By Teresa Acosta, May 6, 2025
An external payroll audit by the State Controller’s Office found more than $3.6 million in projected improper payroll costs at Cal Poly Pomona.
The report audited 105 transactions statistically selected from the 108,082 regular and overtime pay transactions, which Kimberly Allain, the senior associate vice president for employee and organizational development and advancement/HR operations at CPP, said was far more than the other campuses that also had audits performed during a similar period.
“A larger volume just naturally produces a larger error rate,” Allain said.
The State Controller’s Office also audited Cal State Los Angeles’ payroll. Of the 133,660 regular and overtime pay transactions, 105 were statistically selected for audit, according to the report. In CSU LA’s case, there were zero improper or unsupported costs identified.
Cal State Sacramento’s payroll audit report also revealed zero improper or unsupported costs identified within 77 out of 170,979 regular pay transactions statistically selected for the audit. However, the State Controller’s Office identified $238 in overtime pay as improper or unsupported within the 113 transactions statistically selected for the audit. This led to a projection of $38,039 in improper of unsupported overtime pay within 4,187 transactions.
Bonnie Thorne, the president of the Pomona chapter of California Faculty Association, said there were overpayments made to department chairs that pushed them into a higher tax bracket and resulted in negative consequences. According to IRS.gov, when income is increased the tax rate also increases at the higher level of income.
Another concern Thorne heard from faculty members is a lack of communication when they reach out to address payroll issues.
“If they thought there was a problem with their pay, they would reach out to payroll,” Thorne said. “And I don’t know, we thought the emails went into a black hole, so they would not get a response, and it’s just extremely frustrating for faculty.”
Thorne said Nicole Hawkes, the vice president and the chief of staff, committed to trying to be better during a meeting in the fall. Furthermore, Allain called the audit a “blessing in disguise” when she took over the unit in July 2020.
“As a new leader of that unit, it gave me a foundation or a groundwork to really implement the transformation that needed to take place in the unit,” Allain said. “I was lucky enough to really get what you could consider a consultant to sort of look at the work and to provide a way forward or true north for us to create this continuous improvement process.”
The 23-page report performed on CPP, which looked at the period between March 1, 2017, through Feb. 29, 2020, detailed six major findings:
- Inadequate segregation of duties and lack of compensation controls over payroll transactions
- Inappropriate keying access to the State’s payroll system
- Missing timesheets for regular pay
- Improper payments and missing timesheets for overtime pay
- Failure to collect outstanding salary advances
- Late separation lump-sum payments
In the over five years since this period, Allain said all the issues have been addressed, and they were more or less taken care of before CPP was given a draft of the report Sept. 12, 2024. Allain explained the one residual issue was staffing; this included making sure payroll technicians were well trained, correctly onboarded and given an experience that would lead to job satisfaction prompting them to stay.
Allain attributed staff shortages, such as losing five of the six payroll technicians, to the “Great Resignation.” According to the United Sates Census Bureau, this was when an unprecedented number of workers quit their jobs in 2021 and 2022 because of the COVID-19 pandemic. As a result, the remaining staff in CPP’s payroll department worked seven days a week for months. They worked evenings and weekends, which Allain admitted was unsustainable but important to the unit employees who take pride in their work.
In the CPP audit under salary advances, there were 59 transactions, and a net total of $9,687 improper costs identified. Allain said the recovery of accounts receivable is currently up to date and does not have anything outstanding from the last three to five years.
To address the inappropriate keying access to the State’s payroll system, Allain said improvements were made to streamline the clearance process by delegating the collection tasks to each corresponding department. For example, IT is notified to collect a laptop from an employee who is no longer in the position, and Facilities Planning and Management is responsible for collecting keys.
Hawkes said outdated technology could also be a source for errors discussed in the findings. The State Controller’s Office uses 1970s, DOS-based software that requires technicians to key in entries twice. The entries are put into CPP’s system and again in the State Controller’s system, doubling the chance of human errors.
“That’s a symptom of an outdated technology that, quite frankly, when it was created, never contemplated the kind of labor environment with the complexity of appointments that people have, especially in universities,” Hawkes said.
Among some of the technological improvements that have been made to reduce missing paperwork, such as the timesheets, was the transition from fully manual to digital. Allain confirmed a digitization project was 90% complete and is expected to be done in the fall.
Another integration made since Allain took over was the hiring of HR policy and audit readiness analyst Ellen Bui. The position is an internal control used daily to maintain compliance in payroll and talent acquisitions, according to Allain.
Statistical sampling was done for the findings of the missing timesheets, the failure to collect salary advances and the late separation lump-sum payments to calculate projections. Fei Kang, an accounting professor in the College of Business Administration, explained the methodology used in the report. Kang said the sampling was similar to general statistics theory, where, according to the report, a computer-generated, simple, random selection was used.
In the report, the confidence level was 90%, and the error rates were 0.70% for the missing timesheets for regular pay and 9.12% for improper payments and missing timesheets for overtime pay. Kang said 90% is a commonly used benchmark and an acceptable level to interpret how sure the findings are.
As a result of the payroll audit, Allain’s department requested a California State University internal audit of HR practices. The audit included other HR practices, not just payroll between 2021 to 2023. The report was expected to be finished in early April, but The Poly Post could not find the published results at the time of print. Allain said they were told it was one of the best outcomes they’ve had regarding CPP’s HR practices.
Feature image courtesy of Darren Loo