My recent attendance at a Legislative Post Audit Committee allowed me to receive numerous briefings on a wide variety of topics and agencies that have been subjected to reviews.
A recent audit to review data systems for evidence of inappropriate payments to individuals and contractors was conducted. The method used is called “Data Mining” where an in-depth evaluation of records using special hardware and software to review the available data that allows us to:
*Analyze entire groups of transactions, budget categories, etc., instead of just random samples.
*Identify specific transactions or situations more likely to be fraudulent or abusive, and to focus the audit effort on those items.
*Compare large data sets belonging to different agencies or divisions that normally wouldn’t be compared.
While no audit approach can guarantee that existing fraud, abuse, or non-compliance will be found, this approach increases that likelihood. For this monitoring period (Jan-June 09) we focused on overtime pay, business procurement cards, contractor payments to state employees and a few other issues.
In March 2009, we released our findings related to business procurement cards as a separate audit report (see Business Procurement Cards: Expanding Their Use To Increase Cash Rebates to the State).
We found that agencies with very high overtime costs could reduce their costs by as much as $240,000 a year if they could hire additional employees, rather than paying so much overtime to existing employees.
However for some agencies recruiting qualified employees is a problem, or existing employees want the overtime pay to make their low-paying jobs more attractive. We also looked at several specifics cases where employees worked significant amounts of overtime, or where State agencies paid their employees as contractors, and we found that agencies generally had reasonable explanations for these situations.
The auditors identified in the Department of Health and Environment where a manager is married to a subordinate, and the department hasn’t acted to limit the potential conflict of interest.
When State employees who earn hourly wages work more than 40 hours in a week, the employee receives either compensatory time (a form of leave that an employee can use at a future date) or overtime pay for each additional hour worked. Whereas compensatory time generally accrued hour-for-hour, employees get paid at 150% of their hourly rate for overtime.
What this means is that for a $20.00 hourly employee, he now gets paid $30.00 an hour for the overtime and this is considered a “premium”. The state had $4,351,958 in “premium payments during FY 08.
The state paid a total of $13.1 million in overtime pay in fiscal 2008. KDOT had 185,506 overtime hours, (think snow removal and road salt), The Highway Patrol had 54,446 overtime hours, The Hutch Correctional Facility had 31,052 overtime hours, El Dorado Correctional facility had 23,682, and well you get the picture.
Total overtime hours for the State were 532,847 overtime hours while 33 agencies paid no overtime during this period.
Why overtime? Good question and here is the short answer. OT is used to cover temporary gaps in staffing caused by vacations, sick leave, training or other scheduling issues. OT is used to fill in for long-term vacancies due to budget cuts and hiring freezes or while qualified people are located. As I mentioned earlier OT can also be used to provide additional compensation for lower-paying jobs.
While compiling a list of State employees who earned the most overtime pay in fiscal year 2008, we noticed two administrative employees at the Kansas Lottery—an executive secretary and an administrative assistant—who had earned a surprisingly high amount of overtime pay for their positions.
Each had more than 700 hours of overtime in a year, and increased their annual earnings by almost 50%. No other State employee in these types of positions had earned more than 100 hours of overtime.
In addition to their administrative roles with the Lottery, the two employees also serve as “draw officials”. At least one draw official is required to come in each evening to help draw the lottery numbers.
In cases where there are problems with the drawing (e.g. ticket sales aren’t appropriately shut down or a machine doesn’t appear to be functioning correctly), the entire Lottery facility has to be “locked down” until the situation is resolved (nobody enters, nobody leaves).
This entire audit and many others can be found at their website, www.kslegislature.org/postaudit.
I have been assigned to the Joint House and Senate Committee on Corrections and Juvenile Justice Oversight and we are scheduled to meet this week. I will provide you information on that as well.
I consider it an honor and privilege to serve you in Topeka and I want to know what you think.
Thanks, John.
Back to Updates
