Office of the Legislative Auditor - Financial Audit Division

The departments of Employee Relations and Finance had controls to ensure that employee pay and accrual rates are correct.  The departments also had controls to ensure that the payroll is accurately processed and recorded in the state’s accounting system.  However, as highlighted in the next section, we identified some internal control deficiencies.

Key Findings:

• The departments of Employee Relations and Finance have not developed a comprehensive plan and process to manage personnel and payroll-related risks.

• The Department of Employee Relations’ criteria for delegating personnel duties were not well defined.

• The departments of Employee Relations and Finance have not adequately limited the ability of employees to perform incompatible payroll and personnel transactions in SEMA4.

We assessed SEMA4 application controls as of October 2006.

During fiscal year 2006, the state processed personnel and payroll transactions for over 50,000 employees, resulting in total payroll and business expenses that exceeded $3 billion.

The state administers its personnel and payroll responsibilities through individual state agencies and two central oversight agencies: the departments of Employee Relations and Finance.  The Department of Employee Relations provides support for personnel functions, and the Department of Finance oversees payroll processing.  Both departments maintain the central personnel and payroll system, called the State Employee Management System (SEMA4).