OVERTIME AND COMPENSATORY TIME

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PURPOSE <strong>AND</strong> SCOPE The purpose of the audit was to: • determine if overtime is assigned and paid and comp time is assigned, accrued and used in accordance with County Policies and Procedures, Collective Bargaining Agreements and other laws and regulations to safeguard against the potential for abuse, • determine if overtime and comp time are managed economically and effectively, and • report on overtime and comp time paid. Detailed transactions for various departments were tested for the year ended December 31, 2008 for the pay periods ending June 28 and September 20, 2008. Various financial data were compiled for calendar years 2004 through 2008. This audit did not examine whether departments/divisions were properly staffed to carry out their mission. METHODOLOGY Our methodology included: • Determining overtime and comp time policies based on County Personnel Policies and Procedures, Collective Bargaining Agreements and the Fair Labor Standards Act (FLSA). • Selecting departments and position titles for testing, conducting interviews with appropriate County personnel to gain an understanding of the payroll process, and then conducting audit tests on samples selected. • Compiling and analyzing financial data for overtime and comp time expenditures. • Benchmarking with other governmental organizations. We conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. 3
AUDIT RESULTS Section A – Reporting on Overtime Information 1. Recalculation of Overtime OBSERVATION Effective January 1, 2008, the County Administration decided to make significant changes in the reporting of certain pay codes to more accurately depict financial statement presentation with actual time worked. Certain pay codes previously grouped and reported as overtime wages were reclassified to regular wages and removed from overtime reporting. This reclassification resulted in a significant reduction in overtime costs per the financial statements. Comparative analysis of financial data in Bi-Tech and County financial statements could be misleading since previous year’s data have not been restated. Salary information was obtained from the Lawson payroll system and verified for accuracy to the County financial statements. Pay codes currently classified as overtime wages and posted to Bi-Tech account # 50050 were compiled for the period 2004 through 2008. For comparative purposes, the restatement with corresponding year to year increases of overtime are listed below. Overall for the period, Northampton County had an increase in overtime costs of 76.1%. Overtime As YEAR Overtime As Originally Reported in County Financial Statements Restated for Change to Pay Code Groupings Effective 1/1/08 2004 4,182,703 2,042,416 4 % Increase in OT from Year to Year (Restated) 2005 5,055,956 2,699,290 32.16% 2006 5,795,004 3,170,758 17.47% 2007 5,642,525 3,142,679 -0.89% 2008 ** 3,590,385 3,596,650 14.45% ** This is the first year the financial statements reflected the change in payroll code groupings. The amount per the financial statement reflects adjustments and expenditure credits and hence will be lower than the amounts actually paid for overtime. RECOMMENDATION The Fiscal Affairs Department prepares several overtime reports for management’s and Council’s review. The above change in pay code groupings should be noted when dealing with reports for years prior to 2008.
Page 1 and 2: Audit Report County Controller Step
Page 3 and 4: Table of Contents PAGE EXECUTIVE SU
Page 5: INTRODUCTION The country is current
Page 9 and 10: 2. Overtime Statistics by Departmen
Page 11 and 12: 3. Compensatory Time OBSERVATION Pe
Page 13 and 14: A committee will be put together to
Page 15 and 16: 2. Payroll Errors OBSERVATION Two p
Page 17 and 18: Section C - Compliance 1. Release T
Page 19 and 20: 2. Monitoring Compensatory Time OBS
Page 21 and 22: Policies that Boost Overtime Costs
Page 23 and 24: Prison Employee - 2008 Attachment 1

OVERTIME AND COMPENSATORY TIME

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