Payroll

A local government’s compensation and benefits costs can run to 50% or more of a government’s total expenditures. Any discussion of the cost efficiency of government services must start with an analysis of your payroll costs. But where to start?

UHY’s GEARS can help you structure your payroll analysis.

What You Need to Start

• Annual Budgets
• Human Resources headcount data
• Payroll Register
• Payroll check Register
• Full-Time Equivalent (FTE) Analysis

You should start by analyzing your FTE employee base. Compare the FTEs in your annual operating budget to the actual FTEs to whom you issued checks. There may be a slight difference. Significant differences require explanation. But you must go beyond the pure number of FTEs to analyze the annual or hourly compensation rate. Based on the yearly or hourly rate from the paychecks, compare that to the averages in your budget. Again, slight variances are expected, but significant variances should be analyzed.

Finally, pull the payroll data up to the total department level to compare to the department payroll in your adopted budget. Investigate large variances.

Overtime

Begin your overtime assessment by aggregating overtime by employee from the payroll register. Sort the results by employee and by department. Assess whether overtime is distributed equitably among employees and is in line with expectations.

Benefits

You should reconcile your monthly benefits invoices to your active employee listing to ensure you are only paying for the benefits of entitled employees.

A few quick analyses can help you assess the efficiency of your payroll process and lead to specific return efforts. UHY’s GEARS services can help you with your assessment.