Purpose of Audit

The purpose of our audit was to review internal controls over payroll processing for the period January 1, 2013 through March 31, 2014.

Background

The City of Ogdensburg is located in St. Lawrence County and has a population of 11,128. The City’s budgeted appropriations for 2014 were approximately $19.1 million. The City is governed by an elected seven-member Common Council comprising a Mayor and six Councilors.

Key Findings

• City officials did not ensure that internal controls over payroll processing provided for adequate segregation of duties. The payroll clerk performed all significant phases of the payroll process.
• No one reviews the completed payrolls. The payroll clerk gives the Comptroller a report from the computerized payroll system that lists the gross pay for each individual employee separated by appropriation budget codes. The Comptroller uses the report to enter the payroll expenditure totals into the central accounting records, but does not review the individual employee names and respective pay amounts for accuracy.

Key Recommendations

• City management should segregate the payroll clerk’s duties so that one person does not control all significant aspects of the payroll process. Where it is not feasible to adequately segregate duties, City officials should routinely monitor and review the payroll clerk’s work.
• The Council should ensure that a City official who is independent of the payroll process reviews completed payrolls for accuracy and signs (certifies) the payrolls to indicate their review.