HOLMDEL – The Township Committee has approved a corrective action plan in the wake of findings that were noted in an audit report submitted by Suplee, Clooney and Company for the period ending Dec. 31, 2019.
Holmdel Chief Financial Officer William E. Antonides Jr. said a corrective action plan was required to be submitted to and approved by the governing body. The plan was drafted by the Finance Department.
Areas of concern were noted in purchasing and payroll, according to the committee’s resolution approving the corrective action plan.
Regarding purchasing, the auditor found that Holmdel “maintains an encumbrance accounting system as required by (state law); however, we discovered several purchases by certain departments that were confirming purchase orders. These purchases for goods or services were done prior to the funds being encumbered by the chief financial officer in contradiction to the requirements of the administrative code,” according to the resolution.
The auditor recommended that Holmdel “strengthen the internal controls over the encumbrance accounting system.”
Municipal officials said the township would immediately “reiterate the requirements of the encumbrance accounting system to all departments and especially to those departments where confirming purchase orders have been noted.”
Regarding payroll, the auditor’s examination of the internal controls related to payroll revealed that proper segregation of duties was not being maintained in the following instances:
“Payroll is not reviewed by an individual not involved in its preparation prior to disbursement. The individual who prepares the payroll also reconciles the payroll bank account. Certain employees’ compensation did not have federal taxes withheld in an amount required by the IRS.
“Employee health waiver calculations are not being calculated in accordance with (applicable regulations). The township did not include imputed income for group term life insurance coverage in excess of $50,000 on employees W-2s as required by the IRS,” according to the resolution.
The auditor recommended that Holmdel officials “strengthen the internal controls over the payroll accounting system.”
In response to the findings, municipal officials said Holmdel’s Finance Department “was not fully staffed for the majority of 2019. This resulted in the lack of available time to fully segregate certain duties.
“This situation has been rectified in 2020 by staffing changes in the Finance Department. There are also certain limitations of the payroll software currently used by the Finance Department to process the payroll accurately.
“The township is reviewing options to change the software used in the processing of the payroll to negate the other issues noted,” according to the resolution.
Municipal officials said the finance office will be fully staffed by December and said Holmdel will be changing the software used for payroll and human resource functions beginning in December.
