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Audit of Facilities 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

No reconciliation procedures for external application data transferred to payroll software

For the ten pay periods tested during the audit period, an average of 50 of the 72 Facilities Services employees recorded their time using a separate work order and scheduling software. The Payroll Coordinator then manually entered the time into the County’s payroll system, PeopleSoft, to process payroll. No reconciliation was performed to ensure time matched in both systems. We sampled the entire population for 3 pay periods and found that time in PeopleSoft did not match the external system for at least one employee per pay period.

Timecard approvals by individuals lacking sufficient authority

We selected a random sample of 17 employees, with over 4,000 timecard entries, for review. In total, the employees had 289 (6.8%) time entries approved by an individual that was not their supervisor according to PeopleSoft and that did not have a title that indicated a supervisory or management role. Of significant concern we noted that the Fiscal Coordinator approved two of her own time entries. Additionally, there were 92 time entries by the Division Director and Associate Division Director that were approved by the Fiscal Coordinator or the Administrative and Fiscal Manager. Both individuals were either subordinates or peers.

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Auditor's Letter

 

January 2024

I am writing to present the findings of our recent audit of the Facilities Payroll operations for the period from September 1, 2021 to August 31, 2022. This audit aimed to evaluate the internal controls over payroll processes in the Facilities Department.

Our audit revealed several areas requiring urgent attention to enhance operational efficiency and compliance with established standards. It highlighted a lack of reconciliation between personnel action forms and payroll data, inadequacies in leave balance verifications, and insufficient documentation for employee time adjustments. The report also pointed out weaknesses in the oversight of payroll processing and a need for improved training for staff responsible for payroll functions. Additionally, the audit found discrepancies in overtime payments and inconsistencies in the application of payroll policies, emphasizing the need for more stringent control measures and regular audits to ensure compliance and accuracy in payroll operations. These issues indicate a need for more robust internal controls and stricter adherence to existing procedures to mitigate potential risks to operational effectiveness and regulatory compliance.

We strongly recommend that the Facilities Department promptly review and implement the recommendations detailed in the attached audit report. Neglecting these issues could pose significant risks to the county’s operational and financial stability.

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 appreciate the cooperation of all involved departments and offices during this audit. For further details, please refer to the enclosed detailed audit report. Should you require any further information or clarification, please do not hesitate to contact me at 385-468-7200.

Chris Harding, CPA, CFE, CIA

Salt Lake County Auditor