The Village of Walden failed to properly document and authorize some employee payroll payments, overtime, leave accruals and separation benefits, resulting in $144,767 in questionable payments and benefits, according to a state audit released Oct. 27.

The New York State Comptroller’s Office found that village officials did not consistently follow municipal policies or collective bargaining agreements (CBAs) when administering payroll and employee leave benefits. The findings were discussed by the Walden Board of Trustees during its Oct. 20 meeting, when officials considered changes to timekeeping procedures and time-off requests.

The comptroller’s office initially examined the period from June 1, 2021, through May 31, 2023. The audit period was extended through Aug. 29, 2023, to review direct deposits, and through Feb. 15, 2024, to examine separation payments. During the period reviewed, the village paid approximately $9.2 million to 203 employees.

The audit sought to determine whether village officials ensured that payroll payments and leave accruals were accurate, approved and supported by adequate documentation. The comptroller’s office noted that proper payroll procedures and leave records are essential to accountability, effective internal controls and the protection of taxpayer funds.

The audit concluded that village officials did not consistently ensure that employee payments and leave accruals were accurate, properly approved or adequately documented. Officials also failed to administer compensation and leave benefits in accordance with village policies and collective bargaining agreements, increasing the risk of improper use of taxpayer funds.

Weaknesses in payroll oversight and internal controls contributed to $144,767 in unsupported, unauthorized, inaccurate or inadequately documented payroll payments, leave accruals and employee benefits, according to the report.

As part of the audit, the comptroller’s office reviewed $575,036 in payroll payments for 25 employees and $97,640 in separation payments for 12 employees.

Among the deficiencies identified were:
• $87,265 in time worked without adequate supporting documentation.
• $28,218 in errors involving separation payments.

• $17,854 in unsupported or unauthorized overtime.
• $7,857 in unauthorized leave accruals.
• $3,573 in payroll payment errors.

Auditors also identified 617 instances in which employees changed their scheduled work shifts without documented authorization or justification, 289 instances in which employees used leave time without supervisory or management approval, and 24 instances in which employees charged more leave time than they had accrued.

The comptroller’s office issued 14 recommendations to the Board of Trustees aimed at strengthening payroll and leave administration, improving accountability and oversight, and ensuring that employee compensation and benefits are accurate, authorized and properly documented.

Village officials agreed with the recommendations and indicated they would take corrective action, according to the report.

Board considers changes to timekeeping, leave policies
During the Oct. 20 meeting, Mayor Becky Pearson and trustees discussed the audit findings and steps the village could take to prevent similar problems. Much of the discussion centered on timekeeping procedures and establishing a more formal process for requesting time off.

Pearson said village Treasurer Roberta McBride had submitted a report to the state comptroller outlining corrective actions the village plans to implement. McBride also is developing standardized forms for employee time-off requests.

“Our new treasurer took part in the audit report, and she sent back an awesome report to the comptroller of what we’re going to be doing to change that,” Pearson said. “She’s writing how they get time off, and that we have a policy we’re looking at. She’s making forms that have to be filled out by department heads, managers and employees, so they can’t just say, ‘I’m going to take tomorrow off.’”

Trustee Jerred Sanusi said the board should establish a clear approval process for time-off requests. He suggested employees submit requests to the village clerk, who would forward them to the appropriate manager or department head for approval.

Sanusi proposed establishing a two-day turnaround for requests, with a system allowing the clerk to move a request to the next level of approval if it is not addressed within the allotted time.

“I’m suggesting that time off has to be requested through a form. It would go to the clerk, and the clerk would then distribute it to either the manager, department heads or whoever had to make that approval,” Sanusi said.

“The idea is we want to make sure that this process doesn’t hurt our employees, and that they get approval quickly and efficiently. So it’s a mixture of the two; we want to cover ourselves, but we also can’t have a procedure that makes it difficult for our employees to get approval on their time off.”

Sanusi also said the village’s existing leave policy needs clearer language, particularly regarding when employee benefits are renewed. He suggested specifying whether benefits are based on a calendar year, an annual period or the village’s fiscal year.

He also recommended including state holidays and correcting language in the sick leave provision.

“One of the things that we need to discuss is annual vs. fiscal year when things get renewed for our employees,” Sanusi said. “Because right now there’s some stuff that says their benefits renew on a fiscal year, and there’s some that say benefits are renewed on year, but they don’t define whether that’s annual or fiscal. So I think that stuff we need to make sure it’s all written down so that we’re covering ourselves.”

Sanusi pointed to language requiring employees to notify supervisors about sick leave within an hour, saying it could be interpreted to mean an employee could call just minutes before a scheduled shift.

“I don’t think that was the intent, so that needs to get changed under the sick leave portion,” he said.

Trustee Lynn Thompson said the village also needs to improve enforcement and documentation of leave requests. She raised concerns about having too many employees, particularly department heads, on vacation at the same time.

“One of the big sticking points is too many people being off at one time. That needs to be addressed,” Thompson said.

She recalled instances in previous years when three department heads were on vacation simultaneously, creating potential problems for municipal operations. Thompson said the issue should be discussed with the village manager and board.

She also noted that the village has not traditionally required approval of time-off requests for certain employees, including those working directly for the board.

The board agreed to review the audit findings and proposed changes to the timekeeping and leave policies with the village manager and treasurer. Pearson also suggested seeking input from the village’s labor attorney before finalizing revisions.

“I think we should have Kate look at this again, and maybe go over it with Roberta, so we can find out the fine tunes,” Pearson said. “We could also send it to the labor attorney; the way it’s written, he can fill in and take out or remove things for us. I think that would be a good thing first.”

Pearson said the village is also continuing to work on improvements to its time clock procedures.