PERSONNEL HIRING PROCESS AUDIT

Exit Conference Date: July 26, 2017

Release Date: October 12, 2017

Report No. 18-01

City of Orlando Office of Audit Services and Management Support

George J. McGowan, CPA Director

Perez Goree, CPA

Audit Program Manager

Joanne Cambridge, CIA Senior Auditor

TABLE OF CONTENTS

MEMORANDUM OF TRANSMITTAL ........................................................................................................................ 3

ISSUES, RECOMMENDATIONS AND MANAGEMENT ACTIONS ................................................................................ 8

ISSUES AND RECOMMENDATIONS .......................................................................................................................... 10

Reiterate the importance of fully documenting the I-9 process. .............................................. 10

Review and re-affirm the hiring process for Recreation seasonal and temporary positions ... 12

Review performance and staffing of Recruitment and Records sections ................................. 14

Increase monitoring of positions which remain open for a lengthy period. ............................ 15

Ensure policies and procedures provide clear and consistent directives .................................. 17

MEMORANDUM OF TRANSMITTAL

To: Ana Palenzuela, Human Resources Director From: George J. McGowan, CPA Director, Office of Audit Services and Management Support

Dates: Exit Conference: July 26, 2017 Release: October 12, 2017

Subject: Personnel Hiring Process (Report No. 18-01) The Office of Audit Services and Management Support performed an audit of the processes and controls over the hiring process of the City’s Human Resources Division. The audit objectives were to ensure that controls over hiring were adequate and operating effectively. The Human Resources Division manages and enforces hiring practices for City employees and conducts background checks for volunteers.

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.

We found no significant exceptions. The following report contains the issues identified during the audit, recommendations for improvement and management’s replies regarding actions taken/planned to be taken with respect to the identified issues.

We appreciate the cooperation and courtesies extended by the staff of the Human Resources Division during the course of this audit.

GJM/PG

c: Lisa Early, Families Parks and Recreation Director

Deborah Girard, Deputy Chief Administrative Officer Deonda Scott, Employment/Testing/Training Manager

Rodney Williams, Recreation Division Manager

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SUMMARY OF RECOMMENDATIONS, MANAGEMENT RESPONSES AND ACTION PLAN

MANAGEMENT RESPONSE & ACTION PLAN

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1. Human Resources should reiterate with its employees the importance of thorough documentation for the issues identified with the Employment Eligibility Verification process.

X

Management concurs with the recommendation. HR management will meet with Records and Employment staff to reinforce the importance of thoroughly documenting the I-9 process and of maintaining all relevant records. In addition, HR management will reiterate to staff that any name changes that occur from when an applicant is offered a job and the time that employee is on-boarded must be documented/noted on the file.

N/A

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MANAGEMENT RESPONSE & ACTION PLAN

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2. Human Resources should initiate with the Families Parks and Recreation Department a re-evaluation of the current business practices with regards to the hiring and on-boarding of Recreation seasonal and temporary employees.

X Management concurs with the recommendation. HR staff will meet with FPR Director and Recreation Division Manager to discuss the recommendations outlined in the audit since FPR is responsible for temporary/seasonal recruiting and controls the process.

N/A

3. Human Resources should analyze its performance over a selected future period to determine if it is necessary to request an appropriate body to independently access whether their current staffing levels are appropriate to ensure that performance is meeting expectations.

X

Management concurs with the recommendation. Staffing needs were evaluated by the HR Director. As a result, an additional HR Analyst positon was requested for FY17/18 to support Employment and Civil Service Testing. The position was approved and HR is currently recruiting for this position.

N/A

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MANAGEMENT RESPONSE & ACTION PLAN

# RECOMMENDATIONS

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4. Human Resources should implement a tracking/monitoring system for open position requisitions that have been open for an extended period of time.

X

Management concurs with the recommendation. John Kinloch, Employment Supervisor will develop a tracking system to monitor open requisitions and will work with Division Managers and the Budget office to close requisitions not formally being acted upon by the Employment Section.

N/A

5. Human Resources should ensure policies and procedures regarding the responsibilities for verifying prior employment and professional references are clearly written, and consistent with current business practices.

X Management concurs with the recommendation. John Kinloch, Employment Supervisor, will review all hiring materials and current business practices to ensure that it complies with City Policies and Procedures, and where there are discrepancies, the necessary changes will be made to ensure compliance.

N/A

ISSUES, RECOMMENDATIONS AND MANAGEMENT ACTIONS

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ISSUES, RECOMMENDATIONS AND MANAGEMENT ACTIONS

BACKGROUND

The Office of Audit Services and Management Support performed an audit of the processes and

controls over the personnel hiring process of the City’s Human Resources Division. The audit

objectives were to ensure that controls over personnel hiring process were adequate and

operating effectively. The Human Resources Division contains several sections which share

responsibility for recruiting, referring applicants for City job vacancies and “on-boarding” new

hires. The Employment and Recruitment section recruited and on-boarded 675 employees in 2015

and 773 employees in 2016, excluding sworn OPD and OFD new hires, which were not included in

this review as they are handled through a separate process in collaboration with Police and Fire.

OBJECTIVES AND SCOPE

The audit objectives were to determine whether the Human Resources (HR) Division’s new hire

process is efficient and in compliance with Policies and Procedures; and whether the policies and

procedures are currently effective.

The scope of this audit focused on employees that were hired during calendar years 2015 and 2016,

with the exception of sworn OPD and OFD new hires as noted above.

In addition, we tested controls to determine that the Human Resources Division ensures that new

hires meet qualification requirements for employment with the City, and were properly screened

and/or tested as prescribed in the City Policies and Procedures, 808 series.

We also designed our review to determine whether the Human Resources Division is collecting and

properly storing the public documents and forms required to document each hire.

The audit objectives also included steps to review that HR staff is actively sourcing candidates to

fill job vacancies and that the employment section is adequately staffed to ensure job vacancies

are filled in a timely manner.

We also reviewed the efficiency and effectiveness of on-boarding processes, including that salary

rates are properly reviewed and/or approved by the appropriate party in compliance with City

Policies and Procedures.

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METHODOLOGY

We reviewed City Policies and Procedures to gain an understanding of processes, the associated

risks, and controls to mitigate these risks. Additionally, we determined the number of employees

that were hired during calendar years 2015 and 2016 to identify files for a detailed review; as

noted above the hires made by Police and Fire were excluded from this review. We also

interviewed various personnel to understand the HR Division’s processes for hiring and on-

boarding new employees.

For the new hires tested, we found no significant exceptions. The specific areas tested included,

but were not limited to:

Employee Qualifications verification

Employment/References verification

Background Checks (criminal)

Medical and Drug screening

Executive Manager hiring approval

Staffing level

New Hire salary rate approval

Employee files (documentation and personal information safeguards)

While there were no significant exceptions identified in this review, we have identified

opportunities to improve the recruitment and records operations of the Human Resources

Division.

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IISSUES AND RECOMMENDATIONS

Reiterate the importance

of fully documenting the

I-9 process.

The Immigration Reform and Control Act of 1986 (IRCA) requires

employers to verify that all newly hired employees present

"facially valid" documentation verifying the employee's identity

and legal authorization to accept employment in the United

States. This is performed by the completion and retention of Form

I-9, Employment Eligibility Verification, for every person hired for

employment. There were two instances in our review where we

believe there was lack of proper documentation provided with the

Form I-9 and which indicate that Human Resources should

address through changes to its on-boarding process. We should

note that these two issues are isolated and not indicative of any

major control weakness.

In the first instance, the new hire job application, Interview Report

& Selection Authorization form and Employment Hiring Checklist

for Clearance listed the employee with one name and the

employee was on-boarded with another name. Based on

documentation in the employee file, we could not determine from

the evidence whether the employee was one and the same; as

there was no documentation/notation in the file indicating the

reason for the difference in name.

In the second instance, we could not verify that the Records

section reviewed the required documentation when they

conducted the I-9 verification process, as a copy of the employee

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social security card was not in the file. When an employee uses

only a copy of the driver’s license as a form of evidence, a second

form of evidence (i.e., a social security card) is necessary under

the IRCA.

The procedures used by Employment and Records personnel to

control the I-9 process, most specifically those which would

resolve the above issues, should be reiterated by HR management

with its employees.

Recommendation 1

Management Response

We recommend that Human Resources reiterate with its

employees the importance of thorough documentation for the

issues identified with the Employment Eligibility Verification

process.

Management concurs with the recommendation. HR

management will meet with Records and Employment staff to

reinforce the importance of thoroughly documenting the I-9

process and of maintaining all relevant records. In addition, HR

management will reiterate to staff that any name changes that

occur from when an applicant is offered a job and the time that

employee is on-boarded must be documented/noted on the file.

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Review and re-affirm the

hiring process for

Recreation seasonal and

temporary positions

During the audit we noticed the following issues specific to the

processes and procedures for hiring seasonal and temporary

employees for the Recreation Division:

A large number of FPR Seasonal/Temporary workers are

teenaged/young adults with limited work experience,

and as such their employment verification was either

incomplete or not evident in the employee file. There

are no guidelines specific to FPR Seasonal/Temporary

workers employment verification process in the policies

and procedures. Human Resources should consider

developing procedures specific to this group, such as,

requiring references from a school, teacher and/or

church in lieu of employment verification.

ASMS could not opine on FPR Seasonal/Temporary new

hires qualifications, as their employee file does not

contain a job requisition or job posting, nor were the

employment requisitions entered in Workday.

The Employment Manager explained that job

requisitions are not developed for FPR

Seasonal/Temporary positions, and Human Resources

has limited involvement with the FPR

Seasonal/Temporary workers recruiting process, and as

such they are not privy to the job postings. Human

Resources is only responsible for background checks,

medical/drug screening, and the on-boarding process.

Each FPR Recreation Center is responsible for developing

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job postings and recruiting candidates to fill

Seasonal/Temporary positions at their respective Center.

An employee fired from one Recreation Center due to

suspected theft was rehired by another Recreation

Center, although the Recreation Division Manager

informed the affected District Manager that the

employee was not to be rehired and the proper

documentation was completed.

Forms used to process new hires, i.e., Good Moral

Character form, were inconsistently completed.

Backgrounds Checks not completed on some 2016 and

2017 volunteers.

Additionally, Human Resources policies and procedures do not

refer to hiring directives specific to FPR Seasonal/Temporary

employees as is done for OPD and OFD hiring processes.

Recommendation 2

Management Response

We recommend that Human Resources initiate with the

Families Parks and Recreation Department a re-evaluation of

the current business practices with regards to the hiring and on-

boarding of Recreation seasonal and temporary employees.

Management concurs with the recommendation. HR staff will

meet with FPR Director and Recreation Division Manager to

discuss the recommendations outlined in the audit since FPR is

responsible for temporary/seasonal recruiting and controls the

process.

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Review performance and

staffing of Recruitment

and Records sections

We were unable to determine Human Resources actual time-to-

hire, as they have not developed or maintained performance

metrics. Also, we attempted to determine the average time-to-

hire by using data analytics techniques on reports obtained

from Workday, however, our efforts were unsuccessful. Other

manual methods were considered as well, however, were

deemed too time consuming. Thus, a “guesstimate” of a time-

to-hire of 90 to120 days, provided by the Employment

Supervisor was utilized to assess Human Resources.

ASMS obtained performance data from HR industry leaders such

as SHRM, Indeed, DHI-DFH, and Bersin by Deloitte which

indicate that industry averages for time-to-hire ranges from 30

days to 52 days. While these averages are for all industry types

and may be shorter than what should be expected in more

complex process of hiring for government employees, we

believe that it is important to establish meaningful performance

measures in this area.

We also reviewed the HR staff-to-new hires ratio, another

common industry statistic. The City ratio is lower than HR

leaders’ statistics, which indicates that the average HR staff-to-

new hire ratio is 1.1 to 1.3 staff members for every 100 new

hires. We found that the ratios for record section and

recruitment section were .44 and .37 staff members per 100

new hires and .57 and .50 staff members per 100 new hires,

respectively, for the two years we analyzed.

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Additionally, the upcoming retirement of a key staff member,

employed with the City of Orlando for 20 years, may further

impact staffing issues. This employee is one of the two

individuals primarily responsible for screening candidates for

open positions. We believe that an analysis of the performance

of the employment section is necessary to determine if the

current staffing level is appropriate for the workload of the

section.

Recommendation 3

Management Response

We recommend that Human Resources analyze its performance

over a selected future period to determine if it is necessary to

request an appropriate body to independently access whether

their current staffing levels are appropriate to ensure that

performance is meeting expectations.

Management concurs with the recommendation. Staffing needs

were evaluated by the HR Director. As a result, an additional HR

Analyst positon was requested for FY17/18 to support

Employment and Civil Service Testing. The position was

approved and HR is currently recruiting for this position.

Increase monitoring of

positions which remain

open for a lengthy

period.

Human Resources does not have a process in place to track or

monitor the length of time job vacancies have been open. As of

3/1/17 we identified a total of 77 open job requisitions in

Workday. Of these 77 requisitions, 16 were opened in Calendar

year 2015 and 61 in Calendar year 2016.

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The Employment Supervisor explained that a position

requisition can only be closed in Workday if the position is filled

or the Division/Business Unit manager closes the requisition

without filling the position. He also stated that Human

Resources attempted to work with these managers to address

this issue, without success. Human Resources added that most

managers do not want to close requisitions without filling the

position since it impacts their budget and the viability of

keeping the position funded.

We believe that vacancies left open for lengthy periods can

result in lost talent, low morale due to overburdened

employees and/or disruption to business operations due to key

positions not being filled. We suggest that Human Resources

create an evaluation process for open requisitions which

includes affected managers and budget personnel so that

Workday only includes those open requisitions being formally

acted upon by the employment section.

Recommendation 4

Management Response

We recommend that Human Resources implement a

tracking/monitoring system for open position requisitions that

have been open for an extended period of time.

Management concurs with the recommendation. John Kinloch,

Employment Supervisor will develop a tracking system to

monitor open requisitions and will work with Division Managers

and the Budget office to close requisitions not formally being

acted upon by the Employment Section.

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Ensure policies and

procedures provide clear

and consistent directives

We noticed that applicants’ employment history was verified by

the hiring department and documented on the Employment

Verification form and/or on the Interview Report & Selection

Authorization form. However, City Policies and Procedures

808.2 addresses reference checks being performed and

documented on the reference check form provided in the hiring

package. In addition, during the recent hiring of the Senior

Auditor III, we were advised by Human Resources to obtain

three professional references from the employment applicant. It

was not clear whether reference checks referred to in the policy

and procedures spoke to professional relationships or prior

employment validation. Also, the hiring package does not

contain a reference check form; however, an employment

verification form is included.

Human Resources explained that the reference check noted in

the policy and procedures speaks to verification of the

applicant’s employment history, and should be documented on

the employment verification form.

Recommendation 5

Management Response

We recommend that Human Resources ensure policies and

procedures regarding the responsibilities for verifying prior

employment and professional references are clearly written,

and consistent with current business practices.

Management concurs with the recommendation. John Kinloch,

Employment Supervisor, will review all hiring materials and

current business practices to ensure that it complies with City

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Policies and Procedures, and where there are discrepancies, the

necessary changes will be made to ensure compliance.