Council Decides It’s Time for a Payroll Audit

The City Council has agreed to retain a Los Angeles-area law firm to conduct a comprehensive payroll audit for the municipal government, apportioning up to $60,000 for the job.
Council members voted unanimously at their meeting on Oct. 9 to contract with Atkinson, Andelson, Loya, Ruud & Romo. Officials characterized the audit as a long time coming for a city that has experienced significant turnover in payroll-related staff throughout the past few years.
“These are things that have not been done for quite some time,” City Manager Marcella Marlowe said. “It is an excellent idea to have an outside firm come out and look at our practices and make sure we are in keeping with all the changes in the law.”
The audit will include analysis of how the city records hours worked and payroll information, among other items, and perform evaluations to ensure compliance with the Fair Labor Standard Act and other labor laws. In observance of turnover and the size of San Marino’s bureaucracy, the analysis also will identify best practices and procedures for the operation.
The audit is expected to take “several months,” according to Marlowe, and is in part born of the “many concerns” raised by a 2016 ad hoc committee that was commissioned by the City Council to conduct an analysis of all municipal operations. Marlowe added that staff is “unable to ascertain” when the last payroll audit was conducted and urged the council to seek outside help instead of considering an in-house audit.
“It would be my sense that certainly in recent history we have never done a payroll audit,” she added. “We really need to go outside. We have people who are designated to process payroll; that is not the same thing as being an expert in payroll, and on top of that, what you want is an outside attorney who has familiarity with all of the labor law changes.”
Marlowe added that she expects the audit to cost anywhere from $20,000 to $60,000. The auditing firm, whose myriad Southern California offices include a Pasadena location, offered the least expensive of three bids; the others were for a flat $75,000 and up to $240,000. She acknowledged it was “counterintuitive” to shell out that money for a payroll audit, but it was “In the interest of protecting the community’s money” moving forward.
“I will say that the interim human resources manager and I were a little stunned when we got that first proposal, and so of course we went out for our three bids and were even more stunned to find that that actually was the cheapest proposal of all of them,” Marlowe said. “It is a very costly affair.”
Council members were supportive of the audit, with Ken Ude adding that he’d like for Marlowe to explore where savings can be made elsewhere in the budget to allow for the expenditure. Councilwoman Susan Jakubowski, who served on the aforementioned ad hoc committee, recalled the many problems associated with payroll she and her team uncovered.
“I would be delighted if we got that item put to bed,” she said.
“I think this is a one-time cost, at least for a little while,” added Councilman Steve Talt, “so it’s not something that’s going to pop up all of the time, and it will protect us in the future.”

Leave a Reply