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Written by: Lake County News reports

Published: 18 December 2012

State Controller John Chiang on Tuesday said a review of the California Department of Parks and Recreation’s payroll process revealed managers and employees violated state policies and keyed in payroll without proper documentation or authority, creating the risk of abuse, fraud and overpayments.

“The deliberate disregard for internal controls along with little oversight and poorly-trained staff resulted in improper payouts to Parks’ employees,” said Chiang. “When security protocols and authorization requirements so easily can be overridden, it invites the abuse of public funds.”

The California Department of Parks and Recreation has been under increased scrutiny since this past summer, when the agency was found to have hidden away more than $50 million in park funds at a time when dozens of parks around the state – including Anderson Marsh State Historic Park in Lower Lake – were proposed for closure, as Lake County News has reported.

The discovery led to the resignation of Parks Director Ruth Coleman and the dismissal of three senior parks employees.

Gov. Jerry Brown subsequently ordered a full audit of the agency, and the state Department of Finance implemented new procedures to reconcile and confirm balances between the Controller’s Office and the governor’s budget.

Much of the Department of Parks and Recreation’s payroll problems that Chiang’s office discovered were related to “out-of-class” compensation, which Chiang said is a type of pay for employees who perform duties far outside the scope of their position.

This type of pay may only be used in limited circumstances, for a specific number of days and with documentation supporting the additional pay.

The review, which looked at the agency’s payroll processes for the period of July 1, 2009, through June 30, 2012, found that management circumvented rules and regulations regarding employees who were working out-of-class by keying in payments without receiving the proper approval or providing needed documentation.

During the period of review, 203 individuals received out-of-class compensation that totaled approximately $520,000.

Without sufficient documentation, the controller’s auditors were unable to determine how much, if any, of the payments were lawful.

However, the auditors did find that employees were paid out-of-class in excess of the number of days an employee may work out of class under state policies and collective bargaining agreements.

Some employees apparently performed back-to-back out-of-class assignments. One individual worked one such out-of-class assignment for the 120-day limit, then moved to another out-of-class assignment for an additional 120 days and then moved back into the original assignment, Chiang reported.

Twenty employees who were prohibited from receiving out-of-class for more than 365 days exceeded that time period, receiving an additional $46,000.

The review also found improper access to the payroll system. Last summer, the media reported on a number of unauthorized leave “buy-backs,” in which employees were inappropriately paid the cash value of their accrued vacation or other leave time.

The controller’s review found that approximately 90 percent of those unauthorized leave buy-backs were keyed by two Department of Parks and Recreation managers who used the payroll system without approved access.

In another finding, auditors determined that Department of Parks and Recreation employees who were out on disability leave were inappropriately given credit for the personal leave program.

The program requires employees take a 5 percent pay cut in exchange for eight hours of personal leave program/furlough credits per month.

The controller recommended Tuesday that Department of Parks and Recreation personnel remove all personal leave program credits from employees who received disability pay and were not subject to the 5 percent pay cut, or the personal leave program credit.

Finally, the review revealed that eight of 19 temporary intermittent employees who are limited to working only 1,500 hours per year exceeded that amount, resulting in $11,272 in extra pay.

Two of 16 permanent intermittent employees received approval to extend their work hours beyond the 1,500-hour limit; however, they exceeded the number of hours approved in their extensions at a cost of $548.

Eight of 340 retired annuitants working during the review period exceeded the limit of 960 hours per fiscal year at a cost of $5,810.

The controller recommended that the Department of Parks and Recreation set up a system to alert the employee and the employee’s manager when the employee nears exceeding the maximum number of hours per year they work.

The controller called upon the the Department of Parks and Recreation’s new management team to pursue reimbursement from employees who received compensation to which they were not lawfully entitled.

Chiang’s office plans to revisit the agency’s payroll process at a later date to ensure they are implementing this and the review’s many recommendations to strengthen internal controls over the payroll process.