State Controller John Chiang today said a review
of the California Department of Parks and Recreation's (DPR) payroll
process revealed managers and employees violated state policies and
keyed in payroll without proper documentation or authority, creating the
risk of abuse, fraud and overpayments.
"The deliberate disregard for internal controls along with little
oversight and poorly-trained staff resulted in improper payouts to
Parks' employees," said Chiang. "When security protocols and
authorization requirements so easily can be overridden, it invites the
abuse of public funds."
Much of the DPR's payroll problems were related to "out-of-class"
compensation (OOC), which is a type of pay for employees who perform
duties far outside the scope of their position. This type of pay may
only be used in limited circumstances, for a specific number of days and
with documentation supporting the additional pay. The review, which
looked at DPR's payroll processes for the period of July 1, 2009,
through June 30, 2012, found that management circumvented rules and
regulations regarding employees who were working out-of-class (OOC) by
keying in payments without receiving the proper approval or providing
needed documentation. During the period of review, 203 individuals
received out-of-class compensation that totaled approximately $520,000.
Without sufficient documentation, the Controller's auditors were
unable to determine how much, if any, of the payments were lawful.
However, the auditors did find that employees were paid OOC in excess of
the number of days an employee may work out of class under state
policies and collective bargaining agreements. Some employees
apparently performed back-to-back OOC assignments, and one individual
worked on OOC assignment for the 120-day limit, then moved to another
OOC assignment for an additional 120 days, and then moved back into the
original OOC assignment. Twenty employees who were prohibited from
receiving OOC for more than 365 days exceeded that time period,
receiving an additional $46,000.
The review also found improper access to the payroll system. Last
summer, the media reported on a number of unauthorized leave
"buy-backs," in which employees were inappropriately paid the cash value
of their accrued vacation or other leave time. The Controller's review
found that approximately 90% of those unauthorized leave buy-backs were
keyed by two DPR managers who used the payroll system without approved
access.
In another finding, auditors determined that DPR employees who were
out on disability leave were inappropriately given credit for the
personal leave program. The program requires employees take a 5% pay cut
in exchange for eight hours of PLP/furlough credits per month.
The Controller recommends that DPR personnel remove all PLP credits
from employees who received disability pay and were not subject to the
5% pay cut, or the PLP credit.
Finally, the review revealed that eight of 19 temporary intermittent
employees who are limited to working only 1,500 hours per year exceeded
that amount, resulting in $11,272 in extra pay. Two of 16 permanent
intermittent employees received approval to extend their work hours
beyond the 1,500-hour limit; however, they exceeded the number of hours
approved in their extensions at a cost of $548.
Eight of 340 retired annuitants working during the review period
exceeded the limit of 960 hours per fiscal year at a cost of $5,810.
The Controller recommends that DPR set up a system to alert the
employee and the employee’s manager when the employee nears exceeding
the maximum number of hours per year they work.
The Controller calls upon DPR's new management team to pursue
reimbursement from employees who received compensation to which they
were not lawfully entitled and plans to revisit DPR’s payroll process
at a later date to ensure they are implementing this and the review’s
many recommendations to strengthen internal controls over the payroll
process.
