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Audit of Library Services Payroll

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

Form I-9 and background checks not conducted before the start of employment

United States Citizenship and Immigration Services (2023, November 3). Completing Section 1, Employee Information and Attestation, states, “Your employees must complete and sign Section 1 of Form I-9 no later than their first day of employment (the actual commencement of employment of an employee for wages or other remuneration, referred to as date of hire in the Department of Homeland Security regulations), but may complete Section 1 any time after they accept the job offer. ...” From a sample of 70 new hires Countywide, we identified one (1%) Library Services employee who completed and signed Form I-9 two days after starting their employment.
Salt Lake County Human Resources Policy 2-500: Background Check Requirements, Part II Procedures, Section A.1, states, “The Human Resources Division, in consultation with the relevant agencies and the District Attorney’s office, will identify and maintain a current list of designated positions and volunteer functions that are subject to background checks.” From a sample of 33 out of 127 Library Services employees hired during the audit period, we found that 15 (45%) had a Bureau of Criminal Investigation (BCI) clearance date, on average, occurring 18 days after their effective hire date.
Timecard approvals by individuals lacking sufficient authority
Government Accountability Office (GAO), December 2000 Publication, “Maintaining Effective Control Over Employee Time and Attendance Reporting,” states, “Primary responsibility for authorizing and approving [Time and Attendance (T&A)] transactions rests with the employee’s supervisor, who approves the employee’s T&A reports. Timekeepers and supervisors must be aware of the work time and absence of employees for whom they are responsible to ensure the reliability of T&A data.” From a random sample of 42 out of 634 employees, with over 11,900 timecard entries, 22 (52%) employees had 491 (4%) time entries approved by an individual that was not their supervisor according to PeopleSoft, or the individual’s job title and grade did not match that of a supervisor or manager. We noted an additional nine of the 42 (21%) employees with 63 (0.5%) time entries approved by an individual who was a supervisor or manager working in a different department than the department time was coded to.

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Auditor's Letter

March 2024


I am pleased to present the results of our audit of Library Services payroll operations for the period from September 1, 2021, to August 31, 2022. This audit was aimed at evaluating the adequacy and effectiveness of internal controls and compliance with fiscal ordinances, policies, and procedures in the Library Services Administration.

Our examination revealed several significant areas of concern that necessitate immediate action to enhance accuracy, efficiency, and compliance. These include issues with the timing of background checks, timecard approvals, confusion over retroactive pay responsibilities, documentation of bonus awards, lack of internal policies and procedures for exempt employees’ and employees working on-call hours, W-4 documentation requirements, compensatory time, and delays in access termination requests. These findings underscore the need for more stringent control measures, written procedures, and enhanced training to ensure compliance, mitigate risks, and improve overall operational effectiveness.

We strongly recommend that the Library Services Administration promptly review and implement the detailed recommendations in the attached audit report. Addressing these issues is crucial to safeguarding the operational and financial integrity of the county.

This audit was authorized under Utah Code Title 17, Chapter 19a, “County Auditor”, Part 2, “Powers and Duties.” We conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions.

We wanted to clarify that the $22 million in earnings mentioned in the Library’s management response letter, attached on page 34, pertains to payroll expenditures, representing earnings for 634 employees. During the audit we did not review or make any assertions regarding non-payroll revenue or expenditures.

We appreciate the cooperation and assistance provided by the Library Services Administration during this audit. For further information or clarification regarding this report, please feel free to contact me at 385-468-7200.

Chris Harding, CPA, CFE, CIA
Salt Lake County Auditor