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Audit Objective

Determine whether the Village of Dering Harbor (Village) Board of Trustees (Board) developed adequate controls over payroll and employee benefits payments.

Key Findings

The Board did not establish adequate controls over payroll and employee benefits payments.

• The Board did not require formal, written employment contracts to document terms of employment, job descriptions and responsibilities, work hours, salaries or hourly rates and employee benefits.
• The Village paid overtime payments to employees as if they were independent contractors.
• The Board approved reimbursements to employees for medical benefits claims without ensuring they had adequate supporting documentation.

Key Recommendations

• Establish formal, written employment contracts with employees.
• Require employees to maintain detailed time and attendance records.
• Perform a thorough audit of claims to ensure payments for employee benefits have adequate supporting documentation.

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