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HomeMy WebLinkAboutMINUTES - 08252015 - C.39RECOMMENDATION(S): APPROVE the response to Civil Grand Jury Report No. 1511, "County Timekeeping Practices" and DIRECT the Clerk of the Board to forward the response to the Superior Court no later than September 6, 2015. FISCAL IMPACT: No fiscal impact, this is an informational report. BACKGROUND: On June 8, 2015, the County received the 2014-15 Civil Grand Jury Report No. 1511 entitled, "County Timekeeping Practices". The report was received by the Board of Supervisors and subsequently referred to the County Administrator on the June 16, 2015 Board of Supervisors agenda (Item no. C.151) who prepared the attached response that specifies: Whether the respondent agrees or disagrees wholly or partially with each finding; if the respondent disagrees with a finding, a statement explaining the portion of the finding that is disputed and the reasons for the disagreement; APPROVE OTHER RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE Action of Board On: 08/25/2015 APPROVED AS RECOMMENDED OTHER Clerks Notes: VOTE OF SUPERVISORS AYE:John Gioia, District I Supervisor Candace Andersen, District II Supervisor Mary N. Piepho, District III Supervisor Karen Mitchoff, District IV Supervisor ABSENT:Federal D. Glover, District V Supervisor Contact: Lisa Driscoll, County Finance Director (925) 335-1023 I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown. ATTESTED: August 25, 2015 David Twa, County Administrator and Clerk of the Board of Supervisors By: Stephanie L. Mello, Deputy cc: Robert Campbell, County Auditor-Controller, Harjit S. Nahal, Assistant County Auditor, Elizabeth Verigin, Assistant County Auditor C. 39 To:Board of Supervisors From:David Twa, County Administrator Date:August 25, 2015 Contra Costa County Subject:Response to Civil Grand Jury Report No.1511 "County Timekeeping Practices" BACKGROUND: (CONT'D) > whether each recommendation has been implemented, has not been implemented, or requires further analysis; and if the recommendation requires further analysis, a statement explaining the scope and parameters of the analysis or study, and a time frame, not to exceed six months, for the matter to be prepared for discussion. The Board of Supervisors is required to respond to Findings F2-F4 and F7-F10 and to Recommendations R1, R2, R4, R5, R7, and R9. The Auditor-Controller is required to respond to Findings F1 and F4-F6 and Recommendations R3, R6, and R8. Attached is the combined response. CONSEQUENCE OF NEGATIVE ACTION: In order to comply with statutory requirements, the Board of Supervisors must provide a response to the Superior Court no later than September 6, 2015 (90 days after receipt). The Board must take action no later than the August 25, 2015 meeting in order to comply with the statutory deadline. CHILDREN'S IMPACT STATEMENT: Not Applicable ATTACHMENTS Grand Jury Report No. 1511 Response to Grand Jury Report No. 1511 Contra Costa County 2014-2015 Grand Jury Report 1511 Page 1 Grand Jury Reports are posted at http://www.cc-courts.org/grandjury Contact: Sherry Rufini Foreperson 925-957-5638 Contra Costa County Grand Jury Report 1511 County Timekeeping Practices Need for Accuracy in Reporting Time & Remedies for Inaccuracy TO: The Contra Costa County Board of Supervisors Contra Costa County Auditor-Controller SUMMARY A critical function of any business or government agency is to ensure that its employees are properly compensated based on the time and services that they have provided. To do so, employers must have a system in place for employees to record time worked, as well as job functions performed, since pay for a job classification may vary based on the work an employee carries out. The elements of timekeeping must allow for enough flexibility to accurately capture schedules and duties that earn additional pay. However, the more elaborate the timekeeping system, the more difficult it is for employees to accurately record time worked and specific work performed. Difficulties can lead to errors, which may be the result of inadequate training, lack of knowledge of changes and updates, or simple misunderstandings. It may also open the door to deliberate misstatement of time worked and duties performed. Both honest errors and deliberate falsification can be identified by operational timekeeping audits and through inquiries or complaints from other employees. The latter method of identification requires an avenue for employees to report instances of perceived abuse without fear of retaliation, a program. However errors are identified, immediate response is essential to prevent abuse from becoming widespread. Errors can be minimized by thoroughly training employees at hire, and then at regular intervals during their employment to provide updates and changes. Allegations of deliberate falsification must be immediately and thoroughly investigated, with consistent enforcement of consequences. While Contra Costa County (the County) timekeeping system is complex, timekeeping training for new hires is inconsistent and inadequate. Department Contra Costa County 2014-2015 Grand Jury Report 1511 Page 2 Grand Jury Reports are posted at http://www.cc-courts.org/grandjury operational audits do not include any review of how time worked is recorded. The County does not have a whistleblower program to report suspected timekeeping abuse or fraud. The following actions could help correct these weaknesses: Provide more thorough and consistent timekeeping training. Include attestations of accuracy on timesheets. Require oversight by supervisors or managers. Include timekeeping in operational audits, and recommend corrective retraining as needed. Educate employees about whistleblower procedures. Institute a link to the whistleblower program on the County intranet. The focus of this report is the timekeeping practices, obligations and responsibilities for accuracy, and remedies for timekeeping errors and suspected abuse and/or fraud. BACKGROUND Contra Costa County has more than 10,500 employees. Of these employees, roughly 80% are full or part time salaried employees and 20% are hourly employees. Salaried employees earn additional pay under various circumstances. Some of the more common examples of the 230 variable timekeeping pay codes are overtime pay, shift differential pay, hazard pay, on-call pay, and call-back pay. The County has a monthly pay cycle that runs on the 10th of the month for salaried employees. These employees may opt to receive up to one-third of their monthly pay as an advance on the 25th of the month preceding the regular pay cycle for the payment. Most salaried employees have chosen to receive this advance. County employees who are hourly are on a semi-monthly pay cycle. These employees receive their pay on the 10th and 25th of the month. This pay cycle structure adds one of many levels of complexity to the payroll system. In the late 1990s, technology made the process of timekeeping and payroll an automated function allowing for consolidation of timekeeping and payroll systems. The County began a staged rollout of a system called Kronos to County Departments in 1998 with the final department going on-line in 1999. However, before this rollout began, the initial implementation of the Kronos system revealed that, as configured, Kronos would not be operationally feasible for the County because it only allowed the input of timekeeping data one employee at a time. With 10,300 County employees at that time, single employee entry input was not practical. The Auditor-Co office worked with Kronos and developed the Rapid Data Entry system as a solution. The Rapid Data Entry system allowed departments to select multiple employees within a department or division and enter individual employee time codes on a single data entry screen. Kronos and Rapid Contra Costa County 2014-2015 Grand Jury Report 1511 Page 3 Grand Jury Reports are posted at http://www.cc-courts.org/grandjury Data Entry systems are still in use today. Together these systems send the timekeeping data to the County payroll program called PeopleSoft. The potential for timekeeping fraud is prevalent due to confusion about pay code use. Different clerks may enter information about the same work performed by the same position but using different pay codes, resulting in incommensurate pay or benefits. For example, employees may incorrectly receive pension compensable time for time that should not be coded as pension compensable. Timekeeping audits are not performed on timekeeping records to ensure accuracy. If a County employee suspects fraud or other timekeeping abuses taking place, the employee has no readily available avenue for reporting it. The County does not have its own whistleblower policy or procedures in place. DISCUSSION Timekeeping in the County is complex due to the large number of employees, multiple bargaining units and a high degree of decentralization. At least 28 departments operate independently throughout the County. Fifteen unions with 19 Memoranda of Understanding (MOU) create 30 bargaining units, and generate approximately 90 different sets of rules for the application of the various pay codes within each position in the County. Of the 10,500 employees, approximately 80% are full or part time salaried employees, while the remaining 20% are hourly employees. Job description and pay grade determine compensation for the salaried employees. Many of these employees are eligible for variable compensation, which is determined by the governing MOU. These detail types and rates of compensation applicable to the variable pay codes. Currently there are 230 timekeeping pay codes in effect. The Coun current system is based on employees manually recording their time on a timesheet or timecard. The timesheet, which is signed by the employee and the supervisor or manager, contains no attestation or certification of accuracy by either. The addition of an attestation is widely accepted to be a strong deterrent against abuse or fraud and mandates review and verification by management. To date, the County has not implemented a way to verify the accuracy of a timesheet. The information from the timesheet is then entered by a pay clerk who assigns a pay code that he or she interprets to be correct. The Auditor- Office runs payroll queries that have caught inaccurate timecode entries. An example is when employees performing exactly the same work, but in different locations, have had their work assigned to different pay codes because different pay clerks, even in the same department, may not share the same interpretation of the pay code. However, not all inaccuracies are identified by these queries. In a 2013 Contra Costa Times column, Daniel Borenstein, wrote that doctors at the Regional Medical Center were receiving on-call pay when they were actually not on-call. Because of this article, the Auditor- Office has since Contra Costa County 2014-2015 Grand Jury Report 1511 Page 4 Grand Jury Reports are posted at http://www.cc-courts.org/grandjury increased the number of payroll queries, but does not include timekeeping records as part of these operational audits. With over 50 payroll clerks entering pay codes for over 10,500 employees, governed by 19 different MOUs, centralized training is not feasible. However, department- specific procedures could be codified and made available. Without these written procedures, employees who fill out their own timesheets are left to be trained by payroll clerks, supervisors, or managers, many of whom have not themselves received department-specific training. Beginning in 2012, the County began working with ADP, an industry-leading payroll service, to update their payroll and timekeeping systems. One critical aspect of a new system is the implementation of a scheduling system. The ADP version is called eTime scheduler and is a component of the timekeeping system. In anticipation of rolling out a new timekeeping system, the County Office released Administrative Bulletin 435. This bulletin establishes policy, procedures, and criteria, for the evaluation, authorization, and implementation for the already-existing 9/80 work schedules. A 9/80 work schedule allows an employee to work 80 hours in nine days instead of ten days. Its purpose, as outlined in this bulletin is to enhance County service and accommodate employee lifestyle and work preference while not adversely affecting the interest of the County, departments, other employees, or the These schedules, in conjunction with existing County-approved schedules, bring the total number of approved schedule patterns to 917 (see Appendix A). Of these 917 approved patterns, currently 661 patterns are in use. This number of schedule patterns adds a higher degree of complexity to an already complex system. At the time of this report, ADP has not been able to meet the need for a comprehensive timekeeping system. This situation is due to the complexity created by the number of time codes allowed under the operating MOUs, the number of schedules available to employees and the advance payment option. The delay in implementing the new timekeeping system led to the Auditor- Office developing a Time Schedule Collection W ebsite to use in the interim. In March of 2014, all County departments were instructed to input and maintain full and part-time schedules on the Time Schedule Collection Website until implementation and rollout of the ADP eTime system. Currently only 4,723 employees (56.7%) of the 8,326 employees whose timekeeping will be tracked by the ADP eTime system have a schedule in this website. W hile failure to properly use the Time Schedule Collection Website may open the door to timekeeping mistakes or fraud, the County does not have its own whistleblower policy or any publicized procedures for employees to report such instances. Contra Costa County 2014-2015 Grand Jury Report 1511 Page 5 Grand Jury Reports are posted at http://www.cc-courts.org/grandjury FINDINGS F1. County employees record their time on timesheets or timecards. F2. County employees and their supervisor or manager are not required to attest to the accuracy of their timesheets or time cards. F3. The County has not implemented a method to verify the accuracy of timesheets and timecards. F4. Pay clerks sometimes enter inaccurate pay codes due to misunderstandings, lack of training, and lack of department-specific codified procedures. F5. In March of 2014, County departments were directed to maintain emp schedules in the County-developed Time Schedule Collection Website. F6. Currently, only 4,723 (56.7%) of the 8,326 employees have schedules in the Time Schedule Collection Website. F7. The County encounters difficulty in tracking and recording appropriate time and pay codes due to the complexity of its timekeeping structure. F8. The County does not have its own whistleblower policy or procedures in place for employees to report suspected timekeeping fraud. F9. Deficiencies in timekeeping practices are not systematically identified and corrected because operational audits do not include timekeeping practices and payroll queries are not sufficiently comprehensive to identify all deficiencies. F10. The County has a semi-monthly pay cycle for hourly employees and has created what amounts to a semi-monthly pay cycle for salaried employees by allowing these employees the option to take up to a one-third advance. RECOMMENDATIONS R1. The County should require timesheets or the system of time reporting to include a signed attestation of accuracy from the reporting s supervisor or manager. R2. The County should require department supervisors or managers to periodically review attendance and time records to ensure both accuracy and completeness. R3. The Auditor-consider codifying timekeeping and pay code procedures for each department, and identifying funds to do so. R4. The County should make timekeeping and pay code procedures promulgated by the Auditor-, along with associated training, available to all payroll clerks and included in the new employee orientation. Contra Costa County 2014-2015 Grand Jury Report 1511 Page 6 Grand Jury Reports are posted at http://www.cc-courts.org/grandjury R5. The County should direct all departments to place salaried employees in the Time Schedule Collection Website as required in the March 6, 2014 bulletin from the office of the Auditor-Controller. R6. The Auditor-ways to reduce the number of pay codes to a more manageable level. R7. The County should consider developing whistleblower procedures for employees reporting suspected timekeeping fraud, posting these procedures on the County intranet, and identifying funds to carry out these activities. R8. The Auditor- should consider including timekeeping practices in operational audits and recommending corrective action for all timekeeping deficiencies identified and identifying funds to carry out these activities. R9. The County should adopt a semi-monthly pay cycle for all employees which will eliminate the need for an option to take a monthly advance. REQUIRED RESPONSES Findings Recommendations Contra Costa County Board of Supervisors F2, F3, F4, F7, F8, F9, F10 R1, R2, R4, R5, R7, R9 Contra Costa County Auditor-Controller F1, F4, F5, F6, R3, R6, R8 Contra Costa County 2014-2015 Grand Jury Report 1511 Page 7 Grand Jury Reports are posted at http://www.cc-courts.org/grandjury Appendix- A Contra Costa County 2014-2015 Grand Jury Report 1511 Page 8 Grand Jury Reports are posted at http://www.cc-courts.org/grandjury Contra Costa County 2014-2015 Grand Jury Report 1511 Page 9 Grand Jury Reports are posted at http://www.cc-courts.org/grandjury Contra Costa County 2014-2015 Grand Jury Report 1511 Page 10 Grand Jury Reports are posted at http://www.cc-courts.org/grandjury Contra Costa County 2014-2015 Grand Jury Report 1511 Page 11 Grand Jury Reports are posted at http://www.cc-courts.org/grandjury Contra Costa County 2014-2015 Grand Jury Report 1511 Page 12 Grand Jury Reports are posted at http://www.cc-courts.org/grandjury Contra Costa County 2014-2015 Grand Jury Report 1511 Page 13 Grand Jury Reports are posted at http://www.cc-courts.org/grandjury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  BOARD OF SUPERVISORS RESPONSE TO CONTRA COSTA COUNTY GRAND JURY REPORT 1511: County Timekeeping Practices FINDINGS F1. County employees record their time on timesheets or timecards. Response: The respondent agrees with the finding. County employee timesheets may be paper or electronic. F2. County employees and their supervisor or manager are not required to attest to the accuracy of their timesheets or time cards. Response: The respondent partially disagrees with the finding. County employees and their supervisor or manager are required to sign their timesheets or time cards attesting to the accuracy of their submittals. Additionally, there are processes in place to verify many of the items recorded on an employee’s timesheet or timecard, such as accrual usage that exceed an employee’s balance and posting overtime, holiday, flexible pay, and compensatory time off if the employee’s classification is ineligible to receive those pays. Presently, the Office of the Auditor- Controller and Department of Information Technology are working to expand the validation of timekeeping records prior to importing those records into the Payroll System so that ineligible pay items are rejected and reported for further review by departmental and central payroll staff. F3. The County has not implemented a method to verify the accuracy of timesheets and timecards. Response: The respondent disagrees with the finding. County Auditor-Controller payroll staff spend a significant number of hours each pay period to verify many of the items recorded on an employee’s timesheet or timecard, such as accrual usage that exceed an employee’s balance and posting overtime, holiday, flexible pay, and compensatory time off if the employee’s classification is ineligible to receive those pays. Presently, the Office of the Auditor-Controller and Department of Information Technology are working to expand the validation of timekeeping records prior to importing those records into the Payroll System so that ineligible pay items are rejected and reported for further review by departmental and central payroll staff. F4. Pay clerks sometimes enter inaccurate pay codes due to misunderstandings, lack of training, and lack of department-specific codified procedures. Response: The respondent agrees with the finding. F5. In March of 2014, County departments were directed to maintain employees’ schedules in the County-developed Time Schedule Collection Website. Response: The respondent agrees with the finding. 2    F6. Currently, only 4,723 (56.7%) of the 8,326 employees have schedules in the Time Schedule Collection Website. Response: The respondent agrees with the finding, as of May 2015. F7. The County encounters difficulty in tracking and recording appropriate time and pay codes due to the complexity of its timekeeping structure. Response: The respondent agrees with the finding. F8. The County does not have its own whistleblower policy or procedures in place for employees to report suspected timekeeping fraud. Response: The respondent partially disagrees with the finding. Although the County does not have a formal whistleblower policy in place, procedures exist for employees to report suspected timekeeping fraud. F9. Deficiencies in timekeeping practices are not systematically identified and corrected because operational audits do not include timekeeping practices and payroll queries are not sufficiently comprehensive to identify all deficiencies. Response: The respondent partially disagrees with the finding. See response to Finding F3. F10. The County has a semi-monthly pay cycle for hourly employees and has created what amounts to a semi-monthly pay cycle for salaried employees by allowing these employees the option to take up to a one-third advance. Response: The respondent partially disagrees with the finding. The advance that salaried employees receive is very different from a semi-monthly pay cycle. These employees are still salaried and may opt to take up-to one-third of their base salary as an advance on future pay. RECOMMENDATIONS R1. The County should require timesheets or the system of time reporting to include a signed attestation of accuracy from the reporting employee and employees’ supervisor or manager. Response: The recommendation has been implemented. Although the County does require timesheets to include a signed attestation of accuracy from the employee and employees’ supervisor or manager, corrections/edits that are made to timesheets by departmental and Auditor-Controller payroll staff are not returned to the employee/supervisor/manager to attest the accuracy of the changes made. R2. The County should require department supervisors or managers to periodically review attendance and time records to ensure both accuracy and completeness. Response: The recommendation has been partially implemented. The County continues to pursue technological improvements that will make review of attendance and time records easier. 3    R3. The Auditor-Controller’s Office should consider codifying timekeeping and pay code procedures for each department, and identifying funds to do so. Response: The recommendation will not be implemented because it is not warranted. The County has timekeeping and pay code procedures on a Countywide basis that are codified in the County’s Memoranda of Understandings and various Board adopted Resolutions. Each department has assigned payroll personnel and funding to implement those timekeeping and pay code procedures. R4. The County should make timekeeping and pay code procedures promulgated by the Auditor- Controller’s Office, along with associated training, available to all payroll clerks and included in the new employee orientation. Response: The recommendation will not be implemented as it is not warranted. The Auditor- Controller’s Office provides payroll training to departments on an as needed basis. Employees attending the new employee orientation are represented by many different bargaining groups, receive very different pays, and will work in different departments currently utilize different time capture methods. It would be very difficult and confusing to employees to include timekeeping training in such a setting. R5. The County should direct all departments to place salaried employees’ schedules in the Time Schedule Collection Website as required in the March 6, 2014 bulletin from the office of the Auditor-Controller. Response: The recommendation has been implemented. R6. The Auditor-Controller’s Office should explore possible ways to reduce the number of pay codes to a more manageable level. Response: The recommendation has been implemented. The Auditor-Controller’s Office has consistently explored ways to reduce the number of pay codes. As part of normal County operations, the Auditor-Controller’s Office is required to provide input on the establishment and necessity of all new, proposed pay codes. R7. The County should consider developing whistleblower procedures for employees reporting suspected timekeeping fraud, posting these procedures on the County’s intranet, and identifying funds to carry out these activities. Response: The recommendation will not be implemented because it is not warranted. Employees have a wide-range of opportunities to report suspected timekeeping fraud including reporting their suspicions to the Grand Jury. 4    R8. The Auditor-Controller’s Office should consider including timekeeping practices in operational audits and recommending corrective action for all timekeeping deficiencies identified and identifying funds to carry out these activities. Response: The recommendation will not be implemented. The Auditor-Controller’s Office conducts legally required audits based on government code. Departmental financial examinations are conducted on a preferred cycle attached to them based on their perceived amount of inherent risk. The Office of the Auditor-Controller does not perform operational audits; however, special audit projects have been conducted upon request by the County Board of Supervisors, County Administrator, and elected and appointed Department Heads. R9. The County should adopt a semi-monthly pay cycle for all employees which will eliminate the need for an option to take a monthly advance. Response: The recommendation will not be implemented. Semi-monthly pay cycles would require the agreement of all of the County’s bargaining units. To date, agreement has not been achieved. The County will continue to pursue this option in future bargaining. Contra Costa County 2014-2015 Grand Jury Report 1511 Page 1 Grand Jury Reports are posted at http://www.cc-courts.org/grandjury Contact: Sherry Rufini Foreperson 925-957-5638 Contra Costa County Grand Jury Report 1511 County Timekeeping Practices Need for Accuracy in Reporting Time & Remedies for Inaccuracy TO: The Contra Costa County Board of Supervisors Contra Costa County Auditor-Controller SUMMARY A critical function of any business or government agency is to ensure that its employees are properly compensated based on the time and services that they have provided. To do so, employers must have a system in place for employees to record time worked, as well as job functions performed, since pay for a job classification may vary based on the work an employee carries out. The elements of timekeeping must allow for enough flexibility to accurately capture schedules and duties that earn additional pay. However, the more elaborate the timekeeping system, the more difficult it is for employees to accurately record time worked and specific work performed. Difficulties can lead to errors, which may be the result of inadequate training, lack of knowledge of changes and updates, or simple misunderstandings. It may also open the door to deliberate misstatement of time worked and duties performed. Both honest errors and deliberate falsification can be identified by operational timekeeping audits and through inquiries or complaints from other employees. The latter method of identification requires an avenue for employees to report instances of perceived abuse without fear of retaliation, a program. However errors are identified, immediate response is essential to prevent abuse from becoming widespread. Errors can be minimized by thoroughly training employees at hire, and then at regular intervals during their employment to provide updates and changes. Allegations of deliberate falsification must be immediately and thoroughly investigated, with consistent enforcement of consequences. While Contra Costa County (the County) timekeeping system is complex, timekeeping training for new hires is inconsistent and inadequate. Department Contra Costa County 2014-2015 Grand Jury Report 1511 Page 2 Grand Jury Reports are posted at http://www.cc-courts.org/grandjury operational audits do not include any review of how time worked is recorded. The County does not have a whistleblower program to report suspected timekeeping abuse or fraud. The following actions could help correct these weaknesses: Provide more thorough and consistent timekeeping training. Include attestations of accuracy on timesheets. Require oversight by supervisors or managers. Include timekeeping in operational audits, and recommend corrective retraining as needed. Educate employees about whistleblower procedures. Institute a link to the whistleblower program on the County intranet. The focus of this report is the timekeeping practices, obligations and responsibilities for accuracy, and remedies for timekeeping errors and suspected abuse and/or fraud. BACKGROUND Contra Costa County has more than 10,500 employees. Of these employees, roughly 80% are full or part time salaried employees and 20% are hourly employees. Salaried employees earn additional pay under various circumstances. Some of the more common examples of the 230 variable timekeeping pay codes are overtime pay, shift differential pay, hazard pay, on-call pay, and call-back pay. The County has a monthly pay cycle that runs on the 10th of the month for salaried employees. These employees may opt to receive up to one-third of their monthly pay as an advance on the 25th of the month preceding the regular pay cycle for the payment. Most salaried employees have chosen to receive this advance. County employees who are hourly are on a semi-monthly pay cycle. These employees receive their pay on the 10th and 25th of the month. This pay cycle structure adds one of many levels of complexity to the payroll system. In the late 1990s, technology made the process of timekeeping and payroll an automated function allowing for consolidation of timekeeping and payroll systems. The County began a staged rollout of a system called Kronos to County Departments in 1998 with the final department going on-line in 1999. However, before this rollout began, the initial implementation of the Kronos system revealed that, as configured, Kronos would not be operationally feasible for the County because it only allowed the input of timekeeping data one employee at a time. With 10,300 County employees at that time, single employee entry input was not practical. The Auditor-Co office worked with Kronos and developed the Rapid Data Entry system as a solution. The Rapid Data Entry system allowed departments to select multiple employees within a department or division and enter individual employee time codes on a single data entry screen. Kronos and Rapid Contra Costa County 2014-2015 Grand Jury Report 1511 Page 3 Grand Jury Reports are posted at http://www.cc-courts.org/grandjury Data Entry systems are still in use today. Together these systems send the timekeeping data to the County payroll program called PeopleSoft. The potential for timekeeping fraud is prevalent due to confusion about pay code use. Different clerks may enter information about the same work performed by the same position but using different pay codes, resulting in incommensurate pay or benefits. For example, employees may incorrectly receive pension compensable time for time that should not be coded as pension compensable. Timekeeping audits are not performed on timekeeping records to ensure accuracy. If a County employee suspects fraud or other timekeeping abuses taking place, the employee has no readily available avenue for reporting it. The County does not have its own whistleblower policy or procedures in place. DISCUSSION Timekeeping in the County is complex due to the large number of employees, multiple bargaining units and a high degree of decentralization. At least 28 departments operate independently throughout the County. Fifteen unions with 19 Memoranda of Understanding (MOU) create 30 bargaining units, and generate approximately 90 different sets of rules for the application of the various pay codes within each position in the County. Of the 10,500 employees, approximately 80% are full or part time salaried employees, while the remaining 20% are hourly employees. Job description and pay grade determine compensation for the salaried employees. Many of these employees are eligible for variable compensation, which is determined by the governing MOU. These detail types and rates of compensation applicable to the variable pay codes. Currently there are 230 timekeeping pay codes in effect. The Coun current system is based on employees manually recording their time on a timesheet or timecard. The timesheet, which is signed by the employee and the supervisor or manager, contains no attestation or certification of accuracy by either. The addition of an attestation is widely accepted to be a strong deterrent against abuse or fraud and mandates review and verification by management. To date, the County has not implemented a way to verify the accuracy of a timesheet. The information from the timesheet is then entered by a pay clerk who assigns a pay code that he or she interprets to be correct. The Auditor- Office runs payroll queries that have caught inaccurate timecode entries. An example is when employees performing exactly the same work, but in different locations, have had their work assigned to different pay codes because different pay clerks, even in the same department, may not share the same interpretation of the pay code. However, not all inaccuracies are identified by these queries. In a 2013 Contra Costa Times column, Daniel Borenstein, wrote that doctors at the Regional Medical Center were receiving on-call pay when they were actually not on-call. Because of this article, the Auditor- Office has since Contra Costa County 2014-2015 Grand Jury Report 1511 Page 4 Grand Jury Reports are posted at http://www.cc-courts.org/grandjury increased the number of payroll queries, but does not include timekeeping records as part of these operational audits. With over 50 payroll clerks entering pay codes for over 10,500 employees, governed by 19 different MOUs, centralized training is not feasible. However, department- specific procedures could be codified and made available. Without these written procedures, employees who fill out their own timesheets are left to be trained by payroll clerks, supervisors, or managers, many of whom have not themselves received department-specific training. Beginning in 2012, the County began working with ADP, an industry-leading payroll service, to update their payroll and timekeeping systems. One critical aspect of a new system is the implementation of a scheduling system. The ADP version is called eTime scheduler and is a component of the timekeeping system. In anticipation of rolling out a new timekeeping system, the County Office released Administrative Bulletin 435. This bulletin establishes policy, procedures, and criteria, for the evaluation, authorization, and implementation for the already-existing 9/80 work schedules. A 9/80 work schedule allows an employee to work 80 hours in nine days instead of ten days. Its purpose, as outlined in this bulletin is to enhance County service and accommodate employee lifestyle and work preference while not adversely affecting the interest of the County, departments, other employees, or the These schedules, in conjunction with existing County-approved schedules, bring the total number of approved schedule patterns to 917 (see Appendix A). Of these 917 approved patterns, currently 661 patterns are in use. This number of schedule patterns adds a higher degree of complexity to an already complex system. At the time of this report, ADP has not been able to meet the need for a comprehensive timekeeping system. This situation is due to the complexity created by the number of time codes allowed under the operating MOUs, the number of schedules available to employees and the advance payment option. The delay in implementing the new timekeeping system led to the Auditor- Office developing a Time Schedule Collection W ebsite to use in the interim. In March of 2014, all County departments were instructed to input and maintain full and part-time schedules on the Time Schedule Collection Website until implementation and rollout of the ADP eTime system. Currently only 4,723 employees (56.7%) of the 8,326 employees whose timekeeping will be tracked by the ADP eTime system have a schedule in this website. W hile failure to properly use the Time Schedule Collection Website may open the door to timekeeping mistakes or fraud, the County does not have its own whistleblower policy or any publicized procedures for employees to report such instances. Contra Costa County 2014-2015 Grand Jury Report 1511 Page 5 Grand Jury Reports are posted at http://www.cc-courts.org/grandjury FINDINGS F1. County employees record their time on timesheets or timecards. F2. County employees and their supervisor or manager are not required to attest to the accuracy of their timesheets or time cards. F3. The County has not implemented a method to verify the accuracy of timesheets and timecards. F4. Pay clerks sometimes enter inaccurate pay codes due to misunderstandings, lack of training, and lack of department-specific codified procedures. F5. In March of 2014, County departments were directed to maintain emp schedules in the County-developed Time Schedule Collection Website. F6. Currently, only 4,723 (56.7%) of the 8,326 employees have schedules in the Time Schedule Collection Website. F7. The County encounters difficulty in tracking and recording appropriate time and pay codes due to the complexity of its timekeeping structure. F8. The County does not have its own whistleblower policy or procedures in place for employees to report suspected timekeeping fraud. F9. Deficiencies in timekeeping practices are not systematically identified and corrected because operational audits do not include timekeeping practices and payroll queries are not sufficiently comprehensive to identify all deficiencies. F10. The County has a semi-monthly pay cycle for hourly employees and has created what amounts to a semi-monthly pay cycle for salaried employees by allowing these employees the option to take up to a one-third advance. RECOMMENDATIONS R1. The County should require timesheets or the system of time reporting to include a signed attestation of accuracy from the reporting s supervisor or manager. R2. The County should require department supervisors or managers to periodically review attendance and time records to ensure both accuracy and completeness. R3. The Auditor-consider codifying timekeeping and pay code procedures for each department, and identifying funds to do so. R4. The County should make timekeeping and pay code procedures promulgated by the Auditor-, along with associated training, available to all payroll clerks and included in the new employee orientation. Contra Costa County 2014-2015 Grand Jury Report 1511 Page 6 Grand Jury Reports are posted at http://www.cc-courts.org/grandjury R5. The County should direct all departments to place salaried employees in the Time Schedule Collection Website as required in the March 6, 2014 bulletin from the office of the Auditor-Controller. R6. The Auditor-ways to reduce the number of pay codes to a more manageable level. R7. The County should consider developing whistleblower procedures for employees reporting suspected timekeeping fraud, posting these procedures on the County intranet, and identifying funds to carry out these activities. R8. The Auditor- should consider including timekeeping practices in operational audits and recommending corrective action for all timekeeping deficiencies identified and identifying funds to carry out these activities. R9. The County should adopt a semi-monthly pay cycle for all employees which will eliminate the need for an option to take a monthly advance. REQUIRED RESPONSES Findings Recommendations Contra Costa County Board of Supervisors F2, F3, F4, F7, F8, F9, F10 R1, R2, R4, R5, R7, R9 Contra Costa County Auditor-Controller F1, F4, F5, F6, R3, R6, R8 Contra Costa County 2014-2015 Grand Jury Report 1511 Page 7 Grand Jury Reports are posted at http://www.cc-courts.org/grandjury Appendix- A Contra Costa County 2014-2015 Grand Jury Report 1511 Page 8 Grand Jury Reports are posted at http://www.cc-courts.org/grandjury Contra Costa County 2014-2015 Grand Jury Report 1511 Page 9 Grand Jury Reports are posted at http://www.cc-courts.org/grandjury Contra Costa County 2014-2015 Grand Jury Report 1511 Page 10 Grand Jury Reports are posted at http://www.cc-courts.org/grandjury Contra Costa County 2014-2015 Grand Jury Report 1511 Page 11 Grand Jury Reports are posted at http://www.cc-courts.org/grandjury Contra Costa County 2014-2015 Grand Jury Report 1511 Page 12 Grand Jury Reports are posted at http://www.cc-courts.org/grandjury Contra Costa County 2014-2015 Grand Jury Report 1511 Page 13 Grand Jury Reports are posted at http://www.cc-courts.org/grandjury