In this sample audit, internal audit performed a review of the payroll and human resources functions, focusing on Key Executive Retention Program (KERP) employees to be in accordance with the fiscal year risk assessment and audit plan. The objectives of this review are to obtain an understanding of the payroll and human resource processes for KERP employees, evaluate internal controls, and ensure that they are adequate and operating effectively.
The following key observations were noted during the review:
- Policies and procedures for payroll and HR are either not current or are not available.
- Personnel files for KERP employees are not always complete.
- Select personnel files selected for sample testing could not be located.
- Upon termination of an employee, proper procedures are not always followed to ensure that complete documentation is obtained.
- Manual check request forms are not consistently utilized and appropriate documentation is not always attached for payment requests.