Internal Audit Report for payroll - Audit Plan

Taney County
Internal Audit Report for payroll—Audit Plan
Spring 2015
Italic numbers in gray cells are calculations that generally should not be altered.

General Computer Controls
Control Area Control Include in Testing? Notes
Payroll management Management maintains a comprehensive payroll plan that guides how the organization handles Yes In light of recent ethical issues within the industry, pay close attention to this item.
payroll. The plan covers areas that include skill alignment, head count, and investment for the
current fiscal year.
Payroll management A detailed budget has been established to guide payroll decisions throughout the year. The Yes
budget is reviewed on a monthly basis.

Payroll verification A comprehensive policy is in place that guides the organization's implementation of payroll. Yes

Payroll verification Timesheets are filled out by employees and signed by employee and immediate supervisor. Yes

Payroll verification Overtime is controlled by the supervisors. Yes

Payroll verification Payroll benefits including sick leave, personal leave, and holidays are monitored by supervisors. Yes

Payroll verification Timesheet calculations are monitored by supervisor and by payroll officer. Yes

Application development and A methodology has been formally established to guide the development of all internally No
change control developed payroll policies.

Application development and Systems are established to log and manage all payroll documentation. Yes
change control

Payroll and payroll operations An operations manual exists that details general payroll operations, including job logs of any No
changes in the payroll process.

Payroll and payroll operations Education is afforded employees and supervisors on the payroll operations. Yes

Payroll system A flow chart is available mapping the payroll operations. No

Payroll system There are checks in the system to guard against abuse of OT. Yes

Payroll system Transaction errors are logged so that users can take corrective action. Yes

Payroll system All transactions must be posted before the closing process can proceed. Yes

Payroll system System reports are generated and checked to ensure the accuracy of system output. Yes
Taney County
Internal Audit Report for Payroll—Audit Execution
Spring 2015
Italic numbers in gray cells are calculations that generally should not be altered.

General Computer Controls
Test in Current Control
General Control Area Test of Controls Notes on Results
Period? Evaluation
Payroll management Yes Obtain a copy of the most recent payroll plan, and review its contents for completeness, effective Ensure that a more detailed analysis of
relevancy, and accuracy. skills required is included in next year's
plan
Payroll management Yes Review the annual budget to determine completeness and accuracy. effective

Payroll verification Yes Obtain a copy of the most recent payroll policies, and review its contents for completeness, needs
relevancy, and accuracy. improvement

Payroll verification Yes Review a random sample of the timesheets for signatures. effective

Payroll verification Yes Ask managers and employees who controls OT. needs
improvement

Payroll verification Yes Review the random sample for the benefits and then check with supervisors for verification effective
that they are monitoring these.

Payroll verification Yes Review the random sample for the calculations of time. Also check with supervisors for effective
verification that they are monitoring and controlling these. Check with payroll officer to see if
they are monitoring calculations.
Application No Review change control methodology to ensure relevancy and completeness.
development and
change control
Application Yes Use the sample to determine if there are accurate and safe management of payroll effective
development and documents.
change control
Payroll and payroll No Review the payroll operations manual for relevancy and completeness.
operations

Payroll and payroll Yes Ask managers and employees about education for payroll functions they perform. needs
operations improvement

Payroll system No Review the payroll operations manual for relevancy and completeness. See if there is an
easily understandable flow chart included.

Payroll system Yes Review policies and procedures from the sample to determine if there is checks in place to needs
guard against abuse of OT. improvement

Payroll system Yes Review payroll documentation to determine this.

Payroll system Yes Review current system reports to determine if these might need updated or changed.
Taney County
Internal Audit Report for Payroll—Audit Recommendations
Spring 2015

General Computer Controls
Audit Recommendations

Finding:
The County has several employees that use vacation, personal, sick, or comp time in weeks to receive more than 40 hours when it is unnecessary.
Although the County’s current Personnel Policy does not state that you cannot use sick, vacation, and comp time to receive more than 40 hours per
week, there seems to be confusion between departments on whether this is allowed or not.

Recommendation:
The County might consider addressing and clarifying this situation so that it is handled consistently throughout departments. While the County does
have a small section in the Personnel Policy titled Payroll Procedures, some departmental payroll clerks and even some elected officials claim to have
inadequate training for processing and reporting payroll to the payroll administrator. There does not appear to be a clear policy or manual available to
payroll clerks on how to figure time or process timesheets. It may also be beneficial for the Payroll Administrator to have occasional review sections
with departmental payroll clerks to ensure that correct payroll procedures are being followed.

Finding:
Not all employees earning overtime/comp time note on their timesheet the reason or job they were working on that caused the additional hours. The
County Personnel Policy states that overtime needs to be pre‐approved unless it is deemed an emergency however most departments say verbal
approval is adequate.

Recommendation:

Require all non‐exempt employees to make notes in the comment section of their timesheet as good documentation or explanation for incurred
overtime. This will also make sure we have adequate documentation in writing on file with the Payroll Administrator for approved over time.

Finding:
The County Transfer Station has an excessive amount of overtime. Most work a 5 day schedule with a minimum of 9 hours per day. While the hours
of operation are M‐F 7:30 am to 5 pm and Saturday 8 am to 12 pm with the last customer taken at 4:30, there are numerous notations on timesheets
of “late customer”. The County paid over $34,000 in 2014 in overtime and comp time to employees in the Transfer Station. There are also R&B
employees that work at the Transfer Station on occasion and those people are not included in the figures above so it’s hard to get a true figure of
overtime/comp time. Although additional staff has been added over the past few years to alleviate excessive overtime, overtime amounts continue to
increase instead of decrease.

Recommendation:
The County could look at staggering work hours for employees to try to cut down on some of the overtime while still running efficiently. There may
need to be a cost analysis done on the hours of operations. That could allow the transfer station to change the hours of operation and still serve the
public. Or consider hiring a part‐time person if necessary.