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City Comptroller William C. Thompson, Jr. today released a follow-up audit finding that the City’s Office of the Actuary implemented most of the recommendations from a previous audit to improve its record keeping, purchasing, and, inventory operations.

“I am pleased to learn that the Office of the Actuary has taken steps in the right direction to strengthen its administrative practices since my last audit,” Thompson said. “However, it is important that all of the recommendations are fully implemented to ensure that the Actuary is in compliance with the rules and standards for city agencies.”

The Actuary performs annual actuarial valuations of the assets and liabilities of the City’s five actuarial retirement systems and other, non-actuarial, pension funds. It also computes employer contributions and members’ benefits, determines suitability of actuarial assumptions, and, recommends changes when necessary. The Actuary provides services and information to City agencies, legislative bodies, and, active and retired employees.

The Comptroller’s follow-up audit, which covered July 1, 2004 to June 30, 2005, reviewed the Actuary’s payroll, personnel, purchasing, timekeeping and inventory procedures. The audit determined that five of the eight recommendations were fully implemented. The audit shows that the Actuary:

• updated the inventory list and conducted periodic counts of all physical assets,
• prepared and maintained purchase requisitions and receiving reports,
• used miscellaneous vouchers for allowable purposes,
• prepared requisition for imprest fund purchases, and,
• ensured that employees sign for their paychecks

The audit also found that two of the eight recommendations were moderately implemented. The Actuary partially put into place:

• adequate procedures to ensure that duties within the purchasing and timekeeping/payroll functions were sufficiently segregated, and,
• a list of physical assets.

The auditors found that the final recommendation from the previous audit was not implemented and that the Actuary failed to ensure that all employee time reports were signed by the preparer, supervisor and data entry operator.

Thompson’s follow-up review of the Office of the Actuary identified two new issues. The audit found that the Actuary permitted several employees to accumulate annual leave balances in excess of the maximum amount allowable, and, that the person responsible for paycheck distribution did not sign the Payroll Management System’s Paycheck Distribution Report.

Thompson recommended that the Actuary:

• address issues from the previous audit;
• consistently implement its procedures to ensure that the duties within the purchasing and the timekeeping-payroll functions are sufficiently segregated;
• ensure that the pre-numbered inventory tags are affixed to all items;
• include the tag number and serial number for all items on the inventory list;
• ensure that all Employee Time Reports are signed by the preparer, the supervisor, and the Payroll Management System;
• convert excess annual leave to sick leave at the end of each leave year unless it authorizes the carryover in writing in accordance with the Department of Citywide Administrative Service’s rules and leave regulations; and,
• ensure that the Paycheck Distribution Control Report is certified on each page.

In response to the audit, the Actuary indicated that “in general, the Office of the Actuary agrees that additional improvements could be made in providing documentation for some current practices and in redistributing responsibilities for certain sequential administrative processes.”