[read complete report – pdf]

Audit Objective 

Determine whether Town of Hector (Town) employee compensation was authorized, accurate and supported. 

Key Findings 

Town employee compensation was not always authorized, accurate and supported. Of the 53 employee records that we reviewed, we determined that Town officials: 

• Paid 10 employees a total of $150,155 that was not authorized by the Town Board (Board). 
• Inaccurately accrued and/or recorded leave time totaling 1,830 hours valued at $38,586 for 20 of 23 eligible employees. 
• Paid one employee $5,271 for a separation payment that was not approved by the Board. 

Key Recommendations 

• Annually establish and approve employee salaries or pay rates by position and/or employee name, and adopt resolutions for any employee salary or pay rate change that occurs during each year. 
• Ensure that employees accrue and use leave time according to the employee handbook or highway contract. 
• Adequately certify the Town’s payroll by reviewing and comparing payroll reports to supporting source documentation. 

Town officials generally agreed with our recommendations and have initiated or indicated they planned to initiate corrective action.