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Thursday, November 29, 2007

City Audit Issued

By Dan
Oakland City Auditor Courtney Ruby today issued a performance audit of the City of Oakland’s payroll system. Unlike a financial audit, the intention of a performance audit is to address whether the City is effectively and efficiently spending taxpayer dollars and complying with relevant rules and regulations.
 
Auditor Ruby contracted Sjoberg Evashenk, a consulting firm run by Kurt Sjoberg, the former State Auditor of California, in March of 2007 to conduct the first comprehensive, citywide performance audit of the City’s payroll and compensation practices. Because 55 percent of the city’s budget is earmarked for personnel expenses, Ruby determined that this audit was a logical starting point for assessing the City’s business processes.
 
The audit identified over three million dollars in city funds that were paid out in error, prematurely, or in violation of city rules and collective bargaining agreements. Specific findings from the audit include:
 
• Managers received more leave than allowed under collective bargaining agreements, costing the city an additional $341,000 in 2006.
 
• City employees sold back at least $3 million more in leave than allowed—$2.5 million of vacation leave, $500,000 of Management Leave, and $113,000 of sick leave. For instance, one employee was allowed to sell back 480 hours of sick leave or five times the amount allowed in the collective bargaining agreement.
 
• City employees received 294 salary advances valued at over $560,000 that were in effect interest free loans. The city has yet to collect on $68,000 in outstanding salary advances including $24,000 from employees no longer working for the City.
 
• One employee was awarded 22 extra vacation days and was paid $17,000 for this additional leave that should not have been received. The error went undetected even when the employee left city employment.
 
The report concludes that these instances of overpayment to individuals occurred either because there were no policies and procedures in place to prevent such unauthorized disbursements, or because the staff did not follow the policies and procedures that were in place. Accordingly, the audit report includes 14 recommendations to address the problems identified.
 
“The City can’t begin to fix problems until they are identified,” said City Auditor Courtney Ruby. “This audit shines a light on significant issues for the administration to address so that together we may operate our city government effectively, efficiently and in the best interest of the public.”

Posted at 03:22 PM | Permalink

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