HR Audits: What, Why, and How

Conducting the Human Resources Audit

Strategic HRD

06/12/03

What keeps you awake at night?

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What is an HR audit?
An HR audit is a process to review implementation of your institutions policies and procedures, ensure compliance with employment law, eliminate liabilities, implement best practices and educate your managers.

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The audit should be:

Proactive Reactive

Informative
Developmental

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Why conduct an HR audit?

Ensure compliance

Improve HR practices Train your managers Prepare for potential government audit or litigation Gain an understanding of departments environment

Show a good faith effort

Correct errors
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Audit Tools:
Interview

Document review

Questionnaire
Sampling

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What is the audit testing?

Compliance with employment law

Compliance with institution policies/procedures

Training opportunities

Department environment
Potential liabilities Accuracy of records Managers understanding of law/policies/procedures
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Before you begin the audit process

1. Determine who will conduct the audit.
Internal vs. External

2. Secure senior management commitment.

a. Are they ready to fix whats broken, even if it costs $$$$? b. Do they agree with the methodology? c. Will they allow access to all departments/information? d. Will they publicly support the process?
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Before you begin the audit process

3. Define the parameters. a. Who will be audited?

b. What do you want to audit?

c. What audit tools will you use? d. How will the process be rolled out?

e. How will results get reported?

f. Who will get the results?
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Before you begin the audit process

4. Introduce the audit process to your managers.

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How do you introduce the HR audit to your managers?

1. Explain the reason for it. a. To protect them and the institution b. To help them understand policies, procedures, and laws c. To gain a better understanding of their department d. To help them set best practice procedures

e. To avoid costly and time consuming litigation

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How do you introduce the HR audit to your managers?

2. Give them a copy of the questions before the interview. If you have an intranet, post the questions on it.

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Departmental Audits What should you be concerned about?

Record Keeping Sick and vacation tracking Employee Files What is and isnt in the employee file Access to the file

Overtime reporting
FMLA application

Safety and security of the files Temporary worker tracking Accessibility/safety/security of records Accuracy of records
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Departmental Audits What should you be concerned about? (contd)

Managers Understanding of Policies/Practices How to handle complaints of harassment

How to calculate/report overtime

Difference between exempt and non-exempt Giving employment references

Affirmative Action requirements

FMLA Consistency applying policies and procedures
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Reporting the Results

Compile your findings in a draft letter

Allow department head/manager to review your draft and make comments/corrections

Compile final version

Present report to senior management Copy department head/manager

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Remember.
Allowing a department head and or manager to review your draft is not a license for him/her to change your findings. The findings are not negotiable!
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What should your memo contain?

Recognition of departments cooperation (or lack of it)
State the facts avoid opinions Document areas that need attention

Document areas where department was proactive, compliant, practiced good judgment
Suggestions on how to correct problem areas

Time line for follow-up

Offer Human Resources assistance
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Dont forget to conduct an audit in your own (Human Resources) department!

Benefits No phantom participants Compensation/Payroll Correct use of exempts vs. nonexempt status Employees are correctly graded Job descriptions are available for all position or grade categories Limited access to systems/records Social Security numbers are secure and only used when necessary
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Compliant with HIPPA

Paying correct rates

Review
Employee Relations
Correct documentation of investigations Warning/disciplinary letters

Training and Development

Programs are readily available to staff Tracking attendance

Policies and procedures are readily available to staff

Required posters are visible to staff Sick and vacation tracking is accurate
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Review
Records Employment/Recruitment

Employee files are kept in safe and secure area

Limited access to files

Staffing and selection paperwork

Affirmative Action forms Posting information

Necessary paperwork is readily available (job description, application, I9, W4, emergency contact) Certain records are kept separate from employee file (references, medical records, investigatory documents)

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Thank you!

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