Audit Report on the Management and Control of Overtime Costs at the Department of Health and Mental Hygiene

The Department of Health and Mental Hygiene (DOHMH) is composed of 13 divisions¹ and employed approximately 6,800 individuals during Calendar Years 2009 and 2010. Employees who are covered under the collective bargaining agreement (i.e., Citywide Agreement) between the City and DC 37 AFSCME and who hold certain civil service titles are eligible to earn overtime payments. In accordance with the Citywide Agreement and Fair Labor Standards Act (FLSA), all overtime beyond 40 hours actually worked by an employee is paid at a premium of time-and-a-half (excluding those designated as managers). During Calendar Year 2009, DOHMH paid a total of $8.3 million in overtime costs to 3,409 (49 percent) of its 7,010 employees, and during Calendar Year 2010, DOHMH paid $5.2 million in overtime costs to 2,035 (31 percent) of its 6,628 employees. The salary (including differentials) of all employees during Calendar Years 2009 and 2010 was approximately $359 million and $398 million, respectively.

This audit determined whether DOHMH: (1) appropriately approved, authorized, and paid overtime in compliance with City rules, regulations, and agreements; and (2) effectively managed and controlled its employee overtime costs.

Audit Findings and Conclusions

Our review found that DOHMH did not fully comply with its own procedures and other applicable rules governing approval, authorization, and payment of overtime. Specifically, DOHMH failed to obtain waivers for employees whose salaries exceeded the Citywide Agreement’s overtime cap. As a result, during Calendar Years 2009 and 2010, DOHMH paid a total of $3.7 million for overtime hours worked by ineligible employees (27 percent of the agency’s total overtime expenditure for both years exceeded the amounts allowed). In addition, our testing of the overtime of a sample of 29 employees over the course of a two-month period found minor discrepancies with the way DOHMH processed overtime hours in CityTime.

The audit also found that DOHMH lacks a centralized review process that would allow it to effectively monitor employees earning overtime and ensure that overtime is distributed equitably and to avoid potential abuse.

Audit Recommendations

To address these issues, we make five recommendations, including that DOHMH should:

• Comply with regulations governing employees whose salaries exceed the overtime cap. Specifically, DOHMH should either obtain appropriate waivers or credit employees with compensatory time rather than paid overtime.
• Create a centralized review process that would allow DOHMH to assess whether overtime is distributed equitably and to avoid potential abuse.

Agency Response

In its written response, DOHMH officials agreed with the audit’s five recommendations. However, DOHMH officials provided explanations regarding the total overtime amount paid to ineligible employees and the timeliness in providing the budgeted overtime figures. While acknowledging DOHMH’s explanations, we see no reason to alter our findings.