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This is the seventh in a series of articles on red flags and this week's article focuses on human resources. Red flags may represent subtle or somewhat more obvious vignettes that "something is wrong with this picture" that can be sometimes overlooked by executive management or supervisors. Accordingly, an essential aspect of internal controls is to train appropriate staff to increase their awareness of and to be monitoring for various red flags that are relevant to various control areas. 

Red flags associated with human resources include:  

• Are there leadership issues within the HR department that appear to have resulted in ineffective communication and relations between HR and select offices or departments?
• Have human resources staff received minimal or no training in the district’s systems and processes, HR functions, or duties and responsibilities of their respective positions?
• Are roles of each HR department staff member not clearly defined?
• Are job descriptions for HR positions not current or updated?
• Are HR employees’ job descriptions not signed?
• Are HR employees not cross-trained?
• Has HR purchased select software system(s) without input from technology staff, including teacher evaluation software?
• Are salary negotiations made by select offices or departments without the involvement of HR?
• Are select HR data records managed in spreadsheets outside of the installed HR system?
• Is the HR department issuing and administering employment contracts by hand?
• Is an automated position control system or functioning system not installed?
• Are processes for structured interviews and standardized questionnaires not in place?
• Is a standardized interview score sheet not in place or consistently used by offices and departments? Is the standardized score sheet not distributed to the interview team or person conducting the interview prior to the interview?
• Is a professionally written letter not sent to candidates not selected for a position?
• Does the HR department lack a process for screening applicants for minimum qualifications (e.g., criminal background check, appropriate certification/licensure) prior to interviews?
• Are administrators and supervisors lacking training on the district’s protocols for the interview process and appropriate interviewing skills?
• Are there errors in recording the effective date of employment for new employees?
• Has a substantial lag time occurred between a campus/department administrator’s request to hire and the approval of the executive director of human resources to offer the position, resulting in the loss of top candidates? Does the district lack a sufficiently expedited process for approval and hiring process including finalizing any background, qualification, and reference checks; setting the pay; and offering the position?
• Is there a lack of a comprehensive onboarding process that includes presentation of employee leave and benefits information?
• Does the district lack an established process for onboarding, determining the staff to be involved, cross-training staff, and setting a routine schedule for onboarding sessions?
• Is the district not consistent in providing a copy of the service record to the requesting district within the 30th day after the later of: the date the request is made or the date of the last day of the individual’s service to the district?
• Are employee files are not located in an appropriately secured environment including a fireproof room; locked cabinets; and a room that is only accessible by select employees in the HR office?
• Is the district maintaining HR records beyond the minimum retention period according to the Texas State Library and Archive Commission’s minimum retention period?
• Are certain forms, including direct deposit forms and tax forms (Form W-4), filed in HR instead of the payroll office?
• Are certain forms, including medical information, filed in HR instead of the benefits office?
• Is confidential information organized in the employee’s primary HR file instead of being organized in separate, confidential files? (Confidential information may include but is not limited to: evaluative information, such as walk-through summaries, memos of concern, professional growth plans, corrective or disciplinary actions; criminal history information; and alcohol and drug testing information.)
• Are the Form I-9 and supporting documents that confirm an employee’s identify being filed separately from the employee’s primary HR file so access is less complicated if the district is investigated or audited in this area?
• Are the employees’ primary HR files inconsistently organized?
• Is there not a practice of including a checklist of contents in each employee’s primary HR file?
• Upon hire, are new employees’ social security numbers not verified?
• Has the current employee handbook not been distributed to select employees, have acknowledgment receipts not been collected from select employees, and/or is the handbook not posted on the district’s website?
• Have select employees not been notified of any additions or changes to legal and local policies during the past year?
• Is the substitute pay schedule not consistently communicated to substitutes during orientation and/or not available to current and potential substitutes through the district’s website?
• Is the district not conducting annual performance appraisals of all employees?
• Has the district experienced significant staff turnover in select offices or departments, or on select campuses in the past three years?
• Is a comprehensive exit process for staff members developed by the HR and business office staff lacking?
• Does the district lack a clear, long-range compensation plan, or any standard operating procedures for salary administration?
• Is the current compensation plan unclear?
• Are there no salary administration procedures that document salary determination, or authorization?
• Are personnel action memorandums not used to authorize changes to professional employee pay?
• Are there wide variances between the minimum and maximum estimated annual salaries across select professional and/or select support positions?
• Does the total number of years of experience not directly correlate to annual salaries, in some instances?
• Are change forms lacking for paraprofessional and auxiliary employees (personnel action forms) documenting changes in position, salary or duties?
• Are change forms lacking for professional employees (personnel action forms) documenting changes in position, salary or duties?
• Does the district lack a long-range compensation plan to recruit and retain high-quality staff?
• Do select positions default to 253 or 226 days, for example, instead of the optimum number of work days to support the functional area(s)?
• Do official communications for approved personnel actions consist of copies of emails instead of being appropriately documented as memos to the file.
• Is an employee exit session process lack a face-to-face meeting in which the employee receives information about final pay, benefits, leave, teacher service record, payroll deductions, TRS account, and other financial and benefits-related information?
• Does the employee exit session process lack an opportunity for the individual to complete an anonymous electronic exit survey, which includes questions about the individual’s employment experiences and reason for separating from employment?
• Has the HR executive director not routinely reviewed exit survey responses; assign a staff member to track or record the exit survey results; and provide a semi-annual or annual report of the data to the superintendent?

Any indications or observed red flags should be promptly evaluated and consideration be made for prompt follow-up. In most instances, red flags are signs that relevant processes and key controls should be reviewed and modified, as needed, and staff should receive additional relevant training to improve their skills and expertise.