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WPCNR SCHOOL DAYS. By John F. Bailey. January 7, 2008, Updated 3:09 P.M. EST: An audit of the city school district payroll operations from July 2006 to Sept, 2007, by the New York State Comptroller’s Office found the district lacked adequate checks and balances of approvals for payments and criticized the district overtime policy as being “improperly monitored,” requiring that all overtime in the future be pre-approved and the purpose documented.
The District has taken steps to correct the situation in early December, and has 90 days to submit a report on how the comptroller’s office criticisms of the overtime procedures – in place for years — are being addressed.
Construction Projects Will Not Be Scrutinized At this Time.
Emily DeSantis, a spokesperson for the Comptroller’s Press Office advises WPCNR that the Comptroller’s Office has no plans to review the $28 Million high school construction project conducted between 1999 and 2003, (which resulted in a $2.8 Million judgment in January of 2007 against the district in U. S. Supreme Court for engaging in constructive fraud to deceive one of the contractors), nor does it have any plans at this time to monitor the new $69.6 Million city school district construction project now under way.
Ms. DeSantis, also told WPCNR that the school district “did not ask for OSC’s assistance with the current construction project.” The statewide report on school audits issued by the OSC lists among its many services available to school districts aid in planning for major construction projects such as new buildings to keep costs in line, and also advice on financing major projects. Comptroller Thomas P. DiNapoli’s news release on the statewide school audit and the Annual Report listing the aids the Comptroller’s Office provides school districts may be found at http://www.osc.state.ny.us/press/releases/dec07/122707a.htm
Specifically the audit of the district payment operations says, “The District has not established an internal control system that provides adequate oversight of payroll certification, pre-approval of overtime, and proper access controls to software applications within the information technology system.” The auditors found 19 payroll warrants of 32 that “were not certified as required by Education Law and none had a date to indicate when they had been reviewed,” and cited “an increased risk that payments were made without proper review and approval.”
You may read the report at http://www.osc.state.ny.us/localgov/audits/2007/schools/whiteplains.html
The Audit Report dictates, “The Board should develop overtime policies and procedures, and District officials should ensure they are implemented. Such policies and procedures should require the pre-approval of all overtime and document the purpose.”
Overtime Undocumented.
The Comptroller auditors criticized the management of overtime by the Facilities and Maintenance Department, saying “District officials did not properly monitor overtime usage.” The report said, “The Facilities and Operations Department incurred $614,837 of overtime without maintaining adequate documentation of overtime usage,” over 13 months.
The Comptroller audit states, “ The District’s Facilities and Operations Department, with a staff of 90 employees, had approximately $3.7 Million in regular salaries and incurred an additional $614,837 in overtime pay during the 2006-2007 fiscal year. Five of the 90 employees received 21% of $614,837 of overtime paid to Facilities and Operation employees. One emplyees’ overtime amounted to 65% of his annual salary. This employee’s annual salary was $52,134 and he received $33,753 in overtime pay.
The Director of Facilities (Director) informed us that overtime for Facilities and Operations personnel is verbally pre-approved by building administrators and no documentation is maintained to corroborate the purpose of overtime. As a result, there is an increased risk to the District of incurring unnecessary overtime cost.
Overtime Cutting Has Been Substanial.
The Superintendent of Schools Timothy Connors told WPCNR that the district has cut down on the expenditures for overtime over the last several years but did not have the figure on how much has been saved, saying he would get that figure for WPCNR . Connors said the Comptroller’s Office has averages for expenses like overtime, that triggered their interest in the White Plains overtime figures.
“This district does an awful lot in keeping our schools open. First of all we don’t want to lose our service to the public. You’re in our schools all the time, our building are open til 10 o’clock or later. We want to continue to provide that service not only for education programs but for other programs we do for the city, but there may be ways we can cut our costs. We’re in the process of looking at those now, and that’s what we implied in our response (to the Comptroller’s Office),” Connors said.
“We’ve got people working on it. We may always be higher than the average (overtime) because of the level of service we provide.”
WPCNR asked if the school district required organizations to pay the cost of keeping the buildings open.
“People outside the community have to pay, we charge them a higher fee than we charge the city recreation and youth bureau. Those costs are part of the cost in the education budget, but they service the wider city. We may look at increasing fees, would be one thing, and that’s one of the things we’re looking at, but I think it should be kept in mind (and we said this to the comptrollers), what they did they have as formula and they said our costs are high, but I’m sure that other school districts don’t keep their schools open as much as we do.”
I asked when the new overtime tracking policy as suggested be formulated.
“I can’t give you a date. We’re working on it now. And it will be part of what we do for our budget because we want to bring those costs down.”
I asked if now all overtime would have to be approved. Connors said, “I think what it does is it shows we made some substantial changes in overtime over the last couple of years. Ever since Dr. Lenora Boehlert (Assistant Superintendent for Human Resources) has been here, we’ve taken a close look at overtime in our secretarial areas and other areas of the school, and what we were cited for were the high costs in our custodial overtime, and a lot of that is sports programs as well. We’re going to look at trying to find more economical ways of making sure the work that has to be done is done and at the same time serve the public.”
Asked how much overtime had been cut, the Superintendent said he would get that figure, that it “had been cut back substantially.”
Software Access analysis
Asked how serious Connors thought the software access criticisms were, the Superintendent said, “What that really means is in terms of checks and balances, the people who are making the changes on payroll, shouldn’t be the payroll clerks who come out of Dr. Boehlert’s office. That’s real simple.”
The Audit Report told the district to assure that “incompatible payroll duties relating to personnel (hiring, pay rate setting and benefits), timekeeping and supervision, payroll records processing and check distribution are not accessible by the same person.”
The auditors noted: “The District has a Human Resource Department independent of payroll processing, the current software grants payroll personnel access to personnel records. As such, payroll personnel would be able to add new hires, adjust salaries, change payment instructions, update employee files, and enter salaries. These access control weaknesses increase the risk that payroll transaction errors and irregularities may occur and go undetected.”
On the payroll approvals.
Mr. Connors downplayed this protocol criticism: “As you know the largest percentage of our payroll is done by direct deposit. The payroll office has been doing that. The person who should push the button to send it off is our person here, the treasurer, and that will be done.
So it’s just simple checks and balances. No improprieties. If you don’t have those checks and balances then you could have something occur, and so we’ve taken steps directed by the Comptroller’s Office.”
The Superintendent said he considered the Comptroller’s report “a good audit.”
Fixes Are Under Way
The School District has sent a letter to the Comptroller’s office promising the design and implementation of an Overtime Policy and Regulations as suggested, and instituted the Payroll Access and Software Access recommendations, and installation of “routine audit logs” to check for “unusual transactions or adjustments” (implemented November, 2007); the Internal Claims Auditor will also be provided sufficient time to review payments.
