Auditors of Public Accounts
- Document type
- Report
- Date
- 2022-03-09
Source document: Auditors of Public Accounts; document type: inspector-general-sigpr-reports.
Full text
STATE OF CONNECTICUT
AUDITORS OF PUBLIC ACCOUNTS
JOHN C. GERAGOSIAN CLARK J. CHAPIN
AUDITORS' REPORT
DEPARTMENT OF LABOR
FISCAL YEARS ENDED JUNE 30, 2019 AND 2020
Table of Contents
EXECUTIVE SUMMARY ....................................................................................................... i
AUDITORS’ REPORT ............................................................................................................. 1
COMMENTS ............................................................................................................................ 2
FOREWORD ............................................................................................................................ 2
RÉSUMÉ OF OPERATIONS .................................................................................................. 5
General Fund ..................................................................................................................... 5
Special Revenue Funds ..................................................................................................... 6
Fiduciary Funds ................................................................................................................. 8
STATE AUDITORS’ FINDINGS AND RECOMMENDATIONS....................................... 12
Leave Time Usage and Accountability Issues ................................................................ 12
Inadequate Controls over Cash Receipts ......................................................................... 13
Lack of Administrative Oversight for Boards ................................................................. 14
Improper Utilization of State Fleet Vehicles ................................................................... 17
Ineffective Management of Employer Workplace Violation Case Files and Handling of
Receipts ..................................................................................................................... 18
Inadequate Controls over Equipment Inventory and CO-59 Reporting .......................... 21
Lack of Effective Oversight over State Regulations ....................................................... 23
Write Off of Receivables ................................................................................................. 24
RECOMMENDATIONS ........................................................................................................ 26
Status of Prior Audit Recommendations: ........................................................................ 26
Current Audit Recommendations: ................................................................................... 28
ACKNOWLEDGMENTS ...................................................................................................... 30
i
Department of Labor 2019 and 2020
March 9, 2022
EXECUTIVE SUMMARY
In accordance with the provisions of Section 2-90 of the Connecticut General Statutes, we have
audited certain operations of the Department of Labor (DOL) for the fiscal years ended June 30,
2019 and 2020. Our audit identified internal control deficiencies; instances of noncompliance with
laws, regulations, and policies; and a need for improvement in practices and procedures that
warrant the attention of management. The significant findings and recommendations are presented
below:
Page 17
DOL did not prepare monthly motor vehicle usage reports properly since some
included instances in which official state business miles were not separated from non-
business miles. DOL does not calculate or report taxable fringe benefits for employees
who regularly park their state-owned vehicles at home. DOL did not obtain DAS
approval for two employees to garage state-owned vehicles at their home. The
Department of Labor should comply with DAS General Letter 115 – Use of State-
Owned Motor Vehicles and develop procedures to accurately calculate and report the
taxable fringe benefits for commuting or personal use of a state vehicle.
(Recommendation 4.)
Page 18
DOL did not have adequate controls in place over complaints, lacked a cash receipts
log and a reconciliation process between receipts and deposits, and did not promptly
make or record deposits. The Department of Labor should implement internal controls
to ensure that all complaints are properly documented within the eWage system. The
department should develop policies and procedures to properly safeguard receipts, and
ensure compliance with accounting and deposit requirements in accordance with
Section 4-32 of the General Statutes and the State Accounting Manual.
(Recommendation 5.)
Page 21
DOL’s asset inventory is incomplete and unreliable. Core-CT inventory records
indicate that the department conducted the most recent physical inventory in 2015 and
has not entered any acquisitions since February 2019 into the asset management
module. The department should implement an internal control structure for asset
management that is capable of meeting statutory requirements of accountability and
reliable reporting. (Recommendation 6.)
STATE OF CONNECTICUT
AUDITORS OF PUBLIC ACCOUNTS
State Capitol
JOHN C. GERAGOSIAN
210 Capitol Avenue
CLARK J. CHAPIN
Hartford, Connecticut 06106-1559
March 9, 2022
1
Department of Labor 2019 and 2020
AUDITORS’ REPORT
DEPARTMENT OF LABOR
FISCAL YEARS ENDED JUNE 30, 2019 AND 2020
We have audited certain operations of the Department of Labor in fulfillment of our duties
under Section 2-90 of the Connecticut General Statutes. The scope of our audit included, but was
not necessarily limited to, the fiscal years ended June 30, 2019 and 2020. The objectives of our
audit were to:
1. Evaluate the department’s internal controls over significant management and financial
functions;
2. Evaluate the department's compliance with policies and procedures internal to the
department or promulgated by other state agencies, as well as certain legal provisions; and
3. Evaluate the effectiveness, economy, and efficiency of certain management practices and
operations, including certain financial transactions.
Our methodology included reviewing written policies and procedures, financial records,
minutes of meetings, and other pertinent documents; interviewing various personnel of the
department, and testing selected transactions. Our testing was not designed to project to a
population unless specifically stated. We obtained an understanding of internal controls that we
deemed significant within the context of the audit objectives and assessed whether such controls
have been properly designed and placed in operation. We tested certain of those controls to obtain
evidence regarding the effectiveness of their design and operation. We also obtained an
understanding of legal provisions that are significant within the context of the audit objectives, and
we assessed the risk that illegal acts, including fraud, and violations of contracts, grant agreements,
or other legal provisions could occur. Based on that risk assessment, we designed and performed
procedures to provide reasonable assurance of detecting instances of noncompliance significant to
those provisions.
We conducted this performance audit in accordance with generally accepted government
auditing standards. Those standards require that we plan and perform the audit to obtain sufficient,
appropriate evidence to provide a reasonable basis for our findings and conclusions based on our
audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objectives.
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Department of Labor 2019 and 2020
The accompanying Résumé of Operations is presented for informational purposes. This
information was obtained from various available sources including, but not limited to, the
department's management and the state’s information systems, and was not subjected to the
procedures applied in our audit of the department. For the areas audited, we:
1. Identified deficiencies in internal controls;
2. Identified apparent non-compliance with laws, regulations, contracts and grant agreements,
policies, and procedures; and
3. Identified a need for improvement in management practices and procedures that we
deemed to be reportable.
The State Auditors’ Findings and Recommendations section of this report presents findings
arising from our audit of the Department of Labor.
COMMENTS
FOREWORD
The Department of Labor (DOL) is authorized in Title 31 of the General Statutes within
Chapters 556, 556a, 557, 558, 559, 560, 561, 562, 563a, 564, 565, 566a, 567, 571, 572, and 573.
The department’s major function is to serve the unemployed by helping them find suitable
employment and providing monetary benefits that are dependent upon the claimant’s employment
and wage history. The department also administers certain state and federal training and skill
development programs, regulation and enforcement of working conditions, enforcement of
minimum and other wage standards, enforcement of labor relations acts, mediation and arbitration
services, and maintenance of labor statistics. During the audited period, the department carried out
its field operations from 20 job centers. The department is responsible for the following:
•
Unemployment Insurance – Provides monetary benefits to the unemployed that are
dependent upon the claimant’s employment and wage history as provided in the Federal
Unemployment Tax Act and Titles III, IX and XII of the Social Security Act. The benefits
are financed by employer contributions collected by the department.
•
Workforce Innovation and Opportunity Act (WIOA) – Advocates One-Stop Career
Centers to provide universal access to effective employment and training programs. The
department has a partnership and a broad administrative role in implementing this service
delivery system.
•
Jobs First Employment Services (JFES) – Provides employment services such as job
search assistance and skills training to participants who receive Temporary Family
Assistance (TFA). The JFES program helps parents gain the skills needed to obtain
meaningful employment and become independent of cash assistance. The Department of
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Department of Labor 2019 and 2020
Labor administers the program in partnership with the Department of Social Services and
five workforce development boards. Participants may also qualify for further on-the-job
and occupational skills training, adult basic education, General Educational Development
preparation, and English as a second language.
•
Office of Workforce Competitiveness (OWC) – The department, with the assistance of
its OWC, serves as the Governor’s principal workforce development policy advisor with
the goal of ensuring that Connecticut has the essential talent to support growth. OWC
collaborates with multiple partners to develop employment and training strategies and
initiatives to support Connecticut’s position in the knowledge economy.
•
Wage and Workplace Standards Division – The division enforces a number of state
statutes and administers a wide range of workplace laws, including minimum wage,
overtime, wage payment, prevailing wage, standard wage, employment of minors, and
misclassification of workers as independent contractors.
The Department of Labor is administered by a commissioner appointed by the Governor under
Sections 4-5 to 4-8 of the General Statutes. Kurt Westby was appointed commissioner on June 22,
2018 and served in that capacity until July 1, 2021. Danté Bartolomeo was appointed as successor
on July 2, 2021 and continues to serve in that capacity.
Significant Legislation
• Public Act 19-4 (Sections 1 and 2), effective upon passage, increased the state’s minimum
hourly wage. Current wage law provides a ‘tip credit’ to employers of hotel and restaurant
staff, and bartenders who customarily receive tips. The credit allows employers to count
their tips toward their employer’s minimum wage requirement. The act freezes the
employer’s share of minimum wage for hotel and restaurant staff, and bartenders by
requiring the labor commissioner to recognize a tip credit that equals the difference
between the applicable minimum wage and the employer’s share. As the minimum wage
increases under the act, the value of the tip credit will correspondingly increase to make up
the difference between the employer’s share and new minimum wage.
• Public Act 19-25 (Sections 1 to 26), effective upon passage, created a Family and Medical
Leave Insurance (FMLI) program that provides wage replacement benefits to certain
employees taking leave for reasons allowed under the current Family and Medical Leave
Act (FMLA), which this act also amended. The act provides eligible employees with up to
12 weeks of FMLI benefits over a 12-month period. The program also provides two
additional weeks of benefits for a serious health condition that results in incapacitation
during pregnancy. The program applies to employers with one or more employees.
• Public Act 19-117 (Sections 149 and 151), effective upon passage, made necessary
changes to Connecticut’s unemployment insurance statutes so that the Department of
Labor’s unemployment insurance modernization consortium for technology development
could move forward for an estimated May 2021 implementation date. Due to the pandemic,
this was rescheduled for July 2022. Specifically, the changes required the quarters in an
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Department of Labor 2019 and 2020
unemployment claimant’s special base period to be consecutive, limited the benefit
eligibility penalty to claims deemed payable before October 1, 2019, and explicitly allowed
the Department of Labor to enter into a consortium with other states.
• Public Act 19-129 (Sections 1 to 4), effective July 1, 2019, required the southwest region’s
workforce development board to develop and operate two pilot programs within the
region, the Military to Machinists pilot program for veterans, and the Veterans Platform to
Employment pilot program by October 1, 2019.
Councils, Boards, and Commissions
The General Statutes related to the Department of Labor provide for the following councils,
boards, and commissions to operate:
Name
Responsibility
State Apprenticeship
Council
Advises and guides the commissioner in formulating work training
standards and developing apprenticeship training programs.
Workforce Training
Authority
Responsible for establishing an application and approval process
with guidelines and terms for the development and implementation
of training programs awarded by the Workforce Training
Authority Fund to any eligible recipient.
State Board of Mediation
and Arbitration
Provides mediation and arbitration to employers and employee
organizations.
State Board of Labor
Relations
Investigates complaints of unfair labor practices by employers
affecting the rights of employees to organize and bargain
collectively.
Employment Security
Board of Review
The Employment Security Appeals Division is an independent
quasi-judicial agency within DOL that hears and rules on appeals
from the granting or denial of unemployment compensation
benefits. The division consists of the Referee Section and the
Employment Security Board of Review.
Occupational Safety and
Health Review
Commission
Hears and rules on appeals from citations, notifications, and
assessment of penalties under the Occupational Safety and Health
Act in Chapter 571 of the General Statutes.
Employment Security
Advisory Board
Advises the commissioner on matters concerning Employment
Security Division policy and operations. No regulations
concerning the division are adopted without consulting the
advisory board.
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Department of Labor 2019 and 2020
Connecticut Employment
and Training Commission
(CETC)/Governor’s
Workforce Council
The Connecticut State Workforce Development Board is
authorized under the federal Workforce Innovation and
Opportunity Act and state statute. CETC provides workforce-
related policy and planning guidance to the Governor and General
Assembly and promotes coordination of the state’s workforce-
related investments, strategies, and programs. Appointed by the
Governor, its members represent Connecticut businesses,
employers, key state agencies, regional/local entities, organized
labor, community-based organizations, and other stakeholders.
The Office of Workforce Competitiveness (OWC) provides
staffing, leadership, support, and technical assistance to CETC. By
Executive Order No. 4 issued on October 19, 2019, Governor
Lamont indicated that the CETC shall also be known as the
Governor’s Workforce Council. The Council, through its chair, is
to serve as the principal advisor to the Governor on workforce
development issues, and coordinate the efforts of all state agencies
and other entities in promoting workforce development throughout
the state.
Joint Enforcement
Commission on
Workforce
Misclassification
Reviews employee misclassification, a technique employers use to
avoid obligations under state and federal labor, employment,
workers’ compensation, and tax laws. It also coordinates the civil
prosecution of violations of state and federal employee
misclassification laws and reports any suspected violations of state
criminal statutes to the Chief State’s Attorney.
RÉSUMÉ OF OPERATIONS
The department’s operations which were accounted for in the General Fund, several special
revenue funds, and two fiduciary funds, are discussed below.
General Fund
General Fund Receipts
General Fund receipts during the audited period and the preceding fiscal year follow:
Fiscal Year Ended June 30,
2018
2019
2020
Federal Contributions
$37,285,780
$32,262,060
$42,187,435
Recoveries of Expenditures
198,647
1,387,830
(734,350)
Fees and Fines
669,090
777,333
581,451
Refunds of Expenditures
981,080
277,257
538,036
Miscellaneous
1,613
2,450
1,000
Total Receipts
$39,136,210
$34,706,930
$42,573,572
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Department of Labor 2019 and 2020
The fluctuation in receipts between periods was mostly attributed to federal contributions for
the Workforce Innovation and Opportunity Act Program.
General Fund Expenditures
General Fund expenditures during the audited period and the preceding fiscal year follow:
Fiscal Year Ended June 30,
2018
2019
2020
Personal Services and Employee Benefits
$18,836,447
$22,087,155
$19,165,685
Employee Expenses, Allowances, Fees
96,183
182,786
142,730
Contractual Services
2,457,764
3,454,069
3,398,201
Commodities
174,059
193,200
243,300
Other
4,790
(4,050,449)
(3,772,883)
Grants
40,487,640
47,261,231
45,746,795
Capital Outlays
9,149
8,984
2,308
Total Expenditures
$62,066,032
$69,136,976
$64,926,136
The fluctuation in expenditures was primarily attributed to personal services, employee
benefits, and grants to non-state agencies.
Special Revenue Funds
The purposes of the major special revenue funds are discussed below:
• Employment Security Administration Fund – Operates under Sections 31-259(a)
through (c) of the General Statutes and consists of monies appropriated by the state,
funding received from the federal government or any agency thereof, and from any
other source, for the purpose of defraying the administrative costs of the Employment
Security Division. According to Section 31-237(a) of the General Statutes, the
“Employment Security Division shall be responsible for matters relating to
unemployment compensation and the Connecticut State Employment Service and shall
establish and maintain free public employment bureaus.”
• Unemployment Compensation Advance Fund – Established under Section 31-
264a(b) of the General Statutes. Fund receipts include employer special bond
assessments for debt service. The Office of the State Treasurer issued up to
$1,000,000,000 in state revenue bonds to repay benefit funds borrowed from the federal
government. This action avoided federal interest charges and provided advances for
benefit payments until revenue from employer taxes was sufficient to support benefit
payouts.
• Employment Security Special Administration Fund – Authorized by Section 31-
259(d) of the General Statutes to receive all penalty and interest on past due employer
contributions. Resources in the fund are used to pay administrative costs, reimburse the
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Department of Labor 2019 and 2020
Employment Security Administration Fund when the appropriations made available to
the Employment Security Administration Fund are insufficient to meet the expenses of
that fund, and any other purpose authorized by law. Subsection (d) also states that, on
July 1st of any calendar year, the assets in the Employment Security Special
Administration Fund that exceed $500,000 are to be appropriated to the Unemployment
Compensation Fund. During the fiscal years ended June 30, 2019 and 2020, DOL
transferred $4,400,000 and $0, respectively, to the Employment Security
Administration Fund to offset projected deficits of federal administrative funds.
• Grants and Restricted Accounts Fund – Accounts for certain federal and other
revenues that are restricted from general use.
• Individual Development Account Reserve Fund – Authorized by Section 31-51aaa
of the General Statutes to provide grants to community-based organizations. These
organizations operate certified state programs that provide matching funds for the
individual development accounts in their programs, to assist the organizations in
providing training, counseling, and case management for program participants and
program administration purposes.
Schedules of receipts and expenditures for the special revenue funds during the audited period,
together with those of the preceding fiscal year, are presented below:
Fiscal Year Ended June 30,
2018
2019
2020
Employment Security Administration Fund
$77,136,890
$69,130,685
$72,575,756
Grants and Restricted Accounts Fund
8,918,672
9,543,878
4,922,635
Employment Security Special
Administration Fund
4,611,328
4,410,695
5,198,617
Special Assessment Unemployment
Compensation Advance Fund
21,739
1,809
1,713
Banking Fund
3,993
42,195
4,492
Workers’ Compensation Fund
1,021
10,768
-
Total Receipts
$90,693,643
$83,140,030
$82,703,213
The decreases were primarily because of a reduction of receipts in the Employment Security
Administration Fund and Grants in fiscal year 2018-2019 and a reduction in Restricted Accounts
Fund receipts in fiscal year 2019-2020.
Receipts for the Employment Security Administration Fund are used to defray the
administrative costs of the department’s Employment Security Division and vary, depending on
the number and amount of federal grants received during the year.
Special revenue fund expenditures during the audited period and the preceding fiscal year follow:
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Department of Labor 2019 and 2020
Personal services and employee benefits activity within the Employment Security
Administration Fund was primarily responsible for the fluctuation in total expenditures for fiscal
years 2018-2019 and 2019-2020, respectively.
Special revenue fund expenditures by category during the audited period and the preceding
fiscal year follow:
Fiscal Year Ended June 30,
2018
2019
2020
Personal Services and Employee Benefits
$63,155,265
$54,923,246
$60,239,222
Employee Expenses, Allowances, Fees
246,667
201,030
209,002
Contractual Services
11,034,498
7,753,065
8,720,614
Commodities
180,900
162,578
228,109
Indirect Overhead – Federal and Other
-
9,041,165
9,859,850
Grants
12,769,341
13,269,428
11,425,174
Capital Outlay
143,892
345,412
632,304
Other
13,253
72,269
-
Total Expenditures
$87,543,816
$85,768,193
$91,314,275
The decreases in expenditures for personal services and employee benefits were primarily due
to employee retirements in 2018. However, the increases in fiscal year 2019-2020 were due to
hiring and a significant increase in overtime to address the influx in unemployment compensation
claims due to the pandemic.
Fiduciary Funds
The department operated two fiduciary funds and a wage restitution account during the audited
period as discussed below.
Fiscal Year Ended June 30,
2018
2019
2020
Employment Security Administration Fund
$73,413,051
$67,076,638
$78,940,298
Grants and Restricted Accounts Fund
6,889,429
8,209,430
8,009,820
Employment
Security
Special
Administration Fund
4,600,000
4,400,000
-
Small Town Economic Assistance Program –
Grants to Local Government
506,410
3,580,327
570,364
Banking Fund
1,425,000
1,425,000
1,314,355
Individual Development Account Reserve
Fund
31,351
30,026
313,112
Workers’ Compensation Fund
658,368
642,515
673,015
Capital Equipment Purchase Fund
20,207
381,325
768,053
Economic Assistance Bond Fund
-
22,932
725,258
Total Expenditures
$87,543,816
$85,768,193
$91,314,275
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Department of Labor 2019 and 2020
Unemployment Compensation Fund
Section 31-261 of the General Statutes authorizes the Unemployment Compensation Fund to
be used for the receipt of employer contributions and the collection of benefits for state and
municipal government workers, and nonprofit organizations. Section 31-263 of the General
Statutes authorizes the Unemployment Compensation Benefit Fund to be used for the payment of
unemployment benefits.
In accordance with the provisions of Section 31-262 and 31-263 of the General Statutes, the
State Treasurer deposits all contributions, less refunds and other appropriate receipts of the
Unemployment Compensation Fund, in the Unemployment Trust Fund of the U.S. Treasury.
Requisitions from the Unemployment Trust Fund are made on the advice of the administrator
(Department of Labor commissioner) for the payment of estimated unemployment compensation
benefits. The resources of the Unemployment Trust Fund are invested by the Secretary of the U.S.
Treasury for the benefit of the various state accounts which constitute the fund.
Unemployment Compensation Fund receipts during the audited period and the preceding fiscal
year follow:
Fiscal Year Ended June 30,
2018
2019
2020
Employer Tax Contributions
$711,800,738
$703,239,273
$ 688,431,105
Reimbursement
from
the
State,
Municipalities and Nonprofits
46,596,635
37,760,446
35,215,030
Reimbursement from Other States
14,785,298
13,815,441
10,699,908
Reimbursements from the Federal Employee
Contribution Account
4,083,792
3,571,728
3,742,697
Federal Contributions
12,501,408
8,614,605
2,521,141,989
Emergency US Relief 50 Reimb Distribution
to UC Trust Fund
-
-
14,627,400
EUISSA Grant Funds Distribution to UC
Trust Fund
-
-
11,908,187
Federal Trust Fund Interest Income
10,515,378
13,984,886
15,276,671
Income Derived from Claimant Fraud
Penalty
1,189,229
900,033
964,444
Total Receipts
$801,472,478
$781,886,412
$3,302,007,431
Total receipts decreased by $19,586,066 in fiscal year 2018-2019 and significantly increased
by $2,520,121,019 in fiscal year 2019-2020. Federal contributions increased by $2,512,527,384 in
fiscal year 2019-2020 due to the Coronavirus Aid, Relief, and Economic Security Act (CARES
Act) program funding.
Reimbursements from the state, municipalities, and non-profits decreased in both audited fiscal
years. These entities do not make employer tax contributions, but are billed when a former
employee begins collecting unemployment compensation.
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Department of Labor 2019 and 2020
Total employer tax contributions decreased by $8,561,465 and $14,808,168 in fiscal years
2018-2019 and 2019-2020, respectively. The unemployment rate has steadily decreased, resulting
in a drop in unemployment claims.
Calendar Year
Fund Solvency Rate
New Employer Rate
Range of Tax Rates
2020
1.4%
3.2%
1.9% to 6.8%
2019
1.4%
3.4%
1.9% to 6.8%
2018
1.4%
3.6%
1.9% to 6.8%
2017
1.4%
3.9%
1.9% to 6.8%
The Unemployment Trust Fund balance at June 30, 2018, 2019, and 2020 was $576,873,522,
$737,429,548, and $206,489,338, respectively.
A summary of disbursements from the Unemployment Compensation Fund during the audited
period, along with those of the preceding fiscal year, follows:
Fiscal Year Ended June 30,
2018
2019
2020
Benefits Paid with Employer Contributions,
Federal Loans and Federal Reed Funds
$628,813,284
$554,537,010
$1,236,209,761
Benefits Paid for the State, Municipalities
and Nonprofits
45,611,977
38,412,134
111,984,502
Benefits Paid for Other States
14,725,729
14,178,400
22,279,618
Benefits Paid from Federal Employee
Contribution Account
4,064,390
3,567,774
4,155,688
Benefits Paid with Federal Contributions
11,687,784
8,584,390
2,335,378,828
Reed Act Fund Transfer
3,903,872
-
-
Short Time Compensation (STC) Grant
Funding Transfer
Other
242,490
108,020
186,564
97,049
92,145
115,694
Total Disbursements
$709,157,546
$619,563,321
$3,710,216,236
Total disbursements decreased by $89,594,225 in fiscal year 2018-2019 due to a reduction in
unemployment insurance claims. The Covid-19 pandemic during the fourth quarter of fiscal year
2019-2020 resulted in an unprecedented increase of $3,090,652,915 in unemployment insurance
claims.
Funds Awaiting Distribution Fund and Wage Restitution Account
Fund collections totaled $10,430,932 and disbursements and transfers totaled $10,083,167
during the audited period. Of these amounts, collections for the Wage Restitution Account totaled
$3,710,586, and disbursements and transfers totaled $3,365,406.
Section 31-68 of the General Statutes authorizes the commissioner to take assignment of wage
claims in trust for workers who are paid less than the minimum fair wage or overtime wage by
employers. Wages collected by the commissioner are paid to the claimants. Activity of the Wage
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Department of Labor 2019 and 2020
Restitution Account was recorded in a separate account within the Funds Awaiting Distribution
Fund.
In the event the whereabouts of an employee is unknown after the issue is resolved, the
commissioner is empowered to hold the wages for three months and later pay the next of kin in
accordance with statutory procedures. Any unclaimed wages held by the commissioner for two
years shall escheat to the state subject to the provisions of Title 3, Chapter 32, Part III of the
General Statutes.
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Department of Labor 2019 and 2020
STATE AUDITORS’ FINDINGS AND RECOMMENDATIONS
Our examination of the records of the Department of Labor disclosed the following seven
recommendations, of which seven have been repeated from the previous audit including two of the
prior recommendations that were restated within one current recommendation:
Leave Time Usage and Accountability Issues
Criteria:
The NP-2 collective bargaining agreement states that employees are
encouraged to use vacation credits in full days but may use them in
minimum units of one-half (½) hour.
The NP-3 collective bargaining agreement states that employees are
encouraged to use vacation credits in full days but may use them in
minimum units of one (1) hour.
The Department of Labor Time Reporting Procedure Manual states that
supervisors should check timesheets for accuracy and completeness.
The Wage and Workplace Standards Division (WWSD) Weekly and
Monthly Report policy requires field supervisors to review their staff’s
weekly and monthly reports to ensure accuracy and consistency within
both reports.
Good business practice dictates that supervisors verify that the time
reported on weekly activity reports agrees with self-service time
reported by the employee in Core-CT prior to approving the timesheet.
Condition:
A review of union employee leave time usage during fiscal years 2018-
2019 and 2019-2020 noted that 70% and 61%, respectively, of the
vacation time charged was not in accordance with the minimum
increments identified in collective bargaining agreements.
A review of weekly activity reports noted that three of ten Wage and
Workplace Standards Division employees’ reports did not agree with
time reported in Core-CT. One of ten employees did not complete a
weekly activity report for one period reviewed.
Effect:
Use of leave time in increments less than the mandated minimum is a
violation of the collective bargaining unit contracts.
Reduced accountability of time exists when supervisors do not
consistently reconcile weekly activity reports to timesheet entries.
Cause:
A lack of managerial oversight and effective internal control policies
and procedures contributed to the condition.
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Department of Labor 2019 and 2020
Prior Audit Finding:
This finding has been previously reported, in part, in the last audit report
covering the fiscal years ended June 30, 2017 through 2018.
Recommendation:
The Department of Labor should improve controls over the reporting,
review, and approval of time records to ensure compliance with
collective bargaining unit contracts. (See Recommendation 1.)
Agency Response:
“The Department agrees with this finding. The agency previously took
corrective action to ensure the leave time is recorded in 15 minute
increments. Timesheet policies are periodically reissued and WWSD
will reissue guidance on weekly activity reports. The Department will
revise its timesheet policy to account for the minimum units identified
in the NP-2 and NP-3 agreements.”
Inadequate Controls over Cash Receipts
Criteria:
The State Accounting Manual requires each agency to establish internal
controls over cash receipts to minimize the risk of loss. An individual
responsible for receiving cash should record the receipt date, remitter
name, receipt amount, receipt type, and the purpose of the remittance in
a journal. All receipts must be logged into a receipts journal or
equivalent tracking record.
Section 4-32 of the General Statutes generally requires that receipts be
deposited and accounted for within 24 hours.
Adequate internal controls over receivables and revenues require
segregation of duties. Different employees should be responsible for the
collecting, recording, and depositing of funds.
Condition:
DOL did not promptly deposit or account for receipts of the Benefit
Payment Control Unit (BPCU) and the Occupational Safety and Health
Unit (OSHA) in accordance with Section 4-32 of the General Statutes.
Our review of 25 BPCU cash receipts revealed that six were deposited
between one and three days late. Our review of ten OSHA receipts noted
that four, totaling $4,181, were deposited one day late. We also found
that seven receipts, totaling $24,383, were not promptly accounted for
in Core-CT.
The same BPCU employee received and deposited 53 of 1,281 (4%)
cash receipts transactions.
Context:
BPCU deposited $1,299,178 in receipts during fiscal year 2019-2020.
OSHA deposited $118,565 in receipts during fiscal years 2018-2019
and 2019-2020.
Auditors of Public Accounts
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Department of Labor 2019 and 2020
Effect:
Receipts that are not deposited on time are subject to potential loss and
the agency or employee responsible for untimely deposits is not
complying with laws and regulations.
There is an increased risk of loss due to error or fraud if key duties are
not segregated.
Cause:
Diminished staffing levels and the implementation of new procedures
utilizing the CashPro scanner may have been contributing factors.
Prior Audit Finding:
This finding has been previously reported in the last four audit reports
covering the fiscal years ended June 30, 2011 through 2018.
Recommendation:
The Department of Labor should ensure proper segregation of duties
over the collection, recording, and depositing of revenues, and ensure
that receipts are promptly deposited and accounted for in accordance
with Section 4-32 of the General Statutes. (See Recommendation 2.)
Agency Response:
“The agency agrees with this finding and is continuing to review and
improve its policies and procedures for cash receipts. This issue has
been recently complicated by the Covid-19 pandemic due to the sudden
implementation of telework. The Department continues to develop its
cash handling policies and procedures as the state workforce moves to
a mix of in office and telework. The Department will be deploying
additional check scanners in several DOL units and has issued guidance
regarding the keeping of proper check logs.”
Lack of Administrative Oversight for Boards
Background:
The General Statutes related to the Department of Labor include four
boards, two commissions, two councils, and an authority, which we
collectively refer to as boards. These include the Board of Mediation
and Arbitration, Board of Labor Relations, Employment Security Board
of Review, Employment Security Division Advisory Board,
Occupational Safety and Health Review Commission, Joint
Enforcement Commission on Employee Misclassification, Governor’s
Workforce Council, and the State Apprenticeship Council.
Criteria:
Section 1-225 of the General Statutes requires public agencies to: (1)
post meeting minutes to its website no later than seven days after such
meeting; (2) file a schedule of regular meetings for the ensuing year with
the Secretary of the State no later than January 31st of each year, and to
post such schedule on the agency’s website; and (3) file the agenda of
such meeting with the Secretary of the State no less than 24 hours before
a meeting, and post such agenda on the agency’s website.
Auditors of Public Accounts
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Department of Labor 2019 and 2020
Statutory references for appointments to the various boards follow:
Board
Section
State Apprenticeship Council
31-22n
Joint Enforcement Commission on Employee Misclassification
31-57h
Board of Labor Relations
31-102
Employment Security Division Advisory Board
31-250a
Occupational Safety and Health Review Commission
31-376
Section 31-96 of the General Statutes provides that the Labor
Commissioner, with the advice and approval of the Board of Mediation
and Arbitration, shall appoint at least five mediators to act for it in
making investigations and adjusting labor disputes.
Condition:
Our review of the boards for the fiscal years ended June 30, 2019 and 2020
revealed the following:
• The Connecticut State Apprenticeship Council had one vacancy
since November 2019.
• The Board of Labor Relations has a permanent member and four
alternate board members with expired terms. The board also did not
file a meeting schedule with the Secretary of the State for the 2020
calendar year and did not post meeting agendas on its website.
• The Occupational Safety and Health Review Commission had one
vacancy since 2008.
• The Employment Security Division Advisory Board had one
vacancy since March 2019. In addition, the board did not post
meeting agendas on its website and did not file them with the
Secretary of the State. The board also did not post meeting minutes
to its website after January 2019, until our auditors notified the
board.
• The Board of Mediation and Arbitration did not file its meeting
agendas with the Secretary of the State and did not leave agendas on
the agency’s website after the meetings took place.
• The Joint Enforcement Commission on Employee Misclassification
did not meet during the audited period.
• Only two of five mediators required by Section 31-96 were
appointed during the audited period.
Auditors of Public Accounts
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Department of Labor 2019 and 2020
Effect:
Certain boards did not provide public notice for their respective
meetings, minutes, or agendas. They did not operate in compliance with
applicable legislation regarding appointments, membership, and
meetings.
Cause:
A lack of administrative oversight contributed to this condition. DOL
did not effectively work with boards.
Prior Audit Finding:
This finding has been previously reported in the last five audit reports
covering the fiscal years ended June 30, 2009 through 2018.
Recommendation:
The Department of Labor should work with its related boards to ensure
compliance with applicable legislation. If the department determines
that any statutory requirement is impractical or outdated, it should
request a legislative change. (See Recommendation 3.)
Agency Response:
“The Department does not agree with the specific finding concerning
the Joint Enforcement Commission on Employee Misclassification. As
stated in several previous audits, the agency is not responsible for and
has no oversight over this entity. When an agency has responsibility for
a Board or Commission, the statute specifically mentions that agency.
These statutes do not indicate that DOL is responsible for the Board or
the Commission. Therefore, the finding concerning this entity should
be removed from the audit.
Every Board has been made aware of the requirements for filing the
meeting dates, agendas, and minutes. Currently, each Board for which
we are responsible has received direction and each will follow the
proper protocol.”
Auditors’ Concluding
Comment:
The department should consider requesting legislative clarification to
Section 31-57h of the General Statutes regarding its responsibilities
related to the Joint Enforcement Commission on Employee
Misclassification. The commission is dedicated to reviewing employee
misclassification by employers to avoid their obligations under state and
federal labor, employment, and tax laws. Since employee
misclassification is a labor issue and complaints from the public
regarding employee misclassification are received by the department’s
Wage and Workplace Standards Division, it appears that DOL should
have a vested interest in ensuring that this entity remains active.
Auditors of Public Accounts
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Department of Labor 2019 and 2020
Improper Utilization of State Fleet Vehicles
Criteria:
The Department of Administrative Services’ (DAS) General Letter 115
states:
• Agencies are responsible for ensuring that their state-owned
vehicles are used in the most cost-effective and efficient manner
possible.
• Agencies must obtain approval from the Director of DAS Fleet
Operations to allow employees to continuously garage a state-
owned vehicle at their home.
• Overnight parking of a state-owned vehicle at an employee’s home
for more than one night per month may be classified as a fringe
benefit taxable income pursuant to Federal Public Law 99-44.
The Office of the State Comptroller’s Memorandum No. 2020-08 requires
state agencies to calculate and report taxable fringe benefits when a state
employee commutes in or uses a state vehicle for personal use.
Condition:
Our review of state vehicle usage noted the following:
• Occupational Safety and Health Unit (OSHA) employees did not
accurately prepare monthly motor vehicle usage reports because
they did not separate official state business miles from non-business
home-to-office and special commuting miles. Non-business and
special commuting miles are considered taxable fringe benefits.
• DOL did not obtain approval from the Director of DAS Fleet
Operations for two employees to garage state-owned vehicles at
home.
• DOL does not calculate or report taxable fringe benefits for
employees who regularly park their state-owned vehicles at home.
Effect:
There is reduced assurance that the department efficiently and
effectively administers the use of state vehicles.
Taxable fringe benefits may not be reported to the Internal Revenue
Service.
Cause:
A lack of administrative oversight contributed to this condition.
Prior Audit Finding:
This finding has been previously reported in the last three audit reports
covering the fiscal years ended June 30, 2013 through 2018.
Auditors of Public Accounts
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Department of Labor 2019 and 2020
Recommendation:
The Department of Labor should comply with DAS General Letter 115
– Use of State-Owned Motor Vehicles and develop procedures to
accurately calculate and report the taxable fringe benefits for
commuting or personal use of a state vehicle. (See Recommendation 4.)
Agency Response:
“The Department agrees with the finding that the Department did not
obtain approval from the Director of DAS Fleet Operations for two
employees to garage state-owned vehicles at their home. A review was
conducted on the two missing approvals and it was determined that there
was either a clerical or technical oversight. DOL recently requested
approval for all garaged state-owned vehicles and will enhance its
record keeping process to ensure compliance with DAS General Letter
115.
Regarding the monthly motor vehicle usage reports and taxable fringe
benefits, DOL’s OSHA employees do not use their state vehicles for
non-business or any special commuting. The Department requires
OSHA staff to utilize state vehicles due to the equipment needed for
their duties. This requirement is in place because employees may be
required to respond to emergencies outside of normal duty hours
(accidents, fatalities, disasters). Because of this mandate and the
business only utilization, the Department historically did not calculate
taxable fringe benefits because DAS General Letter 115 states overnight
parking “may be” considered a fringe benefit. Additionally, while
OSHA staff qualify for a $200 garaging fee per their A&R contract, it
has been determined that OSHA staff have not consistently received the
garaging allowance. The Department will be working with the Office of
State Comptroller to review the commuting, vehicle usage reports and
taxable fringe benefit policies of the Department.”
Ineffective Management of Employer Workplace Violation Case Files and Handling of
Receipts
Background:
The Department of Labor assesses civil penalties on employers who
violate prevailing and minimum wage standards. Although wage
enforcement cases constitute a larger portion of the division’s
investigations, the department informed us that it does not assess civil
penalties on employers who violate wage enforcement standards unless
they are a repeat offender. This practice is based on the premise that, in
many wage enforcement cases, the civil penalty is greater than the
wages due, and imposing civil penalties would detract from the
department’s primary purpose of collecting unpaid wages.
Criteria:
The State Accounting Manual requires each agency to establish internal
controls over cash receipts to minimize the risk of loss. All receipts must
be logged into a receipts journal or equivalent tracking record.
Auditors of Public Accounts
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Department of Labor 2019 and 2020
Section 4-32 of the General Statutes generally requires state agencies to
account for and deposit receipts within 24 hours.
Proper internal controls dictate that formal written policies and
procedures should be established and disseminated to provide guidance
to employees in the performance of their duties.
Wage and Workplace Standards Division (WWSD) employees are
authorized to accept in-person civil penalty and wage payments from
employers under only special conditions with the director’s written
authorization.
Condition:
During the review of case files and the handling of deposits, we noted
the following:
• The division lacks sufficient controls to ensure that it properly
documents all complaints in the eWage system.
• WWSD does not maintain a cash receipts log. All checks are
entered directly into the applicable case files within the eWage
system.
• The division does not have a formal process to document
compliance
with
its
own
directive
requiring
written
authorization for checks to be picked up (or received at a satellite
office) rather than submitted directly to the WWSD central
office.
• The division does not maintain a log to track courier pick-ups or
deliveries. We identified four instances in which checks sent to
the Central Office via the Department of Administrative
Services (DAS) courier were documented as received by the
central office between three and eight days after their initial
receipt.
• There is no reconciliation process between WWSD and the
fiscal unit to ensure that all receipts are deposited.
• eWage Civil Penalty reports do not agree with Core-CT Civil
Penalty revenue reports.
• DOL did not promptly account for and deposit seven of 67
receipts in accordance with Section 4-32 of the General Statutes.
Auditors of Public Accounts
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Department of Labor 2019 and 2020
Context:
An instance was identified in which a serious allegation, involving child
labor, was not entered into the eWage system. The complaint was
received by the director and assigned to a field agent. Neither entered
the case or any related information into the eWage system.
Core-CT Civil Penalty revenue reports exceeded eWage Civil Penalty
reports by $51,930 for fiscal year 2019-2020.
Civil penalty deposits totaled $1,337,540 and $1,185,442 during fiscal
years 2018-2019 and 2019-2020, respectively.
Effect:
Without adequate documentation and oversight, complaints may be
received but never investigated.
There is an increased risk that checks may be received but never
documented and/or deposited.
Late deposits deprive the state of timely revenue.
Cause:
There is a lack of effective controls over the receipt and entry of
complaints into the eWage system.
Employer checks received in the field may not be promptly processed
and deposited.
Prior Audit Finding:
This finding has been previously reported in part, in the last six audit
reports covering the fiscal years ended June 30, 2007 through 2018.
Recommendation:
The Department of Labor should develop and implement internal
controls to ensure that all complaints are properly documented within
the eWage system. The department should develop policies and
procedures to properly safeguard receipts, and ensure compliance with
accounting and deposit requirements in Section 4-32 of the General
Statutes and the State Accounting Manual. (See Recommendation 5.)
Agency Response:
“The agency disagrees with the characterization that there was
ineffective management or inadequate oversight associated with
employer workplace violation case files, specifically as it relates to the
aforementioned child labor complaint. Although the clerical data entry
was delayed, the allegations were investigated thoroughly and
immediately on the same day that the information was provided to the
Wage and Workplace Standards Division.
Regarding controls within the E-Wage system, the agency disagrees
with this finding as well. There is an operational guidebook and training
manual that provides the framework for accessing, managing and
Auditors of Public Accounts
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Department of Labor 2019 and 2020
utilizing the E-Wage system. Supervisory staff review submitted claims
and assign them to investigative personnel based on a variety of factors,
including type, nature, caseload, and geographic location. Supervisory
staff are prompted with updates on case progression and are cued
through features in the system that require documented approval for
certain decisions. Supervisory staff are authorized and required to
review cases submitted for closure and generate final case reports which
is the last step in the investigative process. The division will add a
procedure to the policy for the entry of the miniscule number of
complaints that are submitted in paper form and electronic mail.”
Auditors’ Concluding
Comment:
Our office inquired about the child labor complaint approximately eight
months after the department formally received it and although it was
investigated and closed, it still was not recorded on the eWage system.
Inadequate Controls over Equipment Inventory and CO-59 Reporting
Criteria:
Section 4-36 of the General Statutes requires a property inventory to be
kept in the form prescribed by the State Comptroller. The State Property
Control Manual specifies requirements and standards for state agency
property control systems, including maintaining a software inventory to
track and control all agency software media, as well as tagging,
recording, and maintaining capital assets and controllable property on
the Core-CT Asset Management module.
Condition:
The department’s asset inventory as recorded in Core-CT is incomplete
and obsolete in several respects, and is an unreliable record for
management accountability and reporting. Specifically:
• The Core-CT inventory record does not include physical inventory
results after June 2015. Although management informed us that it
performed subsequent inventory in 2019, it did not successfully
upload results to the Core-CT Asset Management module.
• Core-CT data did not report acquisitions after February 2019, and
management acknowledged that there is a backlog in updating the
system for recent acquisitions and removals from service.
• We determined that 2,068 (70%) of the 2,235 information
technology items recorded in Core-CT are likely past their expected
operational life, and may have been removed from service or
custody, but not the active inventory record. These items total
$5,634,309 (37%) of the value of all recorded non-real estate assets.
Auditors of Public Accounts
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Department of Labor 2019 and 2020
Context:
We identified 109 items, totaling $1,102,988, that DOL acquired during
the audited period.
The 2,068 information technology items, totaling $5,634,309, are
mostly personal computers placed in service more than five or ten years
ago.
Effect:
A failure to conduct timely physical inventories and promptly record
asset acquisitions, transfers and dispositions impairs management’s
ability to account for equipment, report accurate values, and identify and
report losses as required. As a result, the department’s CO-59 inventory
reports are unreliable.
Cause:
An inadequate segregation of duties is the primary cause of the
conditions.
The Facilities Unit, which was primarily responsible for asset custody
and accountability, experienced staff turnover and reductions
preventing proper segregation of duties, timely performance, and
sufficient training of employees about their new responsibilities.
The impacts of Covid-19 in fiscal year 2019-2020 made a physical
inventory process impractical due to the closing of facilities.
Prior Audit Finding:
This finding combines two findings that have been previously reported
in the last ten audit reports covering the fiscal years ended June 30, 1999
through 2018.
Recommendation:
The Department of Labor should implement an internal control structure
for asset management that is capable of meeting statutory requirements
of accountability and reliable reporting. (See Recommendation 6.)
Agency Response:
“The DOL is in agreement with the finding and noted cause. In concert
with conversations with the State Auditors, CORE, DAS BEST and
partnered DOL Divisions, a comprehensive plan is being developed to
address the recommendations and ensure compliance with requirements
of the Office of the State Comptroller. As part of the plan, DOL is in the
final stages of hiring new staff to fill turnover of relevant staff that
perform the required functions. Staff training through CORE is being
coordinated to ensure that segregated duties are assigned, understood
and performed as required. At the recommendation of the State Auditors
an oversight/segregated duty role utilizing Business Management is
being reviewed as part of DOL’s plan moving forward. Based on the
changes outlined above, the findings related to the asset management
module and information technology items should be resolved.”
Auditors of Public Accounts
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Department of Labor 2019 and 2020
Lack of Effective Oversight over State Regulations
Criteria:
The Regulations of Connecticut State Agencies serve to clarify the
General Statutes.
Condition:
DOL did not develop and adopt state regulations required under
Sections 31-3z, 31-40b, 31-40u, 31-51ii, 31-76a, 31-76l, 31-223b, 31-
362g, and 31-374(f)(2) of the General Statutes.
Context:
The department did not establish required regulations related to nine out
of 35 statutory references.
Effect:
In the absence of state regulations, certain policies and procedures may
not be administered or adhered to as intended.
Cause:
Inadequate administrative oversight over state regulations appears to
contribute to the condition.
Prior Audit Finding:
This finding has not been previously reported.
Recommendation:
The Department of Labor should improve administrative oversight and
pursue adoption of statutorily required regulations or request legislative
changes to repeal unnecessary or outdated regulatory mandates. (See
Recommendation 7.)
Agency Response:
“The Department agrees in part and disagrees in part with this finding.
Section 31-76l calls for the promulgation of regulations on the
exceptions from OT. The agency has complied with this section in part.
Certain regulations concerning the exceptions were promulgated -
specifically those having to do with bona fide executive administrative
and professional capacities.
Certain of the statutes that call for the promulgation of regulations are
obsolete, i.e. Conn. Gen. Stat. 31-40b lung function tests and 31-40u
guidelines for display terminals. Conn. Gen. Stat.31-3z self-
employment program was never instituted and therefore, regulations
were not needed. Another statute that requires regulations is 31-
262g. This statute passed in 1994 and to the best of anyone’s
recollection has never been raised. The Department will seek to repeal
these requirements for regulations, but these statutes have not been
utilized in many, many years. The Department will also seek the repeal
of the regulatory requirement for 31-51ii, meal periods, as well as 31-
223b which calls for the promulgation of regulations concerning SUTA
dumping.
Auditors of Public Accounts
24
Department of Labor 2019 and 2020
31-374(f)(1) and (f)(2) were taken from the OSHA Act when
Connecticut adopted its own state plan. The USDOL/OSHA Field
Operations Manual covers procedures regarding complaint inspections
and the Connecticut Public-Sector Only State Plan had adopted the
USDOL/OSHA procedures which would satisfy the regulatory mandate
prescribed in the sections mentioned. In our legislative package for the
2022 session, we are proposing the repeal of the sections requiring the
adoption of regulations.”
Write Off of Receivables
Background:
Uncollectible amounts may be written off after reasonable collection
efforts have been exhausted. Section 3-7 of the General Statutes
authorizes the department to write off any uncollectible claims of
$1,000 or less with the department head’s authorization. For accounts
receivable greater than $1,000, the department submits a request to the
Assistant Attorney General’s (AAG) office for abatement coding.
Accounts identified to be uncollectible are referred to the Office of the
Attorney General for approval. Upon Attorney General approval, the
Delinquent Account Unit requests that the delinquent account be written
off. The Information Technology (IT) Unit posts the write-offs
annually.
Criteria:
Section 31-266c(a) of the General Statutes provides that the
administrator, upon the advice of the Attorney General, may abate any
receivables due under this chapter that have been found by the
administrator to be uncollectible.
Section 3-7(a) of the General Statutes states that any uncollectible claim
for an amount of $1,000 or less may be cancelled upon the books of any
state department or agency upon the authorization of the head of such
department or agency.
Sound business practice dictates that agencies should periodically
review past due accounts receivables to determine their collectability.
Receivables that management deems uncollectible should be written
off.
Condition:
Aged receivables were not reviewed to assess their collectability.
Receivables that would likely be deemed uncollectible were not written
off for fiscal years 2018-2019 and 2019-2020.
Effect:
The inclusion of uncollectible accounts in the accounts receivable
records misrepresents the true level of accounts receivables and inhibits
their efficient management.
Auditors of Public Accounts
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Department of Labor 2019 and 2020
Cause:
Due to decreased staffing levels, the department focused its efforts on
collecting outstanding debts rather than taking the time to write off
amounts that should have been deemed uncollectible.
Prior Audit Finding:
This finding has been previously reported in the last audit report
covering the fiscal years ended June 30, 2017 through 2018.
Conclusion:
While the Department of Labor complied with Section 31-266c(a) of
the General Statutes, it is also notable that it eventually wrote off $9.4
million in uncollectible accounts on June 30, 2021.
Auditors of Public Accounts
26
Department of Labor 2019 and 2020
RECOMMENDATIONS
Status of Prior Audit Recommendations:
Our prior audit report on the Department of Labor contained 13 recommendations. Six have
been implemented or otherwise resolved and seven have been repeated or restated with
modifications, including two that were combined into one recommendation, during the current
audit.
• The Department of Labor should ensure that it completes annual performance
appraisals for all of its employees. This recommendation has been resolved.
• The Department of Labor should ensure that any payments made related to the SEBAC
vs. Rowland Settlement are not charged to federal funds as stipulated in the Office of
the State Comptroller’s Memorandum No. 2016-13. This recommendation has been
resolved.
• The Department of Labor should provide consistent guidance to its employees to ensure
that leave time is recorded accurately. This recommendation is being repeated. (See
Recommendation 1.)
• The Department of Labor should strengthen internal controls to ensure that contracts
are fully executed prior to their start date. If necessary, the department should delay the
service period start date on these contracts. This recommendation has been resolved.
• The Department of Labor should strengthen internal controls to ensure that it
periodically reviews employer receivables and writes off aged receivables deemed
uncollectible. This recommendation has been resolved.
• The Department of Labor should strengthen internal control procedures to ensure that
it accurately logs all receipts into a journal or equivalent tracking record.
The department should promptly notify the Auditors of Public Accounts and State
Comptroller of any unauthorized, illegal, irregular, or unsafe handling of state funds.
This recommendation is being restated with modifications. (See Recommendation
2.)
• The Department of Labor should ensure that it appropriately designs and implements
internal controls over the custody and reporting of its assets. The department should
take a complete and accurate physical inventory and update any changes in the Core-
CT Asset Management module. This recommendation is being restated with
modifications and combined. (See Recommendation 6.)
Auditors of Public Accounts
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Department of Labor 2019 and 2020
• The Department of Labor should improve internal controls to ensure that property
inventory is maintained in the form prescribed by the Office of the State Comptroller.
The department should review and adequately support its CO-59 reports for accuracy
prior to submission. This recommendation is being restated with modifications and
combined. (See Recommendation 6.)
• The Department of Labor should implement internal control procedures to ensure the
timely submission of mileage reimbursement requests. This recommendation has
been resolved.
• The Department of Labor should formalize its policies for assigning and monitoring
vehicles and reallocate underutilized vehicles for efficiency and cost savings. In
addition, the department should develop procedures to accurately calculate and report
the taxable fringe benefit for commuting or personal use of a state vehicle. This
recommendation is being restated with modifications. (See Recommendation 4.)
• The Department of Labor should institute procedures and establish effective internal
controls to ensure that it submits all required reports. This recommendation has been
resolved.
• The Department of Labor should strengthen employer labor violation internal controls
to ensure consistent investigation and recordkeeping practices. Additionally, the
department should develop internal controls to comply with accounting and deposit
requirements of Section 4-32 of the General Statutes and the Office of the State
Comptroller’s directives.
The Department of Labor should assess civil penalties as prescribed by Section 31-69
of the General Statutes and seek legislative changes to Section 31-57f of the General
Statutes to give it the authority to impose and collect civil penalties. This
recommendation is being restated with modifications. (See Recommendation 5.)
• The Department of Labor should work with its related boards to ensure compliance
with the General Statutes. If the department determines that any statutory requirement
is impractical or outdated, then it should request a legislative change. This
recommendation is being restated with modifications. (See Recommendation 3.)
Auditors of Public Accounts
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Department of Labor 2019 and 2020
Current Audit Recommendations:
1. The Department of Labor should improve controls over the reporting, review, and
approval of time records to ensure compliance with collective bargaining unit
contracts.
Comment:
Vacation leave time was not always charged in accordance with the minimum increments
specified in collective bargaining agreements. Weekly activity reports did not agree with
time reported on Core-CT and one activity report was not completed for the period
reviewed.
2. The Department of Labor should ensure proper segregation of duties over the
collection, recording, and depositing of revenues, and ensure that receipts are
promptly deposited and accounted for in accordance with Section 4-32 of the General
Statutes.
Comment:
DOL did not promptly deposit or account for receipts of the Benefit Payment Control Unit
(BPCU) and the Occupational Safety and Health Unit (OSHA) in accordance with Section
4-32 of the General Statutes. Also, one BPCU employee received and deposited 53 of 1,281
(4%) cash receipts transactions.
3. The Department of Labor should work with its related boards to ensure compliance
with applicable legislation. If the department determines that any statutory
requirement is impractical or outdated, it should request a legislative change.
Comment:
Boards under DOL had vacancies, expired terms, lacked posting of agenda and minutes,
and did not meet in accordance with statutory requirements and the Freedom of Information
Act.
4. The Department of Labor should comply with DAS General Letter 115 – Use of State-
Owned Motor Vehicles and develop procedures to accurately calculate and report the
taxable fringe benefits for commuting or personal use of a state vehicle.
Comment:
Monthly state vehicle usage reports improperly include instances in which official state
business miles are not separated from non-business miles. DOL does not calculate or report
taxable fringe benefits for employees who regularly park their state-owned vehicles at
home. DOL did not obtain DAS approval for two employees to garage state-owned
vehicles at their home.
Auditors of Public Accounts
29
Department of Labor 2019 and 2020
5. The Department of Labor should develop and implement internal controls to ensure
that all complaints are properly documented within the eWage system. The
department should develop policies and procedures to properly safeguard receipts,
and ensure compliance with accounting and deposit requirements in Section 4-32 of
the General Statutes and the State Accounting Manual.
Comment:
The division lacked sufficient controls to ensure that all complaints are properly
documented in the eWage system.
The Wage and Workforce Division does not maintain a cash receipts log. Checks are
entered directly into eWage system case files.
eWage Civil Penalty reports do not agree with Core-CT Civil penalty revenue reports, and
there is no reconciliation process between WWSD and the fiscal unit to ensure all receipts
are properly recorded and deposited.
DOL did not promptly account for and deposit receipts.
6. The Department of Labor should implement an internal control structure for asset
management that is capable of meeting statutory requirements of accountability and
reliable reporting.
Comment:
DOL’s asset inventory is incomplete and unreliable. Core-CT inventory records indicate
that the department conducted the most recent physical inventory in 2015 and has not
entered any acquisitions since February 2019 into the asset management module.
7. The Department of Labor should improve administrative oversight and pursue
adoption of statutorily required regulations or request legislative changes to repeal
unnecessary or outdated regulatory mandates.
Comment:
DOL did not establish required state regulations for 11 out of 35 statutory requirements.
Auditors of Public Accounts
30
Department of Labor 2019 and 2020
ACKNOWLEDGMENTS
The Auditors of Public Accounts wish to express our appreciation for the courtesies and
cooperation extended to our representatives by the personnel of the Department of Labor during
the course of our examination.
The Auditors of Public Accounts also would like to acknowledge the auditors who contributed
to this report:
Dennis Collins
Sidney Gale
Jaimey Makie
Dennis Collins
Principal Auditor
Approved:
John C. Geragosian
State Auditor
Clark J. Chapin
State AuditorFile and source
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- Original
- wp.cga.ct.gov