YES | NO | N/A | Notes Reference | |
PART A: This section to be completed by all applicable agencies. | ||||
EMPLOYEE COMPENSATION (Payroll & Personnel) Statutory References - CGS Sections 3-119, 5-257a, 5-257 and 5-259, 5-250-1, 2-254, 5-247(a), 5-253 Federal Public Law 99-272, Public Law 1012-508 | ||||
Segregation of Duties | ||||
1. Are the responsibilities for the supervision and time-keeping functions segregated from those for personnel, payroll processing, check distribution, and general ledger functions? | ______ | ______ | ______ | ______ |
2. a. Are the responsibilities for preparing the payroll separate from other payroll duties (e.g., time keeping, distribution of checks)? | ______ | ______ | ______ | ______ |
b. Do individuals preparing payroll have no access to other payroll records or cash? | ______ | ______ | ______ | ______ |
3. Are the responsibilities for the payroll processing function segregated from those for the general ledger function? | ______ | ______ | ______ | ______ |
4. Are the responsibilities for initiating payments under employee benefit plans separate from those for accounting and general ledger functions? | ______ | ______ | ______ | ______ |
5. Are requests for new personnel originated only by department heads or other responsible officials? | ______ | ______ | ______ | ______ |
Personnel Procedures | ||||
6. Does the Personnel Office screen potential new employees and require an employment application? (Screening should include checking employee's background, former employers, and references.) | ______ | ______ | ______ | ______ |
7. Do written personnel policies exist? | ______ | ______ | ______ | ______ |
8. Are payroll and personnel policies governing compensation in accordance with the State requirements or grant agreements? | ______ | ______ | ______ | ______ |
9. Are all changes in employment (additions and terminations), salary and wage rates, and payroll deductions properly authorized, approved and documented? | ______ | ______ | ______ | ______ |
10.a. Are personnel files maintained? | ______ | ______ | ______ | ______ |
b. Do these files contain at least information on: employment application and new employee screenings, date employed, pay rates, changes in pay rates and position, authorizations for payroll deductions, earnings records, W-4 form, specimen signatures, and termination data where appropriate? | ______ | ______ | ______ | ______ |
c. Are written termination notices required properly document reasons for termination and do these notices require the approval of an appropriate agency official? | ______ | ______ | ______ | ______ |
d. Do physical controls exist over personnel records to prevent their loss or use by unauthorized personnel? | ______ | ______ | ______ | ______ |
11. Are notices of additions, separations, changes in salaries, wages, and deductions promptly reported to the payroll processing function? | ______ | ______ | ______ | ______ |
12. Do procedures exist for authorizing, approving, and recording vacations, holidays, and sick leave and for approving and controlling compensatory time? | ______ | ______ | ______ | ______ |
13. Are terminated employees interviewed as a check on departure and as a final review of any termination settlement by the personnel department? | ______ | ______ | ______ | ______ |
Supervision/Timekeeping | ||||
14.For payroll preparation and time keeping: | ||||
a. Time keeping and attendance sheets: | ||||
1) Are formal attendance records used? | ______ | ______ | ______ | ______ |
2) Is approval of department head or supervisor required on time sheets or other attendance record prior to preparing payroll? | ______ | ______ | ______ | ______ |
3) Are changes on time sheets initiated/approved by a department head or supervisor? | ______ | ______ | ______ | ______ |
15. Is the time clock placed in a position where it can be observed by a supervisor.? | ______ | ______ | ______ | ______ |
16. Are time cards, if used, only punched by the employees to whom they are issued? | ______ | ______ | ______ | ______ |
17. Are controls established to ensure that payroll costs charged to grants are done properly and in compliance with these grant agreements? | ______ | ______ | ______ | ______ |
Payroll Processing | ||||
18. For preparing the payroll: | ||||
a. Are time sheets/attendance records checked for computations of payroll period hours. | ______ | ______ | ______ | ______ |
b. Are time sheets reviewed for specified overtime approval as well as approvals of department heads, etc.? | ______ | ______ | ______ | ______ |
c. Are overtime hours, rates, and computations checked for accuracy? | ______ | ______ | ______ | ______ |
d. Are time sheets reviewed for unapproved erasures and alterations? | ______ | ______ | ______ | ______ |
e. Are pay rates verified? | ______ | ______ | ______ | ______ |
19. Are documents supporting employee benefit payments (such as accumulated vacation or sick leave) reviewed before disbursements are made? | ______ | ______ | ______ | ______ |
20. Are gross pay amounts of current period compared to prior period payrolls and reviewed for reasonableness by a knowledgeable person not otherwise involved in payroll processing? | ______ | ______ | ______ | ______ |
21. Is the payroll review (i.e., the examination of authorizations for changes noted on the reconciliations) performed by an employee not involved in its preparation? | ______ | ______ | ______ | ______ |
22. Are the distribution of dollars and hours or gross pay balanced with payroll registers and reviewed by someone independent but knowledgeable of this area.? | ______ | ______ | ______ | ______ |
23. Is there a comparison of payrolls to appropriated and budgeted amounts? | ______ | ______ | ______ | ______ |
24 .Are payroll advances to employees prohibited or subject to appropriate review? | ______ | ______ | ______ | ______ |
25. Are appropriate payroll records maintained for accumulated employee benefits (e.g., vacation, sick leave, pension information, etc.)? | ______ | ______ | ______ | ______ |
26. Does an adequate system exist for distributing payroll to the proper appropriation accounts? | ______ | ______ | ______ | ______ |
27. For unclaimed pay checks: | ||||
a. Are checks returned to an employee who is not associated with the payroll function? | ______ | ______ | ______ | ______ |
b. Are checks released only after presentation of proper identification by employee and with preparation of a signed receipt? | ______ | ______ | ______ | ______ |
EMPLOYEE COMPENSATION PART B: This section is to be completed by agencies that process their own payroll (e.g., for students, patients or inmates, etc.) and by the Office of the State Comptroller Central Payroll Division. | ||||
Segregation of Duties | ||||
1. Is supervision of payroll distribution done by employees: | ||||
a. Who are not responsible for hiring or firing employees? | ______ | ______ | ______ | ______ |
b. Who do not approve time reports? | ______ | ______ | ______ | ______ |
c. Who take no part in preparing payroll, checks, or envelopes? | ______ | ______ | ______ | ______ |
2. Is the reconciliation of the payroll bank account done by employees who are independent of all other payroll transaction processing activities? | ______ | ______ | ______ | ______ |
3. If EDP is used, is the principle of segregation of duties in processing activities maintained? | ______ | ______ | ______ | ______ |
Procedural Controls | ||||
4.Are wages monitored to determine they are at or above the federal minimum wage? | ______ | ______ | ______ | ______ |
Payroll Processing | ||||
5.. Are changes to the EDP master payroll file approved and documented? | ______ | ______ | ______ | ______ |
6. Is access to the EDP master payroll file limited to employees who are authorized to make changes? | ______ | ______ | ______ | ______ |
7. Are completed payroll registers reviewed and approved before disbursements are made by someone independent of payroll preparation and time keeping? | ______ | ______ | ______ | ______ |
8. Are payroll checks drawn on a separate account operated on an imprest system? | ______ | ______ | ______ | ______ |
9. If checks are machine-signed, is there adequate control over the use of the signature plate, and are procedures the same as for accounts payable checks? | ______ | ______ | ______ | ______ |
10. Are payroll checks: | ||||
a. Prenumbered, blank stock controlled, used in numerical sequence? | ______ | ______ | ______ | ______ |
b. Accounted for in numerical sequence and reconciled to payroll check register? | ______ | ______ | ______ | ______ |
11.. Are all voided/spoiled checks properly mutilated and retained? | ______ | ______ | ______ | ______ |
12. Do checks contain detail of gross pay and deductions? | ______ | ______ | ______ | ______ |
13. For unclaimed pay checks: Is a continuing record maintained of all unclaimed wages? | ______ | ______ | ______ | ______ |
14. Monthly, quarterly, or annually, is there a reconciliation of gross and net pay amounts as shown on tax returns to total payroll on the payroll register and general ledger? | ______ | ______ | ______ | ______ |
DO NOT WRITE IN THIS BOX --AUDITORS USE ONLY
Preliminary opinion on the above Internal Control matters: Employee Compensation - Payroll and Personnel Good Fair Poor |