Billy Vickers, City Auditor, presented the Audit Committee with an update on the Payroll and Timekeeping Assessment conducted by Protiviti. Mr. Vickers reported that the assessment has been ongoing over the past year and included approximately 70 recommendations. He noted that management responses were completed on May 5, 2025, and were previously presented to City Council at the June 16, 2025, work session. Mr. Vickers further reported that the payroll compliance and risk mitigation recommendation has been completed, along with other items, including onboarding and offboarding process improvements and automation of payroll system processes.

Mr. Vickers reported that development of payroll validation dashboards remains ongoing and is expected to be completed by the end of May. He explained that the dashboards are intended to improve data accuracy by identifying input and pay code discrepancies prior to payroll processing, allowing for timely corrections and improved internal controls.


Mr. Vickers advised that payroll system optimization is approximately 60 percent complete, with ongoing testing and phased implementation across departments. He noted that improvements have been made; however, some items remain delayed due to the complexity of system enhancements and dashboard development.

Councilmember Trey Terry inquired about payroll accuracy and timeliness. Paul Luizzi, Interim Deputy City Manager, advised that employees are generally being paid accurately and on time, with only isolated discrepancies, which are identified and corrected promptly. Mr. Vickers added that such discrepancies primarily result from pay code input errors or timing of entries, and that enhanced training and validation processes are being implemented to reduce recurrence.

Billy Vickers, City Auditor, presented the Audit Committee with a status update on the Internal Audit Payroll Error Review. Mr. Vickers reported that the review included a total of eight recommendations, with one completed and seven currently in progress.

Mr. Vickers discussed key observations identified during the review, including unsubmitted or unapproved timecards, payroll cycle timing, change of status tracking, benefit leave accrual accuracy, and pre-payroll input and verification. He noted that Outlook reminders have been implemented to prompt employees to complete timecards, which has significantly reduced related issues.

Mr. Vickers reported that improvements have been made to payroll cycle timing, with increased awareness among departments regarding submission deadlines. He noted that Human Resources is providing ongoing training to reinforce timely and accurate submissions. He further advised that change of status tracking remains an ongoing effort, particularly within Police and Fire, to ensure all personnel actions are properly recorded and processed.

Mr. Vickers explained that prior issues related to benefit leave accrual accuracy have been largely mitigated through more frequent manual system updates, following identification of a previously disabled automated feature. He also noted that enhancements to pre-payroll input, verification processes, and dashboard monitoring are in progress and are contributing to improved accuracy and earlier identification of discrepancies.

Mr. Vickers further discussed employee concerns identified during the review, including limited payroll transparency, complexity of overtime calculations, and lack of visibility into accrual balances. He explained that employees have experienced difficulty understanding pay calculations, including overtime and specialty pay, and that accrual balances are not consistently visible across systems.

As part of the proposed solution, Mr. Vickers presented enhanced pay stub formats for Fire, Police, and Non-Sworn employees, designed to provide greater detail and clarity regarding pay calculations and withholdings. He noted that staff is coordinating with departments, including Police and Fire, to obtain feedback prior to implementation, with anticipated rollout targeted for the near future. 

During the discussion, Committee members emphasized the importance of transparency and employee confidence in payroll processes. Staff reported that payroll personnel have been responsive to employee inquiries and are actively working to resolve issues promptly.

Billy Vickers, City Auditor, presented an update on current Internal Audit activities, including ongoing and upcoming projects.

Mr. Vickers reported that the Ambulance Service Rates review is substantially complete and that recommendations for potential rate adjustments are being finalized. He advised that a formal report, including management responses, is expected to be presented at the next Audit Committee meeting. He noted that any proposed changes will require City Council approval and review by the Arizona Department of Health Services due to regulatory requirements.

Mr. Vickers further reported that the Ambulance Billing Process review is currently underway. He explained that the review is focused on evaluating the billing process from end to end to ensure that all transactions are properly captured, recorded, and reimbursed in accordance with applicable requirements.

Mr. Vickers reported that a proof of concept has been developed for a continuous monthly audit process related to Purchasing Cards. He advised that this process is designed to identify and flag certain transactions for further review and that staff will be meeting with Finance to obtain feedback and determine implementation and reporting methods.

Mr. Vickers also reported that Development Impact Fees have been identified as a new audit focus area following discussions with Council and executive management. He advised that Internal Audit will collaborate with Protiviti to co-source the review, with the goal of providing a report to the Audit Committee at a future meeting.

Pro Tem Chair Vicki Gillis and Committee Members expressed appreciation for the progress and timeliness of the audit work. No further questions were raised.

This item was tabled for a future meeting; no review, discussion, or action was taken.