Process for Monthly Pre-Approval of Exempt Employee Pay

In each of the last two years, our external auditors, KPMG, have noted instances whereby terminated employees continued to have access to certain University and Health System information systems.  In addition, instances were noted in which terminated exempt (monthly-paid) employees continued to be included in payroll systems for a period of time after their true termination date.  As a result of not processing appropriate, timely termination notifications, the Health System has occasionally paid ex-employees for several months after their termination through direct payroll deposits.  This is an unacceptable situation.  It is the responsibility of departmental managers and supervisors to notify Payroll and Human Resources immediately upon employment termination of both exempt and non-exempt employees.  The termination notification process has been simplified by the introduction of the “iForms” online termination form and it should be used in accordance with University and Health System policy. 

Effective beginning April 1, 2008, as an added internal control over exempt employee monthly payroll, departmental managers and supervisors will be asked to complete an additional review in “ReportXpress” at the beginning of each monthly pay period.  The procedure for Approving Exempt Employee Time Records includes a new step for Current Period Time Records.  For an exempt employee that has been or will be terminated in the current period/month, the manager/supervisor must ensure the appropriate iForm has been prepared, approved and submitted to avoid overpayment to the employee.  Once all exempt employees in the department have been reviewed and corrected in the ReportXpress system, a copy of the correct employee listing should be printed, signed and dated, and filed in the department as proof of a timely review. 

Duke University &

Duke University Health System

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To support our monitoring of progress with respect to this issue, Corporate Payroll will be reporting all overpayments of DUHS employees as a result of delayed iForm processing to Corporate Finance on a quarterly basis, beginning in March 2008.  Corporate Finance will share this information with the administrative leadership of each DUHS entity as appropriate, and follow-up as necessary with departments responsible for the overpayments.  A failure to subsequently recover such overpayments does have a direct financial impact on our Health System and the department involved. 

Most all internal control procedures depend on our people to complete and document transactions in accordance with policy.  We believe this change for exempt employee pay approval will help to control inadvertent overpayments.  Thank you, in advance, for helping implement this change.