Documenting Board Approval for Payroll Contracts

by Connor Mortazavi, Staff Associate

Posted on May 9, 2026

The Uniform System of Financial Records Compliance Questionnaire (USFR CQ) has many questions and review procedures to follow, some simple to document, and some complex. A common issue we have seen in recent audits are districts having difficulties providing documentation or recording that an employee’s contract, wage agreement, salary and wage schedule, and other pay rate documentation were approved by the governing board; furthermore, sometimes the district does not realize that governing board approval is required for extra duties.

The USFR CQ, specifically governing board/management procedures (GB/MP) question seven, requires that “the governing board established written personnel and payroll policies and approved employee contracts, wage agreements, salary and wage schedules, and any other agreed-upon terms of employment.”

To comply with this USFR CQ question, the district’s governing board must approve the contracts, wage agreements, salary and wage schedules, and pay rate documentation at the monthly governing board meetings, ensuring the employee position and pay is recorded in the meeting minutes and agenda; furthermore, this includes any extra duties, such as coaching a sports team, tutoring, or training.

For districts that utilize a consistent salary and wage schedule, the board should approve it once every fiscal year, ensuring the approval is recorded in the meeting minutes and agenda and is up to date.

To help your District and auditor with this request, we recommend having a clear indicator of how and when a contract, wage agreement, salary and wage schedule, and other pay rate documentation are approved by the governing board. This could be as simple as providing the meeting date of when the payroll document was approved, to providing PDF documentation of the meeting minutes, highlighting where the agreement was approved, to even having a signature line for the board presidents to sign and date. Since payroll testing includes reviewing several documents for multiple employees, helping your district and auditor with this request will help ensure a quick and efficient audit.

If you have any questions about the USFR guidelines, please contact your audit team.