A Compilation of Audits on Overtime Payments Made To Non-Pedagogical Civilian Employees

Audit Report In Brief

The City Comptroller’s Office has conducted a series of three audits on the administration and controls of overtime by City agencies. These audits focused on whether the agency in question appropriately approved overtime and paid such overtime to employees in compliance with its own policies and procedures, labor laws, and other City regulations and guidelines and effectively managed and controlled overtime costs. These audits focused on City personnel covered under the Citywide agreement for non-uniform or pedagogical personnel (uniformed personnel being Police, Fire, Correction officers, and certain other employees characterized as being uniformed).

Results

The three audits found a common theme in the management of overtime: the lack of compliance with key provisions of the City’s rules, procedures, regulations, and agency policies governing overtime. As a consequence, these agencies could not adequately determine whether overtime was being effectively utilized to achieve program goals.

We noted that the agencies did not generally request waivers from the Office of Labor Relations (OLR) for overtime that exceeds the overtime cap (Interpretive Memorandum #100). In each audit, we noted many instances where waivers that were required for employees to exceed the overtime cap were not requested by the respective agencies. Thus, excessive overtime spending above the cap became perfunctory instead of a planned strategy to help achieve agency program goals.

Finally, the audits found many instances where employees with 20 years or more of service or who were at least at the minimum retirement age were high-overtime earners.¹ This would affect the City’s future pension liability because the employees highest earnings over a consecutive three-year period are factored, in part, when determining the retirement benefit of an employee upon retirement. However, we did not find that employees at or over the minimum age for retirement or with 20 years or more of service were overly represented among the highest overtime earners. We are still concerned about the risk of potential overtime abuse and its associated additional costs, considering the weaknesses in controls over overtime found in our audits.

We make several recommendations in this report, which include that agencies should:

• Ensure that procedures set in place to manage and control overtime are implemented, enforced, and appropriately followed by agency management and staff as part of the agency’s normal day-to-day business functions. These procedures should be reviewed periodically and updated as required to reflect changes in management’s policies;
• Comply with regulations governing employees whose salaries exceed the overtime cap. Specifically, agencies should either obtain appropriate waivers or credit employees with compensatory time rather than paid overtime;
• Create a centralized review process that would allow agencies to assess whether the overtime is distributed equitably among employees to avoid potential abuse; and
• Ensure that a budget is created and kept up-to-date and used to collect, analyze, and monitor overtime spending.