Audit Report on the Payroll, Timekeeping, and Purchasing Practices of the Board of Correction

AUDIT REPORT IN BRIEF

This audit of the Board of Correction (BOC) determined whether the BOC complied with applicable personnel, payroll, timekeeping, and small procurement policies and procedures established by the agency, and those set forth in Comptroller’s Internal Control and Accountability Directives, New York City leave regulations for managerial and non-managerial employees, and Procurement Policy Board Rules.

The Board of Correction generally adhered to many of the requirements outlined in Comptroller’s Directives #1, #3, #6, #13, and #24 as well as with many of the regulations of the New York City leave regulations for managerial and non-managerial employees. Furthermore, the audit determined that the BOC’s physical assets (e.g., computers and fax machines) are adequately safeguarded and accurately reflected in its physical assets inventory records.

However, we found that the BOC does not have adequate oversight controls over timekeeping and purchasing activities, which has resulted in related deficiencies. Regarding timekeeping practices, the BOC did not have completed leave request forms to support 264 (57%) of the 460 total (annual and sick) leave occurrences during the months of July through December 2002, and June 2003. For the same period, it also incorrectly classified and charged 103.5 (65%) of the 159.25 total sick leave hours used by five employee, as "medically documented" when the hours should have been classified as "undocumented" sick leave. Also, the BOC did not have medical documentation, as required, from two employees who had more than five undocumented sick leave occurrences during a six-month period. Furthermore, in Fiscal Year 2003, the BOC allowed one employee to charge 75.5 hours to sick leave for the illness or disability of the family member—61.5 hours in excess of the allowed annual 14-hour limit for this type of leave.

Regarding purchasing practices, this audit revealed that the BOC did not cancel all of the voucher packages prepared in Fiscal Year 2003 by stamping them "vouchered" or "paid," resulting in the $146.06 overpayment of an invoice. The audit also determined that the BOC processed employee expense reimbursement requests, although the forms were missing the required employee and supervisory signatures.

To address these issues, the audit made nine recommendations. Some of the major recommendations were that the BOC should:

• Implement oversight control procedures requiring that all timekeeping data and payment voucher packages be independently reviewed and verified by the Executive Director or other BOC staff member for correctness prior to the authorization to process the transactions.
• Ensure that all employees complete the appropriate leave authorization forms in accordance with Comptroller’s Directive #13, §4.5, and that these forms remain on file.
• Ensure that all sick leave time charges (i.e., medically documented or undocumented sick leave) are correctly classified and reflected in employee records.
• Require and ensure that employees submit medical documentation (a doctor’s note) when they use three or more consecutive days of sick leave or when they have more than five sick leave occurrences in a six-month period, in accordance with §3.0 b (2) of the New York City leave regulations for managerial and non-managerial employees.
• Require that all payment voucher packages, including all supporting documents (i.e., invoices, receiving slips, and purchase orders) are canceled and marked "vouchered," or "paid," to avoid duplicate payments. In addition, the payment voucher (or check) number, date of payment, and any other relevant information should be noted on the invoice or payment voucher.
• Ensure that all expense reimbursement request forms submitted by employees are appropriately signed by both the employee and a supervisor or other authorized BOC employee prior to authorizing the reimbursement.

The matters covered in this report were discussed with BOC officials during and at the conclusion of this audit. A preliminary draft report was sent to BOC officials and discussed at an exit conference held on February 24, 2004. On March 1, 2004, we submitted a draft report to BOC officials with a request for comments. We received a written response from BOC officials on March 18, 2004. However, in that response BOC officials failed to directly address the audit recommendations or to express whether they agreed or disagreed with the recommendations. Subsequently, on March 18, 2004, we contacted BOC officials and gave them the opportunity to revise their response to address the audit recommendations. We received BOC officials’ revised response on March 23, 2004. BOC officials agreed with all nine of the audit recommendations, but stated that Recommendation #1 could not be implemented due to a lack of staffing resources.