The Louisiana legislative auditor has found that the Louisiana Department of Revenue has not effectively managed payroll for the past two years, resulting in a higher risk of errors or fraudulent activities.
According to a report issued last week, auditors stated that for the second year in a row, LDR failed to maintain sufficient controls over payroll processing. This led to employees not certifying their time statements in a timely manner and supervisors not approving time statements promptly.
All employees in the department must follow the policy of certifying their time statements. These statements are then approved by supervisors and monitored by timekeepers through the e-certification process.
During the period of January 9, 2023, to June 30, 2023, auditors thoroughly examined 6,899 time statements. The audit revealed that approximately 4% of these statements, totaling 280, were certified by employees between one and 83 days after the designated deadline. Additionally, about 2% of the statements, amounting to 141, were not certified at all.
According to the report, out of 6,927 time statements that required supervisor approval, 856, or more than 12%, were approved within one to 144 days after the payroll posting. In contrast, approximately 3% of the statements, totaling 209, were never approved.
According to auditors, the management of LDR should ensure that employees adhere to the organization’s policies and procedures. This includes timely certification and approval of time sheets. In situations where employees are unable to complete these tasks within the specified deadlines, the management should ensure that proper certification, approvals, and retroactive adjustments are made as soon as the employee is back to work or able to fulfill the task.
Then-Secretary of Revenue Kevin Richard agreed with the recommendations in a letter to Louisiana Legislative Auditor Mike Waguespack on December 22. In the same letter, Richard also explained the reasons behind the delays or lack of certifications or approvals. Following this, former Mandeville Republican state Representative Richard Nelson was appointed by Governor Jeff Landry to lead the department.
Richard made a commitment to tackle the issue of untimely certifications by introducing updates to the department’s timekeeper manual. He ensured that these updates would be distributed to timekeepers and made readily available to employees on the department’s website.
Richard provided a comprehensive explanation for why employees may encounter difficulties in certifying their timesheets by the payroll deadline. Some common reasons include illness or the need for family leave, scheduled time off, instances where employees did not work during the specified period, terminations, and office closures coinciding with payroll certification dates.
The updated timekeeper manual will require employees to certify their timesheets “as soon as reasonably possible upon returning to work.” In the “employee remark” section, employees will be asked to provide standard comments to explain the reason for any delays. Acceptable reasons for the delay include family leave, approved leave, office closure, or being absent during the pay period.
Supervisors will now have the ability to approve or decline an employee’s time statement prior to their return.
Richard emphasized the importance of supervisors not only approving or declining the time statement but also providing a comment in the ‘Approver Remark’ section. This comment should explain the reason behind the supervisor’s decision before the employee takes any further action.
In his message, he expressed confidence that LDR’s actions will address the concerns raised by your office and effectively prevent any future occurrences of similar issues.