Audit of. August 12, 2005

Transcription

1 Audit of Payroll and Personnel August 12, 2005 Report

2 MISSIONSTATEMENT The School Board of Palm Beach County is committed to excellence in education and preparation of all our students with the knowledge, skills, and ethics required for responsible citizenship and productive employment. Arthur C. Johnson, Ph.D.* Superintendent of Schools School Board Members Tom Lynch, Chair William C. Graham Vice Chair* Paulette Burdick* Monroe Benaim, M.D. Mark Hansen Sandra Richmond Debra Robinson, M.D. Audit Committee Members Cindy Adair, Chair Richard Roberts, Vice Chair Max Davis Max Hirschhorn Kevin James Noah SHver David H. Talley Theo Harris* PamPopaca* Gerald A. Williams* *Ex-Officio Audit Committee Members

3 Audit of Payroll and Personnel Executive Summary The primary objective of the audit was to assess the adequacy of controls for payroll transactions. Based on a detailed review of payments to 170 employees, the audit produced the following major conclusions: 1. Controls Over Processing and Reporting Payroll Transactions were Adequate. We examined a variety of payroll transactions involving new hires, terminations, pay rate adjustments, payroll deductions and degree supplements, and found that: New hire positions were properly authorized at appropriate salary levels, and payroll data was accurately maintained in CHIPS. Terminated employees were appropriately deleted from subsequent payrolls, and final payments were accurately calculated. Pay rate adjustments were properly approved and accurately processed. Voluntary and mandatory deductions were accurately processed. Degree supplements were appropriately paid, and staff had verified degree credentials of sampled staff, with one exception. 2. Controls over Check Storage, Printing, Transfer, and Distribution Appeared Adequate. Access was limited to pre-numbered check documents. Check accountability forms, control logs, and transfer forms provided adequate control of check documents before, during, and after the printing process. 3. Payroll Checks Issued to Legitimate District Employees. We personally delivered pay checks and deposit advices to a total of 719 employees. We met employees at their work locations and inspected their District issued identification badge, or Florida driver's license. For 50 persons who receive their pay checks via the United States Postal Service, we reviewed CHIPS data to confirm that the persons were on record as having an "active" job within the District. We also contacted the work locations of these employees and confirmed their presence. We found that all persons were legitimate District employees. i

4 4. Overtime for Some Employees Could not be Reconciled to Supporting Documentation. For 9 or 53% of 17 employees selected within the Transportation Department's central compound, documentation for overtime hours was not available. Thus, we could not validate the accuracy of overtime payments made to these employees. Additionally, for 5 or 29% of the 17 employee overtime records reviewed, some documents did not clearly indicate the time "clocked in" or "clocked out". For 3 or 18% of the 17 employee overtime records reviewed, the daily overtime requests were not approved by a Transportation Coordinator as required. The Senior Coordinator should be required to approve all overtime requests. Additionally, the filing system for overtime documents should be improved to ensure all work hours are properly accounted for and documented. 5. Premium Overtime Pay Inconsistent With School Board Policy. Our review of overtime records of bus drivers revealed that several drivers were also employed as part time employees for School Age Child Care (SACC). This part time employment resulted in the payment ofpremium wages above the regular rate. School Board Policy 3.95 states "... no recommendation for dual employment under any circumstances should be made by a principal or department head that could result in a requirement for the payment ofpremium wages..., unless lack of such recommendation would be adverse to the best interests of the School Board. In the event that such a recommendation is made, the recommendation should point out the possible requirement for the payment ofpremium wages and should state that the appointment is in the best interests ofthe School Board." Audit ofovertime Payroll issued on September 17, 2002, indicated that School Age Child Care was paying premium wages to employees who held more than one job. At that time, the Personnel Services Department indicated that a justification section would be added to the Personnel Recommendation form, so Principals can explain their reason for hiring a full time permanent employee in a temporary position. Although the Personnel Action Recommendation form has been revised to require the authorization of the Community School Assistant Principal, a justification section has not been added to the form, and some SACC employees continue to receive premium wages without the required justification. ii

5 Audit of Payroll and Personnel Table of Contents Page PURPOSE AND AUTHORITY 1 SCOPE AND METHODOLOGY 2 BACKGROUND 2-3 CONCLUSION 1. Controls Over Processing and Reporting Payroll Transactions were Adequate Controls Over Check Storage, Printing, Transfer, and Distribution Appeared 8 Adequate 3. Payroll Checks Issued to Legitimate District Employees Overtime for Some Employees Could not be Reconciled to Supporting 9-11 Documentation 5. Premium Overtime Pay Inconsistent with School Board Policy APPENDIX - Management Response iii

6 THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA OFFICE OF DISTRICTAUDITOR 3346 FOREST HILL BOULEVARD, SUITE WEST PALM BEACH, FL (561) FAX: (561) LUNG CHIU, CPA DISTRICT AUDITOR ARTHUR C. JOHNSON, Ph.D. SUPERINTENDENT MEMORANDUM TO: FROM: Honorable Chair and Members ofthe School Board Arthur C. Johnson, Ph.D., Superintendent ofschools Chair and Members ofaudit Committee K"Lt.-. Lung Chiu, CPA, District Auditor DATE: August 12,2005 SUBJECT: Audit ofpayroll and Personnel PURPOSE AND AUTHORITY Pursuant to the District's Audit Plan of , we have audited the District's payroll for The primary objective ofthe audit was to assess the adequacy of controls for payroll transactions. Specific objectives were to: Assess the adequacy of the District's internal control system in ensuring the biweekly payments to employees for hours worked are authorized and accurate. Evaluate the accuracy oftime and attendance data. Determine ifpayroll deductions have been made correctly. Determine if pay rate changes and adjustments were authorized and accurately processed. Determine ifnew employee's positions were properly authorized and budgeted. Determine if terminated employees were promptly removed from the payroll system. Assess the adequacy of physical controls over the production and distribution of checks, including manual checks. Determine if paychecks are being issued to legitimate District employees that can be found at their work location during their scheduled work shift. Determine if overtime payment can be substantiated, and complied with School Board Policy. 1 AN EQUAL OPPORTUNITY EMPLOYER

7 SCOPE AND METHODOLOGY The audit was performed in accordance with Government Auditing Standards by Robert Bliss, CIA, and included: Reviewing School Board Policies and District procedures. Interviewing staff ofthe Payroll, Human Resources, and Information Technology Departments. Reviewing Bi-weekly Warrant Registers, personnel records and forms, CHIPS and TERMS data. Distributing payroll checks to employees in selected departments. Sampling. The audit covered payroll transactions occurring during Fiscal Year 2004 OS, and included a detailed review of payments to 170 employees. We sampled employees who were newly hired, terminated, received pay rate adjustments, and received degree supplements. We also sampled employees of the Maintenance and Plant Operations Department and the Transportation Department because both departments have geographically dispersed workstations, and have a large number of employees. Information from Payroll Warrant Registers and the Comprehensive Human Resources Information and Payroll System (CHIPS) was also used for our sampling and verification of source documentation. Draft conclusions were sent to the Payroll, Compensation and Employee Information Services, and Transportation Departments for review and comments. Management responses are included in Appendix A. We appreciate the courtesy and cooperation extended to us by staff during the review. The final draft report was presented to the Audit Committee at its TBD 2005, meeting. BACKGROUND The District's payroll function serves approximately 21,000 permanent and 3,000 temporary employees. During calendar year 2004, the District processed approximately 578,000 paychecks totaling $692,722,443. Basis for Computing Payroll. Permanent employees are paid based on contracted amounts and established salary schedules. Any deviations from the contracted hours are tracked and accounted for on an exception basis. Temporary employees, on the other hand, are paid based on the number of hours worked, and hours worked are tracked and accounted for on an affirmative bases. The processing of employee work time and their attendance is the basis for the payroll process. Time and attendance is the process of capturing the hours worked by employees so that they can be compensated accordingly. Schools and departments enter time and leave exceptions for employees into CHIPS for payroll purposes. CHIPS is the District's customized system designed to administer and process human resource functions, benefits processes, and payroll functions. CHIPS is utilized to 2

8 process payroll on a semi-monthly basis, with pay dates occurring on the 15 th and last day of each month. Approximately 78% of District employees' payroll are on direct deposit, and receive a deposit advice in lieu ofa paycheck. Business Systems Review. IBM Business Consulting Services recently completed the Payroll Business Systems Review as part of a larger effort to evaluate the District's financial and human resource operations, analyze payroll processes, and assess their efficiency, controls, and conformance with best practices. The review identified several payroll process weaknesses and made specific recommendations to strengthen systems. Staff has reviewed the recommendations and is in the process of addressing noted deficiencies as part ofthe District's ERP process. In an effort not to duplicate the findings and recommendations identified in the Payroll Business System Review, the scope of this audit focused on the adequacy of current internal controls on payroll processes and the integrity of payroll and related personnel data. CONCLUSIONS The audit produced the following major conclusions: 1. Controls Over Processing and Reporting Payroll Transactions were Adequate. To determine the adequacy of internal controls over payroll processes, we examined a variety of payroll transactions involving new hires, terminations, pay rate adjustments, degree supplements, and payroll deductions. New Hires. During 2004 the District hired 1,460 new employees. We selected a sample of40 new hires to determine (1) ifpositions were properly authorized; (2) ifthe pay rate was approved and in agreement with established salary schedules; and (3) if the payroll data was accurately maintained in CHIPS. (See Exhibit 1.) Exhibit 1 Was I Was Pay Was Payroll New Hire Position Was Pay Rate in Data Sample Date Job Properly Rate Agreement Accurately Number Hired Code Authorized? i Approved? With Salary Reflected Schedule? in CHIPS? 1 08/04/ / /30/ /25/ /05/ /04/ /12/ /04/ / /04/ ti=l 3 ~

9 Was Was Pay Was Payroll I New Hire Position Was Pay Rate in Data Sample Date Job Properly Rate Agreement Accurately I Number Hired Code Authorized? Approved? With Salary Reflected Schedule? in CHIPS? 11 08/04/ /28/ /05/ I 14 08/04/ /04/ /05/ /04/ /04/ /04/ /12/ / /20/ / /22/ /15/ /20/ / /14/ /04/ /04/ /04/ / /01/ /04/ /05/ /25/ /24/ /05/ /05/ /01/ Results. We found that all 40 new hire positions were properly authorized at appropriate salary levels; and payroll data was accurately maintained in CHIPS. Employment Terminations. During 2004, 180 employees terminated employment with the District. We sampled 40 ofthese employees to determine if they were appropriately deleted from subsequent payrolls. We also reviewed the final payments made to these employees to determine ifpayments were accurately calculated. (See Exhibit 2.) 4

10 Exhibit 2 Were Any Was Final Subsequent Employee Date Payment Payments Sample Terminated Job Calculated Made to Number Employment Code Accurately? Employee? 1 11/12/ No No (a) ~ /04 No 5 09/15/04 No No 5050 No 8 7/ No 9 08/31/ No 10 12/23/ No 11 12/23/ No 12 12/09/ No / No 14 06/02/ /27/ No 16 11/17/ No 17 12/23/ (a) 18 12/22/ No 19 10/15/ (a) 20 12/10/ No 21 06/02/ No 22 10/26/ No 23 10/14/ No 24 12/23/ No 25 09/24/ No 26 12/14/ No 27 06/01/ No 28 10/04/ (a) 29 11/09/ No No ~ 5310 No 5315 No 33 4 No 34 08/19/ No 35 08/20/ No 36 01/15/ No 37 11/08/ No No 39 12/01/ No 40 10/15/ No.. (a) - Employee was subsequently rehired. Payment related to new posltion. Results. We found that all the 40 selected employees were appropriately deleted from subsequent payrolls; and that their final payments were accurately calculated. 5

11 Pay Rate Adjustments. During 2004, 611 employees received pay rate adjustments. We sampled 20 of them to determine if their pay rate adjustment was properly approved and accurately reflected in subsequent payrolls. (See Exhibit 3.) Exhibit 3 Employee # Effective Date From Job Code To Job Code From Salary To Salary Was Rate Change Approved? Was Rate Change Accurately Processed? 1 08/04/ $8,381 $17, /01/ $7,355 $18, /31/ t# $9,000 $ $9,474 $21, /15/ $6,202 $17, /03/ $11,474 $24, / $16,518 $29, /29/ $15,031 $27, /30/ $30,375 $32, /20/ $10,276 $32, /17/ $66,154 $80, / $23,872 $61, /18/ $35,799 $53, / $15,133 $36, /09/ $26,838 $37, /16/ $14,397 $21, /04/ $8,381 $15, /01/ $21,064 $29, /01/ $12,671 $21, /03/ $11,474 $24,709 Results. We found the pay rate adjustments for all the 20 selected employees were properly approved and accurately processed. Voluntary and Mandatorv Payroll Deductions. To determine if payroll deductions were being made correctly, we reviewed the voluntary and mandatory deductions of 20 selected employees. (See Exhibit 4.) Exhibit 4 Employee Sample Number PAYROLL DEDUCTIONS Were Voluntary Deductions Were Mandatory Deductions Accurately Calculated? Amount of of Biweekly DEGREE SUPPLEMENTS Was Supplement Amount Correct? Were Degree Credentials Verified b Staff? $ $ $ $ $

12 PAYROLL DEDUCTIONS DEGREE SUPPLEMENTS Were Were Were Voluntary Mandatory Was Degree Employee Deductions Deductions Amount of Supplement Credentials Sample Processed Accurately of Biweekly Amount Verified Number Accuratel? Calculated? Su lement Correct? b Staff? 8 $ $ $ $ $ $ $ $ $ $ $ Unknown No 19 $ $ Voluntary deductions include medical, dental, vision, short and long term disability, cancer and critical illness insurances, health care and dependent flexible spending accounts, and tax sheltered accounts. Mandatory deductions include Social Security Tax, Medicare Tax, and Federal Withholding Tax. We reviewed each employee's elected voluntary deductions as indicated on their Benefits Enrollment Form and Salary Reduction Agreement, and compared those amounts with the deductions on their paychecks. We also computed each employee's mandatory deductions to determine if the amounts deducted from paychecks were accurate. Results. We found that the voluntary and mandatory deductions for all the 20 selected employees were processed accurately. Accounting Services' Response: We concur with all o/the above conclusions. (Please see page 13.) Degree Supplements. During 2004, 406 employees received a total of $606,850 in degree supplements. We sampled 20 of these employees to determine if their supplement amounts were appropriately paid based on job educational requirements and the level of degree earned. We also determined if Personnel staff verified the degree credentials of each employee (see "Degree Supplements" section of Exhibit 4.) Results. For 19 or 95% of the 20 sampled employees, we found the amount of the supplement was appropriate based on the type of degree, and that staff had verified the degree credentials of the employees. For one sampled employee, copy of the college transcript or diploma could not be provided to us; thus we could not determine if the supplement amount was appropriate. We consider this to be an isolated instance, but management should take immediate action to ensure the supplement pay for this employee is appropriate. 7

13 Compensation and Employee Information Services Response: With respect to the one sampled employee whose transcripts were not found in his personnel file, the employee has been contacted and has indicated he will request the transcripts be forwarded directly from his university to the Department of Compensation. (Please see pages 14 and 15.) 2. Controls over Check Storage, Printing, Transfer, and Distribution Appeared Adequate. During the audit we noted that: All checks/advices are pre-numbered. All blank check fonns are stored in a locked room with the Centralized Infonnation Processing Data Center, and a badge and key are required to access the room. A Check Accountability Form is utilized to account for all checks/advices before and after the printing process. A Warrant and Control Number Log is maintained to provide a record of the transfer of all printed and voided checks from the Infonnation Technology Department to the Payroll Department. A Check Transfer Form is utilized to document the custody transfer checks/advices from the Payroll Department to "PONY" for inter-district delivery to departments. Results. Controls were adequate in storage, printing, transfer, and distribution of checks and direct deposit advices. Accounting Services' Response: We concur. (Please see page 13.) 3. Payroll Checks Issued to Legitimate District Employees. To detennine if payroll checks are only issued to bona-fide District employees, we perfonned the following two tests: Pay Checks Distribution. We personally delivered a total of 719 payroll checks/advices to selected employees of the Maintenance and Plant Operations Department, the Transportation Department, and Boynton Beach High School. On payroll distribution days from December 15, 2004 through January 31, 2005, we met employees at their work locations and hand delivered their pay checks or deposit advices. We inspected each employee's District issued identification badge, or Florida driver's license, to ensure the name matched the name on the check/advice. For employee's who were on leave at the time, we reviewed the approved leave documentation. For employees who were not available at the time, we requested their supervisor to require them to sign an 8

14 "Unclaimed Check/Direct Deposit" form. The employee's supervisor was also required to sign the form, witnessing the employee's signature. Signatures were then compared to the signatures on file within the Compensation and Employee Information Services Department. Our distribution of 719 checks/advices indicated that all these persons are legitimate District employees. Mailed Checks. Payroll checks/advices for approximately 1,600 employees are mailed to them via the United States Postal Service. Since these employees were not included in our sample for pay checks distribution, we reviewed 50 of them to determine if they were bona-fide District employees. CHIPS inquiries revealed that all 50 employees were on record as having an "active" job within the District. We also contacted the work locations of these employees and confirmed their presence. We concluded that all these 50 persons were legitimate District employees. Accounting Services' Response: We concur. (Please see page 13.) 4. Overtime for Some Employees Could not be Reconciled to Supporting Documentation. To determine if overtime hours were properly approved and if related payments were accurately calculated, we analyzed the overtime records for a total of 50 employees within the Transportation Department and the Maintenance and Plant Operations Department. We found the mathematical calculations for overtime payments for all 50 employees to be accurate. We found that reported overtime was properly approved, and reconciled to supporting documentation for all the employees selected within the Transportation Department's south compound, and within the Maintenance and Plant Operations Department. However, for 9 or 53% of 17 employees selected within the Transportation Department's central compound, documentation for overtime hours was not available (see Exhibit 5.) Thus, we could not validate the accuracy of overtime payments made to some employees ofthe central compound. Exhibit 5 Employee Number Overtime Hours Pay Period Ending Did Overtime Hours Agree to Time Record? Was Overtime Approved? Was Overtime Accurately Calculated? ITransportation (Central) /15/2004 No (a) /15/2004 No (b) No /15/ No 6 ;:.50 I 4/15/ /15/2004 No 9

15 /15/2004 I /15/ /15/2004 No (a) Y es ~ /15/ /15/ / No / No (a) (b) /15/2004 No (a) ~~ /15/2004 (b) (a) - Some of the daily overtime documents did not specify the time clocked in or out. (b) - Some of the daily overtime documents were not approved by the supervisor. Transportation (South) /31/ / ~ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/2004 Maintenance and Plant Operations / /31/ /31/ / /31/ /31/ /31/ /31/ /31/ / /31/ /31/ /31/ /31/ / Additionally, for 5 or 29% of the 17 employee overtime records reviewed within the central compound, some documents did not clearly indicate the time "clocked in" or 10

16 "clocked out". For 3 or 18% of the 17 employee overtime records reviewed, the daily overtime requests were not approved by a Transportation Coordinator as required. School Board Policy 6.12 requires that supervisors maintain documentation of advance written approval to work overtime, as well as documentation of work time in excess of 40 hours. We found the filing system for overtime documentation at the central compound to be inefficient and ineffective. This may explain why some of the documents could not be located and provided to us. However, the lack of documentation becomes critical when there were high overtime hours. For the pay period ending April 15, 2005, 11 employees of the Central Compound recorded more than 50 overtime hours, with one employee recording overtime hours (an average ofmore than 8 overtime hours per day). Currently, anyone of three Coordinators at the Central Compound has the authority to approve overtime requests. Thus, overtime can be approved without the knowledge of the Senior Coordinator. The Senior Coordinator should be required to approve all overtime requests. Additionally, the filing system for overtime documents should be improved to ensure all work hours are properly accounted for and documented. Transportation Department's Response: The filing system has been changed so that the overtime documents will be attached to the time card and filed alphabetically by employee's last name for each payroll period. This information will be stored by payroll dates and each container will be marked to identify the contents. The transportation coordinator who authorizes the overtime is responsible for signing the document. The authorizing coordinator will be responsible for ensuring the overtime documents are completed properly. (Please see page 16.) 5. Premium Overtime Pay Inconsistent With School Board Policy. Our review of overtime records of bus drivers revealed several drivers were also employed as part time employees for School Age Child Care (SACC). This part time employment resulted in the payment of premium wages above the regular rate. School Board Policy 3.95 states "An employee shall not hold more than one job with the School Board unless dual employment is so approved by the School Board. No recommendation for such dual employment under any circumstances should be made by a principal or department head that could result in a requirement for the payment of premium wages.", unless lack of such recommendation would be adverse to the best interests of the School Board. In the event that such a recommendation is made, the recommendation should point out the possible requirement for the payment ofpremium wages and should state that the appointment is in the best interests ofthe School Board." Audit of Overtime Payroll issued on September 17, 2002, indicated that School Age Child Care was paying premium wages to employees who held more than one job. At that time, the Personnel Services Department indicated that a justification section would be added to the Personnel Recommendation form (PBSD 0744), so Principals can 11

17 explain their reason for hiring a full time permanent employee in a temporary position. Although the Personnel Action Recommendation form has been revised to require the authorization of the Community School Assistant Principal, a justification section has not been added to the form, and some SACC employees continue to receive premium wages without the required justification. Compensation and Employee Information Services' Response: Following the audit of 2002 concerning the inconsistency ofpremium overtime pay with School Board Policy 3.95, it was recommended that a justification section be added to the Personnel Recommendation Form. At that time, several events transpired that changed the direction ofthe initial response. Thejustification was intended to be added in Phase II when adding temporary/part time employees to the process. Late in the spring, it was decided to table the on-line recommendation process for temporary employees as the District was considering the purchase of a new payroll/personnel system. Since that time, we have purchased Peoplesoft and have been writing rules and adjusting business practices in order to move forward with this system. Given the series of events concerning the District's paradigm shift of changing the processing of command and control to that of an information-based environment coupled with best business practices, no forther action was taken; and as a result, the issue was inadvertently dropped. However, subsequent to our draft response, we have been able to change the current Recommendation Form by manipulating the data fields to provide a small justification line. (Please see pages 14 and 15.) - End of Report 12

18 Appendix A Management Response Accounting Services Department THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA ACCOUNTING SERVICES 3366 Forest Hill Boulevard, A-323 West Palm Beach, Florida ARTHUR C. JOHNSON, Ph.D Supelintendent (561) FAX: (561) To: From: Re: Lung Chui, District Auditor Martin Arroyo, Director of Accounting Services Draft Audit Report for Payroll and Personnel Date: July 25, 2005 In response to your memo dated June 16, 2005, we have reviewed the Draft Audit Report for Payroll and Personnel and concur with Conclusions #1, #2 and #3. DISTRfCT AUDfTOR PALM BEACH COUNTY SCHOOLS #3 IN THE NATION! VISIT PALMBEACHSCHOOLS.ORG for DETAILS AN EQUAL OPPORTUNITY EMPLOYER 13

19 Appendix A Management Response Compensation and Employee Information Services Department The School District James Hayes, Jr. Arthur C. Johnson, Ph.D. Of Palm Beach County, Florida Chief Officer of Human Resources Superintendent Melinda Wong, Director Compensation and Employee Information Services 3300 Forest Hill Blvd., Suite A-152 West Palm Beach, FL (561) FAX: (561) MEMORANDUM TO: FROM: IDJE luw~~ ~ JUl m Mr. Lung Chiu District Auditor. / DISTRICT AUDITOR Melinda Wong F Director of Compensation SUBJECT: Written Responses to Draft Audit Report ofpayroll and Personnel DATE: July 11,2005 Per your request, the following written responses to the Audit Report ofpayroll and Personnel are submitted for your review. Finding # I - Degree Supplements Management Response: With respect to the one sampled employee whose transcripts were not found in his personnel file, the employee has been contacted and has indicated he will request the transcripts be forwarded directly from his university to the Department of Compensation. Finding # 2 - Premium Overtime Inconsistent with School Board Policy Management Response: Following the audit of 2002 concerning the inconsistency ofpremium overtime pay with School Board Policy 3.95, it was recommended that ajustification section be added to the Personnel Recommendation Form. At that time, several events transpired that changed the direction of the initial response. Our department was in the process ofconsolidating multiple recommendation forms in an effort to streamline the process. In so doing, it was impossible to provide adequate space on the form for any type oflengthy explanation. The audit addressed the Part-Time Form which was replaced by the new consolidated Recommendation Form. More importantly, we were two (2) months from moving into production in CHIPS with the on-line recommendation process, therefore making the forms obsolete. When we started Phase I (the on-line processing of instructional and administrative personnel), we fully expected to include all temporary positions on-line in the spring of However, in an effort to comply on a temporary basis, it was felt that Principals and Department Heads, who are fully aware of School Board Policies, would show justification (short-term) by signature/approval based on the needs ofthe school or department. In looking at the Personnel Recommendation Form, it did not account for one AN EQUAL OPPORTUNITY EMPLOYER.1 14

20 Appendix A Management Response Compensation and Employee Information Services Department Mr. Lung Chiu July 11,2005 Page 2 specific group of administrators - those serving as community school assistant principals. Consequently, this was added as a stop gap measure until the on~line process was fully completed. The justification was intended to be added in Phase II when adding temporary/parttime employees to the process. Late in the spring, it was decided to table the on-line recommendation process for temporary employees as the District was considering the purchase ofa new payroll/personnel system. Since that time, we have purchased Peoplesoft and have been writing rules and adjusting business practices in order to move forward with this system. Given the series ofevents concerning the District's paradigm shift ofchanging the processing of command and control to that ofan information-based environment coupled with best business practices, no further action was taken; and as a result, the issue was inadvertently dropped. However, subsequent to our draft response, we have been able to change the current Recommendation Form by manipulating the data fields to provide a small justification line. Should you need clarification on any ofthe above, please do not hesitate to contact me at. PX MW:pk C: Robert Bliss. James Hayes, Jr. 15

21 Appendix A Management Response Transportation Department THE SCHOOL DISTRICT OF PALM BEACH COUNTY, florida TRANSPORTATION DEPARTMENT 2775 HOMEWOOD ROAD WEST PALM BEACH, FL ARTHUR C. JOHNSON, Ph.D. SUPERINTENDENT (561) FAX: (561) Memorandum To: From: Date: July 12, 2005 Robert Bliss, Senior Auditor Audit Department v( Yevola B. Falana, Assistant Director/Operations Transportation Department DISTRICT AUDITOR Subject: Audit of Payroll and Personnel The/ollowing is management's response to the payroll audit: 4. Overtime for Employees Could Not Be Reconciled to Supporting Documentation. Management Response: The overtime documents were not filed with the time cards by the payroll period when the time was incurred. The documents were filed by the day the time was inputted; therefore, the overtime documentation could not be matched with the time card. The filing system has been changed so that the overtime documents will be attached to the time card and filed alphabetically by employee's last name for each payroll period. This information will be stored by payroll dates and each container will be marked to identify the contents. The transportation coordinator who authorizes the overtime is responsible for signing the document The authorizing coordinator will be responsible for ensuring the overtime documents are completed properly. Because of the amount of overtime documents and the various times the overtime is incurred, it is not possible for the senior coordinator to verify and sign each document. However, the senior coordinator is responsible for reviewing the overtime information that is provided monthly for any discrepancies. YBFI cc: Bob Riley ~J luwa:~ ~ JUL ~ DISTRICT AUDITOR AN EQUAL OPPORTUNITY EMPLOYER 16