State University of New York
Office of the University Auditor
Summary of Office of the State Comptroller 2007-2008
Audit Findings on Campus Payroll Activities
April 16. 2008
To assist campuses in strengthening controls over the payroll function, we offer the following summary of recent payroll audit findings () and related recommendations () made by the Office of the State Comptroller (OSC). Campuses should review the list to determine if there are opportunities to improve their payroll operations.
- Payroll changes were not being reported to the campus office of human resources (OHR) in a timely manner, resulting in overpayments to individuals no longer employed by the campus.
- Formally remind the program units to submit changes in employees' work status to OHR timely to help ensure timely updates of PayServ. Issue further reminders periodically, as necessary.
- Periodically conduct independent checks of personnel and payroll changes. Such checks should be conducted by staff (for example, internal auditors) not otherwise connected with the payroll process.
- The payroll office was not conducting timely comparisons between paycheck distribution records and time and attendance records.
- Periodically compare payroll check distribution records to time and attendance sheets to ensure employees are submitting appropriate time records and are entitled to receive paychecks.
- Undelivered checks were not returned to the payroll office for verification that funds were owed to employees.
- Strengthen controls over the distribution of payroll checks to ensure payroll checks are distributed only to employees who are entitled to them.
- Inconsistent practice for recovering overpayments.
- Develop and implement a formal, structured process for the timely recovery of payroll overpayments.
- Inconsistent practice of referring payroll overpayments to the Attorney General's Office (AG) as required by OSC Payroll Bulletin 470.
- Refer uncollected overpayments to the AG for further collection action, as appropriate.
- Incorrect calculation and lack of supporting documentation of amounts owed from prior employees.
- Ensure that repayment requests to recipients of overpayments include the correct amount of the outstanding balances owed. Maintain complete, accurate, and current records of all overpayment recovery activity for each employee with an overpayment.
- Timesheets were incorrectly processed resulting in a retroactive adjustment to appropriately compensate employees for overtime worked.
- Establish a quality assurance function to help ensure that overtime reported on timesheets is properly calculated and paid in a timely manner.
- Lack of documentation to support retroactive adjustments.
- Maintain documentation summarizing the data used to calculate overtime adjustments. The documentation should also include the reason for the adjustment and authorization by an appropriate campus official.
- Excessive overtime charged as a result of "flexible" work schedules.
- Periodically review the propriety of the "flexible" work schedules used by staff, with focus on flexible schedules used in hospitals. Discuss the need for work schedules that contribute to overtime that might not be necessary.
- Instruct staff responsible for timekeeping to follow-up with program supervisors when the amounts of overtime indicated on timesheets appear questionable or excessive and document the appropriateness of the payment.
Retroactive Payroll Adjustments
- Employee start dates could not be confirmed.
- Routinely confirm and document the first day of work for all employees.
- Retroactive payroll adjustments were not reported to SUNY System Administration prior to submitting them to the State payroll system.
- Comply with SUNY System Administration policy for notification requirements for retroactive payroll transactions.
Other Recommendations Made Based on Overall Findings
Perform a risk assessment of the personnel-payroll cycle and take corrective actions
where payroll risks are not mitigated to an acceptable level. Monitor the steps taken
to ensure continued progress.
Other Sources of Information Pertaining to Payroll Activities
New York State Accounting System User Procedures Manual Internal Controls - Payroll Time and Attendance
Audit Issued by OSC Within the Last Four Years
OSC Payroll Services - Information for Payroll Officers
Statewide and All Agency Groups On Time Appointments*
Statewide and All Agency Groups On Time Separation*
In addition to this information, the New York State Payroll Users Group has created a "report card" that summarizes the number of on time appointments and separations for each campus. You may contact the Office of the State Comptroller to obtain a copy of your campus' report card.
For additional information, please contact the University Auditor at 518-320-1533 or Office of Human Resources at 518-320-1192