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

AUDIT REPORT IN BRIEF

This audit of the Conflicts of Interest Board (COIB) determined whether the COIB maintains adequate internal controls over its personnel, payroll, timekeeping, small purchases, and physical assets, in compliance with applicable City rules and regulations.

Our audit determined that the COIB maintains adequate internal controls over its timekeeping, payroll, and small purchases. These controls are applied and adhered to on a consistent basis. With the exception of its physical assets inventory, we determined that in all material aspects, the COIB complied with the requirements outlined in Comptroller’s Directives #1, #3, #6, #13, and #24, as well as with the PPB rule governing small purchases (Chapter 3, §3-08) and New York City leave regulations for managerial and non-managerial employees.

We determined that the COIB paid employees for the proper number of hours worked, and maintained properly executed and authorized leave forms and correctly processed leave transactions on employee PMS records. In addition, we determined that purchases were properly accounted for, and legitimate and necessary for COIB operations, and purchases made using the imprest fund were appropriately documented. Furthermore, the imprest fund checking account was properly reconciled on a monthly basis and all transactions were appropriately handled.

While we determined that for the most part the COIB’s physical assets were satisfactorily safeguarded from theft, we determined that the COIB did not maintain a complete and accurate inventory of its physical assets. After advising COIB officials of our findings, they took appropriate actions to correct this weakness. Also, we found that the annual salaries for two management employees slightly exceeded the allowed maximum level, as established by the City’s Pay Plan Schedule For Management Employees (PPME). These findings are discussed in greater detail in the body of this report.

To address these issues, the audit made the three recommendations. The COIB should:

• Ensure that all changes to equipment (additions, deletions, relocation, etc.) are reflected in the agency’s central equipment inventory record as they occur.
• Make the necessary payroll adjustments to ensure that employees are paid within established salary ranges.
• Ensure in the future that all salary changes remain within allowed limits.

The matters covered in this report were discussed with COIB officials during and at the conclusion of this audit. A preliminary draft report was sent to COIB officials and discussed at an exit conference held on May 5, 2004. On May 13, 2004, we submitted a draft report to COIB officials with a request for comments. We received a written response from COIB officials on May 21, 2004. In their response, COIB officials agreed with the audit’s findings and recommendations, stating:

"The Conflicts of Interest Board (‘COIB’) agrees with the findings of the draft report and will comply with its recommendations . . . We thank you for the professional and courteous conduct of your staff during the course of this audit. As a small, non-mayoral agency we look to these audits as a means of ensuring that the COIB is conducting its business in accordance with Comptroller’s Office regulations and procedures."