Final Letter Report on the Office of Payroll Administration’s Controls Over Its Computer and Other Computer-Related Equipment

Introduction

This audit determined whether the New York City Office of Payroll Administration (OPA) is complying with certain inventory procedures as set forth in the Department of Investigation’s (DOI) Standards for Inventory Control and Management and is maintaining effective internal controls over office equipment as required by New York City Comptroller’s Directive #1.

OPA processes payroll and employee benefit services for more than 300,000 workers at over eighty New York City government agencies.  The office is responsible for the continued development and enhancement of the Payroll Management System and related sub-systems, distributing employee pay, maintaining payroll bank accounts, coordinating payroll-related matters between different City agencies as well as external organizations (including health insurance companies and the Internal Revenue Service), developing and disseminating uniform payroll procedures, and maintaining the integrity and accuracy of the City’s payroll.

For Fiscal Year 2016, OPA’s Other Than Personal Services (OTPS) budget was approximately $1.8 million, of which $330,000 was allocated to the purchase of data processing equipment.[1]  For Fiscal Year 2017, the office’s OTPS budget was approximately $1.8 million, of which $261,000 was allocated to the purchase of data processing equipment.

Results

The audit found that OPA has segregated the duties for purchasing, receiving, and maintaining the inventory of computer and computer-related equipment among different staff members in accordance with Comptroller’s Directive #1.  The audit also found that OPA maintained complete and accurate inventory records for 365 computers and computer-related equipment (including 219 items purchased from July 1, 2015 through April 17, 2017, at a cost of $108,821) as required by DOI’s Standards for Inventory Control and Management.  The 365 computers and computer-related equipment items were listed on the inventory list with the correct descriptions, serial numbers, model numbers, tag numbers, locations and were appropriately tagged with an asset tag numbers and as property of OPA. However, the audit found that OPA did not include 72 monitors on its inventory list with an estimated replacement value of $5,038.

Based on these findings, the audit made the following recommendation:

• OPA should ensure that the 72 monitors that were not included on OPA’s inventory list are added to it in accordance with the DOI Standards and Comptroller’s Directive #1.

In its response, the OPA stated that “(w)e considered ourselves in compliance with Citywide guidelines based on the following:

• As a technology agency, we look to the Citywide Policies and Guidelines published by DoITT as DOITT’s Citywide Policy for Asset Management states that tagging is not required for IT assets under $200 (section 6.3).
• Comptroller’s Directive 1 Section 3 states it is important for management to ensure that the design and implementation of agency internal controls is based on justifiable cost and benefit relationships.
• Section 26 of the DOI standard states that ‘Application of the requirements of the Standards depends upon available staff and physical resources and the nature, number and value of goods’ as well as ‘establishing property identification for items of significant ’

Financial Information Services Agency (FISA) – OPA would welcome a clarification of what is considered valuable.  There is a need to have a scope established so we can appropriately focus our resources and have a more accurate picture of what items the Comptroller’s Office deems necessary to track and include in our asset management system.”

[1] Data processing equipment includes computers, printers, monitors, laptops, scanners, fax machines, and tablets.