San Diego taxpayers may have been taken for a costly ride over excess overtime pay awarded to county workers, including those in the sheriff's department, says a newly released August 21 report by county chief of audits Juan Perez.
According to the document, during the 2013 fiscal year, county employees “recorded approximately 1.2 million hours of overtime hours.”
The county paid “$43.9 million in cash and $5.6 million in compensation hours for overtime worked. This amount represented nearly 4.6% of the approximately $1 billion spent on total personnel costs for the year.”
With that much money at stake, the county has policies intended to keep track of the funds, many of which have been violated or ignored, according to findings of the audit, which sampled 30 sheriff's department employees with the highest reported overtime.
The auditors then "judgmentally selected one pay period for each of the 30 employees." They found "a total of 177 overtime transactions" for the workers.
A series of discrepancies soon began to emerge.
"82 of the 177 overtime transactions were missing supporting documentation," the report says.
Despite a supposedly iron-clad county records retention policy requiring officials to safeguard payroll documentation, the audit found that the procedures had in many cases not been followed. So-called payroll exception time reports supposedly documenting the overtime pay were "not consistently retained for three years after termination."
Auditors were "unable to verify overtime approvals and reconcile data entry accuracy for 82 of the 177, or 46% of overtime transactions selected in our sample."
Making things worse, of the 95 overtime transactions that did have accompanying paperwork, auditors discovered data errors on 12, "nearly 13% of overtime transactions tested."
Says the audit, "eight transactions were posted on the wrong date," and "five transactions had the incorrect number of hours recorded," resulting in "an overpayment of 95.5 overtime hours."
According to the report, “While the Sheriff’s Department corrected four of the errors within a month of occurrence, one of these errors was not detected until the completion of this audit.”
In addition to those lapses, four of the overtime claims examined were "missing employee’s signatures," and one lacked a supervisor’s signature.
Timecards for the 30 sampled workers also contained gaps, with eight missing employee signatures and five not having written supervisors’ approvals.
"Missing approvals increase the risk of inaccurate and/or unauthorized overtime hours reported resulting in incorrect wages paid to employees," the audit points out.
Another set of troubles was discovered at Child Welfare Services in the county's Health and Human Services Agency.
"Some employees reported having worked unauthorized overtime and not recording it," the report says, adding that the auditors had "found that three of four supervisors interviewed were aware of staff working unauthorized overtime."
Additionally, "6 of 10 employees interviewed stated that they do not consistently report overtime worked."
According to the audit, reporting policies are violated by workers who believe that “management will perceive them as poor performers for being unable to keep up with their assigned workload," and the "perception or belief that there is excessive workload."
Another reason given by the workers for not reporting is "difficulty in getting management authorization to work overtime or forgetting to request authorization."
Notes the document, "Failure to report overtime may increase the risks for financial liability for unpaid wages and related penalties, grievances filed for non-compliance with labor laws or [memoranda of understanding], and decreased worker productivity."
In a July 31 response to the draft audit, sheriff William Gore agreed with the findings and promised to clean up the situation by September 1.
“It was determined that many of the errors processed by Sheriff's Payroll are fixable and can be corrected with training,” said Gore. “Central Payroll has begun providing training and will continue to provide training when needed.”
Health and Human Services chief Nick Macchione concurred, saying in an August 19 letter: "Managers will be reminded of their duty to ensure procedures are followed and will be reminded that the failure to follow these procedures will result in appropriate action."
Registrar of Voters Michael Vu, whose department was also found to have payroll record-keeping problems, similarly agreed with the findings in an August 19 letter.