External compliance audits.

(1) The department shall conduct audits of the payroll and personnel records of participating agencies. These audits shall be made to determine the accuracy of reports submitted to the department and to assess the degree of compliance with applicable statutes, rules, and coverage agreements. Audits shall be scheduled on a regular basis, as the result of concerns known to exist at an agency, or as a followup to ensure agency action was taken to correct deficiencies found in an earlier audit.

(2) Upon request, participating agencies shall furnish the department with information and documents that the department requires to conduct the audit. The department may prescribe by rule the documents that may be requested.

(3) The department shall review the agency’s operations concerning retirement and social security coverage. Preliminary findings shall be discussed with agency personnel at the close of the audit. An audit report of findings and recommendations shall be submitted to department management and an audit summary letter shall be submitted to the agency noting any concerns and necessary corrective action.