YES          NO          N/A

PART A: This section should be completed by all applicable agencies.

EMPLOYEE COMPENSATION (Payroll & Personnel)

Statutory References - CGS Sections 3-119, 5-257a, 5-257 and 5-259, 5-250-1, 2-254, 
                                     5-247(a), 5-253 Federal Public Law 99-272, Public Law 1012-508

Segregation of Duties

1.     Are the responsibilities for the supervision and timekeeping functions segregated from 
        those for personnel, payroll processing, check distribution, and general ledger functions?

2.     a) Are the responsibilities for preparing the payroll separate from other payroll duties 
            (e.g., timekeeping, distribution of checks)?

        b) Do individuals preparing payroll have no access to other payroll records or cash?

3.     Are the responsibilities for the payroll processing function segregated from those for the 
        general ledger function?

4.     Are the responsibilities for initiating payments under employee benefit plans separate 
        from those for accounting and general ledger functions?

5.     Are requests for new personnel originated only by department heads or other 
        responsible officials?

Personnel Procedures

6.     Does the Personnel Office screen potential new employees and require an 
        employment application? (Screening should include checking employee's 
        background, former employers, and references.)

7.     Are personnel rules and policy memos published and distributed to all employees? 

8.     Are payroll and personnel policies governing compensation in accordance with the State 
        requirements or grant agreements?

9.     Are all changes in employment (additions and terminations), salary and wage rates, and 
        payroll deductions properly authorized, approved and documented?

10.   a) Are personnel files maintained?

        b) Do these files contain at least information on: employment application and new 
            employee screenings, date employed, pay rates, changes in pay rates and 
            position, authorizations for payroll deductions, earnings records, W-4 form,  
            specimen signatures, and termination data where appropriate?    

        c) Are written termination notices required that properly document reasons for 
             termination and do these notices require the approval of an appropriate agency
            official?

        d) Do physical controls exist over personnel records to prevent their loss or use by 
            unauthorized personnel?

11.   Are notices of additions, separations, changes in salaries, wages, and deductions 
        promptly reported to the payroll processing function?

12.   Do procedures exist for authorizing, approving, and recording vacations, holidays, and 
        sick leave and for approving and controlling compensatory time?

13.   Are terminated employees interviewed as a check on departure and as a final review of
        any termination settlement by the personnel department?

14.   Do employees receive performance appraisals on a regular basis with the results being 
        fully documented?

 

        YES          NO          N/A

15.   Do Department procedures ensure that employees receive the training necessary to 
        perform their assigned duties and to keep up with changes in their field of expertise?

Supervision/Timekeeping

16.   For payroll procedures and timekeeping:

        a) Timekeeping and attendance sheets:

             1.     Do employees enter individual time records into Core-CT?

             2.     If not, is this process performed by the Payroll Unit?

             3.     Is approval of a department head or supervisor required on time sheets or other 
                     attendance record prior to preparing payroll?

              4.     Are changes on time sheets initiated/approved by a department head or 
                      supervisor? 

              5.     Are hours worked, overtime hours, and other special benefits reviewed and 
                      approved by the employee's supervisor?

             6.     Is overtime pre-approved and within budgeted amounts?

17.   a) If a time clock is used, is it placed in a position where it can be observed by a 
            supervisor? 

        b) Are time cards, if used, only punched by the employees to whom they are issued?

18.   Are controls established to ensure that payroll costs charged to grants are done properly 
        and in compliance with these grant agreements?

19.   Are responsibilities for supervision and timekeeping functions segregated from personnel, 
        payroll processing, disbursement, and general ledger functions?

Payroll Processing

20.   For preparing the payroll:

        a) Are time sheets/attendance records checked for computations of payroll period hours? 

        b) Are time sheets reviewed for specified overtime approval as well as approvals of 
            department heads, etc.?

        c) Are overtime hours, rates, and computations checked for accuracy?

        d) Are time sheets reviewed for unapproved erasures and alterations?

        e) Are pay rates verified?

21.   Are documents supporting employee benefit payments (such as accumulated vacation or 
        sick leave) reviewed before disbursements are made?

22.   Are gross pay amounts of current period compared to prior period payrolls and reviewed for 
        reasonableness by a knowledgeable person not otherwise involved in payroll processing?

23.   Is the payroll review (i.e., the examination of authorizations for changes noted on the 
        reconciliations) performed by an employee not involved in its preparation?

24.   Is there a comparison of payrolls to appropriated and budgeted amounts?

 

        YES          NO          N/A

25.   Are payroll advances to employees prohibited or subject to appropriate review?

26.   Are notices of additions, separations, and changes in salaries, wages, and deductions 
        promptly reported to the payroll processing function?

27.   Are appropriate payroll records maintained for accumulated employee benefits (e.g., 
        vacation, sick leave, pension information, etc.)?

28.   Does an adequate system exist for distributing payroll to the proper appropriation 
        accounts?

29.   Do procedures exist for authorizing, approving, and recording vacations, holidays, sick 
        leave, and compensatory time?

30.   Are terminating employees interviewed by the personnel department as a check on 
        departure and as a final review of any termination settlement?

31.   Are biweekly payroll expenditures reviewed and approved by an authorized signatory 
        prior to the payroll cycle?

 

     
     
     

        YES          NO          N/A

EMPLOYEE COMPENSATION PART B: This section is to be completed by agencies that process their own payroll (e.g., for students, patients, or inmates, etc.) and by the Office of the State Comptroller Payroll Services Division.

Segregation of Duties

1.     Is supervision of payroll distribution done by employees:

        a) Who are not responsible for hiring or firing employees?

        b) Who do not approve time reports?

        c) Who take no part in preparing payroll, checks, or envelopes? 

2.     Is the reconciliation of the payroll bank account done by employees who are independent 
        of all other payroll transaction processing activities?

3.     If EDP is used, is the principle of segregation of duties in processing activities maintained?

Procedural Controls

4.     Are wages monitored to determine that they are at or above the federal minimum wage?

Payroll Processing

5.     Are changes to the master payroll file approved and documented?

6.     Is access to the master payroll file limited to employees who are authorized to make 
        changes?

7.     Is the completed payroll register reviewed by someone independent of payroll preparation 
        and timekeeping and approved before disbursements are made?

8.     Are payroll checks drawn on a separate account operated on an imprest system?

9.     If checks are machine-signed, is there adequate control over the use of the signature plate, 
        and are procedures the same as for vendor checks?

10.   Are payroll checks:

        a) Prenumbered, blank stock controlled, used in numerical sequence?

        b) Accounted for in numerical sequence and reconciled to the payroll register?

11.   Are all voided/spoiled checks properly mutilated and retained?

12.   Do checks contain detail of gross pay and deductions?

13.   For unclaimed pay checks: is a continuing record maintained of all unclaimed wages?

14.   Monthly, quarterly, or annually, is there a reconciliation of gross and net pay amounts as 
        shown on tax returns to total payroll on the payroll register and general ledger?

Comments:

DO NOT WRITE IN THIS BOX - AUDITORS USE ONLY

Preliminary opinion on the above Internal Control Matters:

Employee Compensation - Payroll and Personnel

Good          Fair          Poor