The City of New York Office of the Comptroller
Bureau of Financial Audit

AUDIT REPORT ON THE PURCHASING, TIMEKEEPING, AND PAYROLL PRACTICES OF THE BOARD OF CORRECTION

MH07-129A
May 2, 2008

AUDIT REPORT IN BRIEF

Download the Complete Audit Report (pdf 173kb)

The objective of the audit was to determine whether the Board of Correction (BOC) complied with applicable purchasing, timekeeping, and payroll policies and procedures established by the agency, and those set forth in the Comptroller’s Internal Control and Accountability (Directives), New York City leave regulations for non-managerial employees, and Procurement Policy Board rules.

BOC promulgates minimum standards for the custody, correction, health and mental health care, treatment, supervision, and discipline of all inmates held in City correctional facilities, and conducts inspections of these facilities to ensure compliance.  BOC also reviews grievances by inmates and employees of the Department of Correction.  BOC’s actual expenditures for Fiscal Year 2007 totaled $905,222.  

Audit Findings and Conclusions
               
                BOC generally complied with applicable purchasing, timekeeping, and payroll policies, with the exception of weaknesses in BOC’s compliance with accounting requirements for purchases.  Based on our review of Other Than Persosal Service (OTPS) payment vouchers, purchase orders, and invoices, and of imprest fund transactions, we determined that most purchases were properly accounted for, legitimate, and necessary for BOC operation.  Most payment vouchers had appropriate documentation.  Most purchases made using the imprest fund included supporting documentation such as receipts and invoices; the imprest fund checking account was properly reconciled on a monthly basis; and checks were made out to specific parties as opposed to “bearer” or “cash.”  In addition, this account was reconciled by an individual independent of the person processing entries to the imprest fund checking account.

However, we found that in certain instances BOC does not have adequate oversight over the vouchering process, specifically as it relates to accounting requirements and sick-leave documentation.  BOC did not adequately implement Comptroller’s Directive #24, which establishes requirements on the use of Financial Management System (FMS) documents for City agency purchases, including those paid for by the use of miscellaneous payment vouchers.  BOC:

• Issued POs for all 52 PVEs instead of using the new PC and PD purchase documents and CT contract documents when required; 

• Did not have on file accompanying invoices for nine payments, totaling $668; and

• Used miscellaneous vouchers improperly.

In addition, a review of BOC’s timekeeping records for the period January 1, 2007, through June 30, 2007, found that there were three employees who did not have the required medical documentation on file for charges to their sick leave.

Audit Recommendations

                 Based on our findings, we make nine recommendations, four of which are listed below.  BOC should:

• Ensure that it complies with Comptroller’s Directive #24 and uses the appropriate Purchasing Documents for its purchases.

• Ensure that all vendor documents, such as invoices, receiving reports, and bids are maintained, as required.

• Ensure that miscellaneous payment vouchers are used in accordance with Comptroller’s Directive #24.

• Ensure that sufficient medical documentation is received prior to charging documented sick leave balances for an employee’s illness or for an employee’s care of an ill family member.

BOC Response

                BOC generally agreed with five of the audit’s recommendations, believed it had already implemented two recommendations prior to our audit, and did not address two recommendations.