Audit Report on the Controls over Personnel, Payroll, and Timekeeping Practices at the Department of Investigation

AUDIT REPORT IN BRIEF

Our audit determined whether the Department of Investigation (DOI) has adequate controls over its personnel, payroll, and timekeeping practices and whether its controls are in accordance with applicable City rules, Comptroller’s Directives, and its own formal procedures.

DOI acts as an independent and nonpartisan watchdog for New York City (City) government, City-funded programs, and City contracts with private or community organizations. The major functions of DOI include investigating and referring for prosecution cases of fraud and unethical conduct by City employees, contractors who do business with the City, and others who receive City money either directly or indirectly.

Candidates seeking employment at DOI must fill out various documents, such as a Comprehensive Personnel Document and a Background Investigation Questionnaire, which are necessary for DOI to review each candidate’s credentials and to conduct an extensive background review. All employees of DOI are responsible for completing weekly time sheets that are reviewed by their supervisors. DOI’s timekeepers are then responsible for reviewing the time sheets for accuracy and for recording use of leave, accrual and use of compensatory time (comp time), and accrual of paid overtime. A total of 304 employees worked for DOI at some time during Ju1y 2007, through October 24, 2008. In addition, some City agencies provided DOI a total of 89 of their own employees to help DOI with its investigations. DOI’s personal service expenditures totaled $17.4 million for Fiscal Year 2008.

Audit Findings and Conclusions

DOI’s controls over its personnel, payroll, and timekeeping practices were generally in accordance with applicable City rules, Comptroller’s Directives, and its own formal procedures. Nevertheless, we identified certain minor areas where improvement is warranted.

We found that employees who were required to be City residents all lived within the five boroughs, that employees were paid within the salary ranges of their associated titles set by the Department of Citywide Administrative Services (DCAS), that salary increases were authorized and adequately justified, that proposed lump sum payments made to employees who separated from DOI were approved by the Comptroller’s Office prior to issuing the actual payments, and that managerial employees did not accrue comp time to which they were not entitled.

The following are some of the areas we identified where we believe DOI could improve its controls: maintenance of personnel documents, security of timekeeping files, segregation of duties between the payroll and timekeeping functions, and monitoring of annual leave and comp time balances and paid overtime.

Audit Recommendations

Based on our findings, we make nine recommendations, including that DOI:

• Strengthens the controls over its record-keeping practices. All records pertaining to the personnel and timekeeping processes should be securely maintained in an organized manner.

• Continues its communication with DCAS to ensure adherence to the title specifications set by DCAS for all employees appointed to positions in competitive and non-competitive class titles. If DOI believes that any DCAS specifications need to be modified, it should file an appeal.

• Ensures that approved waivers are granted for any employees whose annual leave balance exceeds the maximum limit and for any employees in competitive and non-competitive class titles whose non-Fair Labor Standards Act (FLSA) comp time has not been used within 120 days of its being earned. Any excess annual leave or non-FLSA comp time balances for which approved waivers are not obtained should be converted to sick leave in accordance with City regulations.

• Ensures that its Employee Manual is updated to include regulations for both managerial and non-managerial employees, including but not limited to, DCAS’s “Leave Regulations for Management Employees,” “Leave Regulations for Employees who are Under the Career and Salary Plan,” and “Regulations Governing Compensatory Time Off, Compensation for Overtime, and Meal Allowances for City Employees.”

DOI Response

In their response, DOI officials generally agreed with the audit’s recommendations.