AUSTIN (KXAN) — Austin’s 20th century human resources management and payroll system appears to be the root of thousands of dollars in waste, according to a June audit. And the problem could be larger.
According to a city auditor “special report,” an Austin Energy employee was mistakenly promoted to an overtime-eligible position. The employee earned $6,000 in overtime that was never supposed to be given. The city’s human resources compensation division did not fully review documentation, resulting in the “waste,” the audit states.
Though $6,000 isn’t much compared to Austin’s overall budget, the report hints at a broader issue that could cost millions of dollars to improve.
Austin, a global technology hub, has a city government that still relies on a 1997 payroll and human resources management system. The city’s current system requires significant amounts of paper, according to an internal city report obtained by KXAN, and it also calls for manual data entry that increases the risk of fraud, waste and abuse, the audit states.
Debbie Maynor, an assistant director of Human Resources, said the city’s current system is “cumbersome and difficult to use.” Maynor has only worked with the city for four months. The errors noted in the audit occurred between June 2014 and February 2015. Maynor said the city is looking into purchasing a new overarching “human capital management system” that would automate and streamline many of the processes still done by hand in Austin.
The oversight reported in the audit began at Austin Energy. Austin Energy passed the erroneous paperwork to corporate human resources, and they overlooked the mistake as well, according to the audit.
“Human resources department management recognizes that the Compensation staff, who review and process information, were falling behind on their day-to-day work. Prior to receiving the results of this audit, HRD management had taken steps to address workload, specifically hiring temporary staff to assist with the review of department data,” wrote Dexter Robinson, with Austin Energy, and Maynor, in a letter to the city auditor.
Corporate human resources compensation employees also told auditors they were not fully reviewing all paperwork associated with employee promotions, before approving changes. In addition, auditors found the compensation division did not closely review monthly error reports, which also would have identified the error.
And when auditors checked those monthly error reports themselves, they “noticed records for other employees that could reflect similar errors to the one identified in this report.”
The human resource department has been reviewing individual cases to see if any similar errors were made, but there haven’t been any additional situations found yet that resulted in erroneous awarding of overtime payment, Maynor said.
She added that the city has been working for nearly 30 days to improve the formatting of the error reports, so they can be reviewed more easily. She said staff has been “diligent” in entering data.
Along with the outdated management system, more than 13,000 city employees fill out paper time sheets that are manually entered into computers, according to the city.
Numerous city employees from multiple departments had complained that the city’s use of paper time sheets and manual data entry was outdated and inefficient, according to internal comments obtained by KXAN through the Texas Public Information Act.
In January, city officials told KXAN that a transition to a comprehensive, cloud-based system would be labor intensive and cost millions of dollars.
About four years ago, the city embarked on a pilot program aimed at reducing the amount of paper used by certain classes of employees.
A pilot program communication referencing the use of paper time sheets and manual entry said, “the cash-plus-productivity cost is estimated to be in the hundreds of thousands of dollars.”