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The Importance of Personnel File Audits

A personnel file audit is the periodic and systematic review of your personnel files to assess whether the documents in each employee’s personnel file are accurate, up to date, and complete. The audit helps ensure legal compliance, identifies HR process weaknesses and highlights HR successes.

Given the fluid nature of most schools’ staffing, we recommend employers perform personnel file audits quarterly to ensure completeness of files. These audits help mitigate employer risks by reducing the number of lawsuits and penalties regarding violations of laws related to fair employment practices, I-9s, and record retention.

Conducting a personnel file audit can also flag possible HR process weaknesses. As an example, if a large percentage of employees are missing applications and resumes in their file, it may be time to revisit your onboarding/hiring practices to determine where information is not being consistently collected and cataloged. Likewise, personnel file audits can also point out where you are succeeding as an employer. If all employees have their benefits enrollment forms complete and on file, that is a positive indicator that your benefits administration strategy is working.


To ensure you conduct a meaningful personnel file audit, EdOps suggests the following items be checked for completeness.  

  • Offer Letter: Annual employment agreement that should be signed by the employee. The letter should include information such as start date, job title, salary, and hours. Frequently requested during the annual financial audit and state monitoring visits. If an employee’s title and salary changed mid-year, ensure you have an updated signed offer letter.
  • Form I-9: Mandatory federal form verifying both the employee’s identity and eligibility to legally work in the United States.
  • Tax Withholding Forms (state and federal): W-4 forms are often requested during the annual financial audit.
  •  Background Check: Assesses if an applicant poses an unreasonable risk to the business, its employees, or students. A recent check is often required by state or authorizer. In DC, the Public Charter School Board requires all school staff to have background checks conducted every two years. 
  • Police Department Fingerprinting: Provides a more in-depth background/criminal records search with more information than standard background checks. DC requires police department fingerprinting for all new hires – but unlike the background checks, above, these do not have to be renewed.
  • TB Test: Preventative measure that protects employer and students from possible infection.
  •  Handbook Receipt: Ensures employees are aware of the policies they are expected to adhere to.
  • Employee Evaluations and/or Disciplinary Documentation: In the event that an employee needs to be terminated, this paper trail is invaluable proof that the employee’s exit is legally justified.

Personnel file audits are a proactive step to minimize and prevent the costs associated with potentially costly compliance issues. It is for this reason that we recommend you find the time to incorporate these audits into your HR processes.

 

[This post contributed by Tiffany Evan, HRIS Specialist and Nadia Khan, HR Analyst.]