Audit Report on the Controls Over Personnel, Payroll, and Timekeeping at Coney Island Hospital

AUDIT REPORT IN BRIEF

The New York City Health and Hospitals Corporation (HHC) provides City residents with comprehensive medical and mental health services as well as treatment for substance abuse. Coney Island Hospital is part of the HHC Southern Brooklyn and Staten Island Health Network and has both medical and non-medical employees who are required to follow HHC Operating Procedures and the time and leave regulations. The primary objectives of this audit were to review the internal controls of Coney Island Hospital over personnel, payroll, and timekeeping for its active, non-medical, full-time, administrative staff, and to determine whether it is in compliance with HHC policies and procedures and other applicable regulations.

The audit found that Request for Leave forms were present and approved for all annual and sick leave taken by the 40 employees in our sample. All leave use was appropriately deducted from the employees’ leave balances, and the employees were accruing the correct amount of annual and sick leave specified in the leave regulations. Payroll taxes were calculated accurately and deductions were correctly applied. In addition, personnel folders were in good condition, clearly labeled, and filed in alphabetical order.

However, some of the personnel folders were incomplete or contained inaccurate information. In addition, there were weaknesses in the controls over timesheets and paycheck distribution, and some employees were being paid above the maximum salary for their title. The audit also found that timekeeping documents were incomplete.

The report makes nine recommendations, some of which are listed below. Coney Island Hospital should:

• Conduct periodic reviews of personnel folders to ensure that all documents required by HHC and Coney Island Hospital are present in the appropriate personnel folders.
• Ensure that records for updated annual physicals; mandated in-service training; and performance evaluations are completed and included in the personnel folders.
• Ensure that written justification is submitted when requests for merit increases are made.
• Require that, in addition to the timekeepers signing for the payroll checks, each employee should sign for his or her own paycheck.
• Ensure that undistributed checks are returned to the Payroll Department at the end of the payday.
• Ensure that employees fill in their timesheets daily.
• Ensure that all timesheets are signed and authorized.

The matters covered in this report were discussed with officials from Coney Island Hospital during and at the conclusion of this audit. A preliminary draft report was sent to HHC officials on May 21, 2003 and was discussed at an exit conference on June 9, 2003. We submitted a draft report to HHC officials on June 12, 2003 with a request for comments. We received a written response from HHC officials, which included comments from Coney Island Hospital officials, on June 25, 2003. In its response, HHC officials agreed to implement six of the nine recommendations stating: "the auditors have provided some useful recommendations and the Facility has taken steps to implement additional controls that will improve the Facility’s operation."