By The Department of Finance has strengthened processes to ensure it pays out former city employees promptly and accurately for all unused leave, according to a new follow-up report from Denver Auditor Timothy M. O’Brien, CPA.
“Employees leaving the city are entitled to all earned pay and benefits. It’s encouraging the Department of Finance implemented many of our recommendations to ensure workers are paid what they are owed,” said Auditor O’Brien. “Though a few other needed improvements remain unresolved.”
Auditing payroll data
Finance now has clear and consistent guidelines and expectations for processing separations and payouts to former employees.
Finance created draft policies and procedures to audit separation payout data every three months to ensure accuracy. Although we found some issues with how staff completed these audits in 2025, the department is training its staff to ensure consistent and accurate payout audits.
Resolving timekeeping issues
In 2021, the city’s previous timekeeping system, Kronos, experienced a ransomware incident. City employees were unable to access their leave balances for months. After restoring Kronos, Finance documented procedures to correct leave used during the outage, developing a policy to address employees with negative leave balances.
However, Finance staff did not always follow the leave balance correction procedures. For example, there was no information about how leave balance cases for 284 departing employees were resolved.
“If Finance is not keeping adequate records, there’s a risk an employee may not be paid for all the unused leave they are entitled to,” said Auditor O’Brien.
Finance now has a plan to use a temporary web-based timekeeping system during any future outages with its current timekeeping software, Workday.
Recouping unreturned computer costs
The city implemented our recommendation to recoup the costs of unreturned city property, like computers, if separating employees do not return them. Now, former employees may be invoiced for the value of the property. Failure to pay the invoice can result in the invoice being sent to a collections agency.
“This new policy protects the city from financial losses and holds future departing employees accountable for returning city property,” Auditor O’Brien said.
Finance fully implemented seven recommendations, partially implemented five recommendations, and did not implement five recommendations from our original audit.
We may perform a future audit to ensure the city takes appropriate corrective action to address any outstanding risks with inconsistent application of existing or drafted policies and procedures related to separation payout processes.
