NEWS RELEASE For More Information Contact:
FOR IMMEDIATE RELEASE Senator Cowles ~ 800.334.1465
February 4, 2014 Representative Kerkman ~ 888.529.0061
Audit Reports Concerns with UW System’s Implementation of Payroll and Benefits System
MADISON – Today, the nonpartisan Legislative Audit Bureau (LAB) released its review of the University of Wisconsin (UW) System’s Oversight of the Human Resource System (HRS) and Payroll and Benefits Processing (report 14-4). HRS, which is used by UW System to administer payroll and benefits for its employees, was largely implemented in April 2011 and was used to process approximately 1.2 million payroll checks and nearly $2.9 billion in payroll-related expenses in fiscal year (FY) 2012-13.
LAB reviewed HRS implementation and reported concerns in several areas, including the adequacy of UW System’s preparedness for implementation, problematic software modifications, incomplete implementation of HRS components at some UW institutions, inadequate staff training, and the use of manual processes for benefit reconciliation. These issues reduced efficiency and increased the cost of HRS beyond the $78.6 million spent by UW System for planning and implementation. For example, UW System spent nearly $3.0 million in FY 2012-13 and plans to spend an additional $2.8 million in FY 2013-14 for efforts to correct immediate concerns related to HRS.
“While a few concerns have been improved, I feel that continued oversight is necessary to ensure that the Human Resource System maintains efficiency and accuracy and remains one of the highest priorities for the University of Wisconsin System,” said Senator Rob Cowles (R-Green Bay).
In January 2013, LAB reported that UW System made certain benefit overpayments, including an estimated $15.4 million in state group health insurance payments from May 2011 through September 2012. In report 14-4, LAB now estimates the loss for state group health insurance overpayments made from April 2011 through May 2013 will total between $10.6 million and $12.7 million. LAB notes UW System has recently reduced benefit overpayments and recommends UW System report to the Joint Legislative Audit Committee on the actual loss incurred and the status of its efforts to correct other problems with HRS and payroll and benefits processing.
In addition, certain HRS security issues reported by LAB in past financial audits remained largely unresolved by UW system. In its FY 2012-13 financial audit of UW System (report 14-3), LAB again reports a material weakness related to HRS security.
The failure of the UW System to rectify security issues remains a concern,” said Representative Samantha Kerkman (R-Randall). “Looking forward, attention to the findings of this audit and specifically the prevention of security deficiencies must be considered and shape the process for future large-scale IT developments elsewhere, such as the STAR project.”
The Joint Legislative Audit Committee plans to hold a public hearing on reports 14-3 and 14-4. To obtain copies of these reports, please visit LAB’s website at http://legis.wisconsin.gov/lab/ or call 608‑266-2818. To report fraud, waste, or mismanagement in state government, call LAB’s hotline at 1‑877-FRAUD-17.