Annual Auditor’s Report on Philadelphia City Departments Fiscal Year 2023


Date: January 30, 2025
Categories
  • Departmental,
  • Finance & Policy
Controller: Christy Brady

Executive Summary


Why The Controller’s Office Conducted The Examination

Pursuant to the requirements of Section 6-400 (c) of the Philadelphia Home Rule Charter, we examined the financial affairs of Philadelphia’s city departments as part of our audit of the City of Philadelphia’s basic financial statements. The focus of our examination was to determine if management of each department had suitably designed and placed in operation internal controls to ensure accurate financial information and compliance with any laws and regulations related to revenue and expenditure activities.

What the Controller’s Office Found

The Controller’s Office again noted widespread deficiencies involving internal controls over payroll and cash activities that the Office of the Finance Director needs to address with department heads (see Appendix I). Highlights of the deficiencies include:

  • Several departments’ management of overtime required improvement. In eight departments: the Office of Innovation and Technology, the Department of Streets, the Department of Human Services and Office of Children and Families, the Philadelphia Prison System, the Office of Homeless Services, Water Department, the Free Library of Philadelphia, and Office of the Sheriff, employee overtime was not properly authorized. Two of these eight departments – the Department of Streets and the Water Department – could not provide documentation approving overtime for any of the overtime dates selected for testing.
  • Our testing of separated employees found that five departments had not yet taken action to recover the overpayment made to separated employees in prior fiscal years. The overpayment to seven separated employees totaled $16,968. Also, one department erroneously calculated an employee’s final payroll check resulting in underpayment of $7,162. The employee did not receive payment for the terminal leave time accumulated prior to his separation.

Also, for the fourth year, the Controller’s Office reported that the Office of the Managing Director did not timely deposit the revenue receipts. Of the 26 revenue receipts tested during fiscal year 2023, we noted that 13 receipts, totaling $214,465, were deposited over 15 days after payment was received.

What the Controller’s Office Recommends

The Controller’s Office has developed a number of recommendations to address these findings. The recommendations can be found in the body of the report.

 

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