Finance committee hears timeline for payroll fixes, audits and back-pay review

City of Westfield finance staff told the finance committee on March 24 that they expect near-term fixes to lingering payroll errors and a payroll audit to follow, while a separate review could trace any missing retirement contributions.

The committee heard that Baker Tilly has been working on correcting payroll reporting and that staff aim to complete 401(a) match reports and initial reconciliations by the end of the week. Arla, a Baker Tilly consultant, said, "Baker Tilly has been working, really diligently to ensure that payrolls are accurate, and I think that's really going well." The committee also discussed a separate payroll audit and the possibility of a forensic audit if that review turns up discrepancies requiring deeper investigation.

Committee members and staff described a range of outstanding issues, including incorrect deductions in one early pay period of the year, missing medical and dental deductions for some public safety employees, and the need to transfer payroll history into new profiles for accurate reporting. Kelly, a payroll staff member, said, "On payroll, it's much better now" and described continuing work on accruals, vacation and sick balances. Kelly told the committee the team expects accrual corrections within two to three weeks and said work on January 2025 history had been processed as a payroll run to correct public safety records.

Clerk Treasurer Marla, who identified herself as the clerk treasurer and fiscal officer, described an immediate payment she made after receiving a request from a state agency and said she paid to avoid harming the fire department while the matter was resolved. She told the committee she had contacted NPERS/MPERS and reviewed wage-and-contribution reports, and that the office will supply a detailed audit report once Baker Tilly has finished its work.

Committee members pressed on how far back the city must look for missing payments; one member asked about a statute of limitations for payroll corrections. Caitlin (staff) said she did not know the specific limit and would check. Arla told the committee ADP indicated it may need two to three weeks to pull older paper records and had placed a rush on that request.

Officials said roughly five pay periods since the start of the year were affected by deduction issues, with pay period two or three identified as the most problematic. The city will reconcile whether the city owes employees money or whether employees owe reimbursements; Marla said the council will review any settlement and decide whether to absorb small-dollar discrepancies.

The committee discussed the possible scope of further audits. Arla characterized the immediate work as a payroll audit and cautioned it is not initially a forensic audit — a separate, fraud-focused inquiry — but that a payroll audit could lead to a forensic audit if evidence warrants it. Arla said the payroll audit will check whether retirement contributions were made and timeliness concerns were addressed in accordance with plan documents.

The committee directed staff to complete the reconciliations and present a final audit summary to the council for any decisions about absorbing costs or seeking recovery. Staff said they will provide a final detailed audit once Baker Tilly completes its analysis and ADP has supplied older documentation.