As mentioned in last week’s Internal Control Tip of Week, controls related to payroll and benefits are absolutely essential. This is because 85 percent of school districts’ operating expenditures in school year 2014-15 were for payroll and benefits for 670,000 staff that were paid over $37 billion in payroll and benefits. One of the controls referenced in last week’s article was “Review and approval of payroll reconciliations prior to distribution of each payroll.”
It’s important to understand that the payroll reconciliation process should involve more than comparing payroll calculations generated from within the system used to generate paychecks. The payroll reconciliation process should involve comparing summary dollar amounts derived from information organized from sources external to the payroll calculation system to summary dollar amounts generated by the payroll calculation system. Some school districts are using workplace collaboration tools to streamline the process for organizing information about personnel-related events so that all of the key data and supporting information are accessible in a single spreadsheet, form or report.
Key personnel related events to organize for the payroll reconciliation include:
- Date modified
- Employee #
- Last name
- First name
- Position
- Location
- Supervisor
- Original hire date
- Employee classification (classified/non-classified)
- Contract (yes/not)
- Date recommended
- Old salary
- New salary
- Salary increase-decrease
- Old stipend
- New stipend
- Stipend increase-decrease
- Old allowance
- New allowance
- Allowance increase-decrease
- Effective date
- Remarks
- Reason for change
- Board approval required (yes/no)
- Board meeting date