INTERAGENCY INTERNAL AUDIT AUTHORITY FREDERICK COUNTY DIVISION OF FIRE AND RESCUE SERVICE TELESTAFF SYSTEM

Transcription

1 FREDERICK COUNTY INTERAGENCY INTERNAL AUDIT AUTHORITY FREDERICK COUNTY DIVISION OF FIRE AND RESCUE SERVICE TELESTAFF SYSTEM MARCH 9, 2007 Frederick County Internal Audit

2 TABLE OF CONTENTS Executive Summary... 1 I. Introduction... 2 II. Background... 2 III. Scope and Objectives... 4 IV. Methodology... 5 V. Conclusion... 5 VI. Conditions and Recommendations Condition 1: Inequitable Leave Accrual For 48-Hour Employees... 6 Condition 2: Dual Time Entry Resulting In Overcompensation... 7 Condition 3: Interface Errors Between Telestaff And County Time System... 8 VII. Responses... 8 Frederick County Internal Audit

3 Frederick County Division of Fire and Rescue Services TeleStaff System Executive Summary Frederick County Internal Audit Department TeleStaff software is designed to meet the complex staffing needs of all types of organizations, especially those in law enforcement and public safety. For example, TeleStaff can incorporate complex organizational and collective bargaining rules commonly found in Public Safety and Law Enforcement organizations to ensure that staffing decisions are made fairly and accurately. 1 The focus of this review was to gain an understanding of how TeleStaff has been integrated with the Frederick County payroll system. The Division of Fire and Rescue Services (DFRS) began using TeleStaff in FY 2000 for scheduling purposes only; the software was integrated with the payroll process in FY 2002 when hours were exported from TeleStaff to the County Time System (CTS). Payroll disbursements for DFRS field employees are processed using the hours recorded in TeleStaff and are imported to the CTS via an interface written by the in-house developer of the CTS. The Bureau Chief of Operations estimates there are currently 277 field employees who are scheduled via the TeleStaff system. DFRS has demonstrated a professional and conscientious effort to implement TeleStaff to meet the scheduling goals of DFRS and provides an equal opportunity for staff to work extra hours if qualified and available. The interface that exports hours from TeleStaff to the CTS incorporates requirements; however; it is not functioning without errors. Internal Audit has also identified an inequitable leave accrual that resulted in an average overpayment of $131,823 and two additional conditions that are addressed in the report. Additionally, significant issues relative to DFRS but beyond the actual scope of the audit came to light and are addressed in a letter to management. 1 Source: pdsi-software.com Frederick County Internal Audit 1

4 I. Introduction The Frederick County Division of Fire and Rescue Services (FCDFRS) uses TeleStaff Software to manage the scheduling of field employees including firefighters and paramedics. The Interagency Internal Audit Authority approved this audit as part of the FY 2007 audit plan. Internal Audit (IA) conducted its review using standards as outlined in Generally Accepted Government Auditing Standards, 2003 Revision, issued by the Government Accountability Office (GAO). These standards require IA to maintain competence, integrity, objectivity and independence. Other requirements are to adequately plan the audit and to gain a sufficient understanding of internal controls to determine the testing to be performed. This report is intended to provide information to FCDFRS management. The report is a matter of public record, and with the exception of any applicable disclosure exemptions, distribution should not be limited. Information extracted from this report may also serve as a method to disseminate information to the public as a reporting tool to help citizens assess government operations. Management that is responsible for the functional area reviews the report and their formal written responses are incorporated into the final report per IIAA policy and Generally Accepted Government Auditing Standards (GAO Standard 5.27). II. Background Staffing for Public Safety and Law Enforcement can be a complicated and labor-intensive process. The Division of Fire and Rescue Services (DFRS) selected TeleStaff software to meet the challenge of scheduling the various shifts that can be twenty-four, twenty, twelve or eight hours in length as well as to incorporate the consecutive work hour requirements. DFRS began using TeleStaff in FY 2000 exclusively for the scheduling of field employees. In FY 2002, an interface was developed by the in-house developer of the County Time System (CTS) to roll the TeleStaff hours into the CTS for processing payroll. The Bureau Chief of Operations estimates there are approximately 277 field employees who are scheduled via TeleStaff as well as employees that use the CTS for recording time. Scheduling for the DFRS field employees presents several problems that have been addressed by developing a 48-hour work schedule (2,496 hours annually). The actual annual hours scheduled are 3,120. The difference in hours is incorporated in the schedule by including Regular Days Off (RDOs) sometimes known as Kelly Days. An RDO represents a workday on the schedule, but a day that is not worked. Employees can make themselves available to work an RDO via the TeleStaff system and still be compliance with the consecutive hours off policy. Hours worked Frederick County Internal Audit 2

5 on an RDO are worked as overtime hours. A twenty-four hour shift employee is given one RDO each pay period and a twelve hour shift employee is given two RDOs each pay period. A 48-hour a week employee is paid, on an average, 96-hours per pay period. The 96-hour average is based on a three pay period cycle where employees are paid bi-weekly. (See Figure 1.) Week Weekly Pay Period Average Hours Hours week time frame Figure 1 Compliance with the Fair Labor Standards Act (FLSA) or overtime is calculated using a 28-day cycle; this method was implemented on July 1, Under this method straight over time is paid for actual time worked until a total of 212 work hours in the 28-day cycle is reached. Work hours in excess of the 212 are eligible for firefighter overtime (FOT). FOT is paid every other pay period using the average FLSA hours for the program calculation. (See Figure 2.) Frederick County Internal Audit 3

6 Week Hours Pay Period Pay Period Average FLSA Average Program Calculation (192 + SOT Leave) 212 = FOT The employee s resulting hours are of hourly rate of pay. Figure 2 The TeleStaff interface with the CTS incorporates the logic to address the averages; however, the DFRS Administrative Aide has noted errors and she currently performs a manual review each payroll to assure that hours transfer accurately. This issue is addressed in Condition 3 of this report. III. Scope and Objectives The scope of the audit covered the current version of TeleStaff software that was implemented in April 2006, and the interface between it and the County payroll system. The objectives of this review were to: Review and document the TeleStaff system to gain an understanding of the scheduling process and to determine that overtime opportunities are equitable; Determine that the TeleStaff system properly interfaces with the County s timesheet and payroll systems; Frederick County Internal Audit 4

7 Determine DFRS adherence to written policies and procedures and compliance with FLSA requirements; and, Analyze overtime to determine any unusual trends. IV. Methodology Methods used in the audit included: 1. Interviews with DFRS, IIT and Finance management and staff; 2. Observing the payroll interface procedures; 3. Review of TeleStaff application set-up, method for creating rosters, scheduling and rules; and, 4. Use of Audit Command Language Software to extract data from Payroll and TeleStaff systems for analysis and review. V. Conclusion TeleStaff appears to meet the scheduling goals of DFRS and provides an equal opportunity for staff to work extra hours if qualified and available. The interface that exports hours from TeleStaff to the CTS incorporates requirements, but is not functioning without errors. This is addressed in Condition 3 of our report. The review of compliance with policies and procedures disclosed an inequity in the leave hours accrued for DFRS 48-hour employees. Internal Audit views this as a significant risk and has addressed this issue in Condition 1 of our report. Condition 2 in the report addresses a procedural issue to eliminate the possibility of overpayment to employees when time is recorded in the two different systems. We also noted issues that are beyond the scope of this audit and will convey our observations to management in a separate management letter. We would like to recognize the cooperation of all those interviewed during this audit as well as commend the diligence and teamwork of all those involved in integrating TeleStaff and the County payroll system. Frederick County Internal Audit 5

8 VI. Conditions and Recommendations Condition 1: Inequitable Leave Accrual For 48-Hour Employees Annual and sick leave for DFRS 48-hour employees is not accrued in accordance with Frederick County Personnel Rules. A review of the leave compensation disclosed that 10 hours was used as the basis for a day s compensation for this group of employees. This is not compliant with the Frederick County policy that uses 40 hours as a basis for compensation relative to other employees. (See Chart 1.) Since the DFRS has both 40-hour and 48-hour employees, the 48- hour employees are over compensated for an inflated number of hours over the 40-hour employees. Employee Hours Basis Day Ratio Compensation The value of a work day based on actual hours worked. The day ratio represents a measurable day for various employees. 1.2 days X 8 hour day = 9.6 hours Chart 1 Analysis of DFRS annual, holiday and sick leave for FY 2003 FY 2006 (Chart 2) indicates an average overpayment of $131,823. The analysis is based on the average annual, holiday and sick leave paid to the DFRS employees; however, the actual overpayment could be higher or lower since the amount of leave compensation is based on years of service. (See Chart 3.) ERNCD OTH EARNS * OTH HRS * AVG HRLY RATE* Corrected Hours* Excess Hours* OVER- PAYMENT* ANN 1,491,747 74, ,432 2,976 59,661 HOL 82,992 5, , ,319 HTP 974,738 53, ,587 2,149 38,984 SCK 746,606 37, ,021 1,501 29,860 Total 131,823 *Difference due to rounding Data analysis performed using Audit Command Language (ACL) and Excel Chart 2 Frederick County Internal Audit 6

9 Years of Days per 35/7 40/8 48/ hour Overpayment Annual Service Year Employee Employee Employee 10 hours per month Overpayment 0 to to Average Chart 3 Recommendation 1: Revised Leave Calculations Needed We discussed this issue with Human Resources during the audit, and recommended that they review our analysis and revise their leave calculation for all 48-hour employees. The calculation should be based on a 40-hour week and accrue leave at 9.6 hours per day. This allows for equity among all employees despite the number of hours that they work per week. The Director of Human Resources agreed that the accruals were being calculated incorrectly and modified the accrual rates effective January Condition 2: Dual Time Entry Resulting In Overcompensation Employees can be overcompensated when hours are recorded in both TeleStaff and the CTS. In the course of interviews it was disclosed that several DFRS employees had received duplicate payroll payments. The issue was brought to the attention of the payroll office, investigated and an adjustment was made to recover the overpayments. Additionally, a duplicate payment for holiday hours occurred when an employee, who normally records time in the CTS, was also scheduled in TeleStaff and the hours were rolled up for payroll processing. Field employees of DFRS receive Holiday Time Paid (HTP) when a holiday occurs. Holiday pay (HOL) is automatically populated in the CTS for an employee using the CTS. It was noted that a DFRS employee received both HOL hours and the HTP hours when time was recorded in both TeleStaff and the CTS. Payroll now has a mechanism to capture any duplicate time entries recorded for the same day for CTS employees and this control should mitigate the risk. TeleStaff hours do not appear in the CTS until exported from TeleStaff for processing that might require a correction in TeleStaff system by the Administrative Aide. Recommendation 2: Time Should Be Recorded In Only One System To avoid duplicate payments we recommend that DFRS employees use only one system to record their hours. Frederick County Internal Audit 7

10 Condition 3: Interface Errors Between Telestaff And County Time System The interface between TeleStaff and the CTS continues to generate errors thus requiring manual adjustments to the hours reported and corrections to the interface program. Due to the complexity and unique requirements for DFRS there will probably always be isolated instances which require manual corrections; however, the system should be able operate sufficiently to provide reasonable assurance that routine scheduling is correct. Recommendation 3: Systematic Resolution Of Interface Errors Needed We recommend that a systematic approach be taken to resolve errors including: Documenting the errors discovered by the DFRS' Administrative Aide or the Payroll Technician Forwarding the errors to the CTS programmer for resolution; and, Documenting the methods of resolution This should be continued until all parties believe that a satisfactory level of confidence in the data exchange between the systems is achieved. When a level of confidence is reached, we advise the DFRS' Administrative Aide to review and revise the current procedures to achieve a more efficient, less time consuming process. VII. Responses See attached response. Frederick County Internal Audit 8

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