An annual review by the State Auditor’s office found not all Iowa Workforce Development employees appear to be reporting “actual hours worked” on specific programs.

According to the auditor’s report, the department “has not effectively communicated” the proper procedures for keeping track of employee work hours. As a result, payroll costs could be charged to the wrong program.

The agency has a wide-range of duties — it manages unemployment benefits and job training programs, for example — and many operate with a combination of state and federal funds. The auditor says if employees aren’t properly tracking their work hours, payroll costs may be “over reported” to federal programs.

The department says it has directed supervisors to more closely review hourly pay records. In addition, the agency will generate “payroll variance reports” each quarter for employees “who appear not to be changing their time records.”

The auditor cited the agency for an initial report on unemployment insurance payments from Iowa businesses that was off by nearly $13 million. The figure was corrected in a final report, but the auditor has recommended that the agency upgrade the software it uses to calculate unemployment insurance payments.

The auditor also found the agency does not routinely conduct background checks of people applying for “sensitive” jobs in the department, particularly IT staff and employees who handle cash. Iowa Workforce Development officials say they’re talking with the state’s HR agency to come up with a list of sensitive jobs that should require background checks.