View of Responsible Officials: Management agrees with the finding and recommendation. Corrective Action Plan: Problem The financial audit conducted by N&K identified that there were two (2) incorrect deduction amounts that were entered into the HRIS system, resulting in an overcharge to the employee...
View of Responsible Officials: Management agrees with the finding and recommendation. Corrective Action Plan: Problem The financial audit conducted by N&K identified that there were two (2) incorrect deduction amounts that were entered into the HRIS system, resulting in an overcharge to the employee. Upon investigation, it was determined that the HR Administrator updated the wrong benefits deduction entry, which caused an incorrect overcharge for the employee’s life insurance deduction and an incorrect undercharge to their long-term disability insurance deduction. The incorrect charges occurred over a span of 15 months to a total overage of $913.59, for which the employee was not reimbursed. Root Cause The error occurred during the organization’s benefits carrier switch from Prudential Financial to The Standard. Their existing process—where the Administrator inputs changes and the Assistant performs a post-entry review—failed to detect the error, resulting in a finding within the auditor’s report. The issue appears to stem from a combination of process and control weaknesses: • Manual data entry error by the Administrator • Ineffective secondary manual review, likely due to: o Lack of a standardized checklist or validation criteria o Insufficient sampling or inconsistent spot-check methodology • Lack a system-based validation controls within the HRIS system (e.g., thresholds, alerts) • Limited accountability clarity for final verification • Lack of periodic audits in case errors are missed Immediate actions to address the current issue and mitigate employee impact • Calculate and process reimbursement for the overcharged employee (completed) • Communicate transparently with the affected employee regarding: o Nature of the error o Correction made o Reimbursement payment • Conduct a targeted audit of recent deduction changes to identify any similar errors (completed) Corrective Action Plan (Preventive Controls) To prevent future occurrences from happening, unit will implement the following changes to its administrative procedures: 1. Standardized Data Entry Protocol The unit will utilize its HR Action Form as a standard processing mechanism for benefit deduction changes made within the HRIS, including:• Source documentation verification (e.g., enrollment forms, carrier files) • Confirmation of deduction amount and effective date This will require both the processor and the reviewer to initial and certify that the change was accurately completed, thus strengthening its review process. 2. Enhancing review procedure for multiple changes done at the same time The unit will replace its previous “spot check” review process with a structured verification process that mirrors its semi-monthly timesheet report for payroll. This new report will include: • The processor documenting all deductions or changes made • The processor including supporting documentation • The auditor completing a 100% review to confirm work accuracy and cross-verification against source documents • The Director providing a final spot-check and sign-off It is important to acknowledge that these enhanced controls may introduce some operational trade-offs. In the short term, the shift to 100% review and additional dual-verification tasks will likely increase processing time and workload redundancy for both the Administrator and Assistant. There is also a risk of workflow bottlenecks, particularly during high-volume periods such as open enrollment or payroll cutoffs. Closing The implementation of new corrective and preventive measures will establish a more disciplined and reliable control environment around the East-West Center’s benefits administration. By formalizing data entry protocols, strengthening independent review, and introducing layered validation controls, the unit can significantly reduce the likelihood of this occurrence (or other-related HRIS data entry errors) while improving overall data integrity and employee trust. The proposed changes will enhance audit readiness and operational transparency for the Human Resources team.Contact Person: Human Resources Director Anticipated Completion Date: Procedures have been implemented as of report issuance date 32