Canton schools implement stronger payroll controls after state audit, report says
Wednesday, November 04, 2009, 2:39pm
CANTON – The state comptroller’s office has completed its audit of Canton Central School and has recommended improving payroll procedures, which the district says it has done.
The audit found internal controls over the district’s payroll process were not adequate to protect the district’s assets because the treasurer performed virtually every phase of the payroll process. The auditors said they would prefer a higher level of oversight.
They said they found no impropriety.
“The district’s treasurer had user access rights in the district’s computerized payroll module which allowed her to enter new employees, activate and inactivate existing employees, and make changes in employees’ hourly and annual salary rates, including her own. She was also responsible for setting up employee payroll deductions and direct deposits, preparing and signing payroll checks, and maintaining payroll records. The treasurer processes the district’s payroll without any oversight,” the audit summary said.
Their audit examined financial oversight, cash receipts and disbursements, purchasing, payroll and personal services, and information technology, and found only payroll procedures wanting.
“Concentrating key duties (i.e., authorization, recordkeeping, and custody) with one individual with little or no oversight weakens internal controls and significantly increases the risk that errors and/or irregularities might occur and go undetected and/or uncorrected in a timely manner,” the report said.
“When it is not practical to segregate duties because of limited staff resources, District officials should establish compensating controls. Such compensating controls could include periodic review of payroll transactions by personnel independent of the payroll process (e.g., payroll change reports).”
The report also noted that since their audit, the district has implemented changes. The superintendent now reviews payroll “prior to certification” and the district business administrator now keeps a copy of payroll records changes and generates a report each pay period. There will also be unannounced payroll reviews, the district told auditors.
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