Human Resources: Background Checks Process Has Improved, but Some Inefficiencies and Gaps Persist

November 01, 2018 |  Audit Reports

In July 2012, we reported on significant management control weaknesses in the company’s background checks process for the employees it hires, which the company took actions to address. The purpose of this review was to provide an update on the company’s background checks process. Our objective was to assess the efficiency and effectiveness of this process for company employees and contractor employees working in the company.

We found that the company has strengthened its background check process since 2012. However, the company’s background check vendor returned more than 54% of background checks in fiscal year 2017 for the company to complete because 1) a contract provision limited the amount of education and employers that the vendor could check, and 2) company officials did not ensure the vendor was adhering to company guidance on how to resolve minor discrepancies.
We also found that the company did not comply with its policies for ensuring contractors conduct the required background checks on their employees working for the company. Additionally, the company did not conduct independent audits to verify that the contractors conducted these checks and to ensure that contractors use a company-approved vendor to ensure that checks meet company standards.
We recommended that the company strengthen its oversight of the background checks process by ensuring that its vendor follows company guidance for resolving questions about the education and employment histories of prospective employees. In addition, we recommended that the company address background check vulnerabilities in its contractor workforce by clarifying which department is responsible for the following activities, and ensuring that the departments are initiating implementation:
• ensuring that contractors self-certify that they completed checks of their employees working in the company
• auditing contractors’ compliance with the requirement to conduct checks
Finally, we recommended that the company clarify its policy requiring the company to develop a list of approved vendors that contractors can use to conduct checks and initiate implementation.

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