employee were not recovered. At the time of our prior audit, the Supervising Payroll Manager and a Workers Compensation representative from the Travelers agreed with this overpayment. This overpayment was reconfirmed during our current audit. b.
The MUNIS workflow process has not been changed to require that Department Heads or their designees review, approve and release departmental payrolls prior to payment. 5.
While Finance and Human Resources Department management took action to follow-up on and collect a majority of unpaid furlough balances totaling an estimated $16,600 due from 29 employees, approximately $1,400 still remains to be recovered from nine employees. 6.
Policies, procedures and controls relating to security and access to the MUNIS Payroll module were not documented. In addition, it was not clear that Finance Department management addressed the other MUNIS Payroll module system security and access control issues identified. 7.
Although Finance Department management informed us that they had implemented a new process to address the issues we previously identified with the payment of Military Leave, related policies and procedures were not documented and formally implemented with Department management. In addition, it was not clear that any action had been taken to follow-up on and determine the feasibility of recovering an estimated $37,000 in military leave related overpayments identified during our prior audit. 8.
It was not clear that Human Resources Department management had followed-up on and addressed all of the findings and recommendations relating to their operations. It should be noted that the Director position in the Human Resources department has turned over twice in the last two years. This included the following: a.
Monitoring, maintaining and adjusting as required employee accruals for earned time-off. Current Human Resources Management informed us that they were not aware of the previous audit report, however, several part-
time employees’
accruals were reviewed and zeroed out (they are paid for a certain number of hours if they meet a threshold of 750 hrs). Previously, the hours were just entered but never zeroed out when paid. In our recent year end processing report of accruals, we noticed this and they were corrected. We also have taken internal steps to ensure that accrual b
alances on Form B’s match MUNIS and make appropriate corrections as needed.
Current Human Resources management also indicated that they are not aware if a legal opinion was provided as to whether they can zero out balances once and employee leaves. As to the caps on certain accruals, last year was the last year to carry over 320 hours for