Follow-up Audit Report on the Opportunities

SUMMARY OF FINDINGS AND CONCLUSIONS

The City is facing a major budget crisis. The February 2002 Preliminary Budget for Fiscal Year 2003 identified a deficit of $4.7 billion. The Executive Budget, released April 17, increased that estimate to nearly $5 billion. On May 9, 2002, the New York City Comptroller estimated that the total deficit for Fiscal Year 2003 would be more than $6 billion. Under these circumstances, all of the City’s expenditures must be examined more closely than ever in an effort to help ease the crisis.

As part of its effort to deal with this $6 billion budget gap, the City is seeking a waiver from the federal government to reduce the required headcount stipulated in the Federal Crime Bill, from 40,710 to 39,110 uniformed officers, a decrease of 1,600. It should be noted that these figures do not reflect the number of uniformed officers in the Police Department on average, but are rather peak figures at moments in time in order to meet funding requirements under the Federal Crime Bill. In fact the Executive Budget submitted on April 17^th proposes a figure of 36,878 uniformed officers by the end of Fiscal Year 2003. The Executive Budget includes a footnote indicating that the earlier-mentioned 39,110 figure would only be achieved with the swearing in of a new class of police cadets on July 1, 2002. By comparing the figure of 36,878 officers that the Police Department expects to achieve by June 30, 2003, with the actual headcount of 37,896 officers as of February 28, 2002, the Police Department would realize a reduction of only 1,018 uniformed officers. As all of these figures indicate, the actual uniformed headcount in the Police Department changes from day to day. The actual budget impact of a reduction in the headcount would therefore depend upon the dates in which the uniformed officer headcounts are tabulated.

Implied in the Fiscal Year 2003 Executive Budget is that the entire reduction in uniformed officer headcount would come from officers performing enforcement functions. This implication is derived from the current plan component that would mitigate the enforcement reduction "pain" by incorporating the hiring of 800 civilians. These 800 civilians would then presumably free 800 uniformed officers performing administrative functions so that the net reduction on the enforcement strength would only be 800 uniformed officer positions instead of 1,600. Of course, the budget reduction under this approach is not as dramatic. Instead of realizing savings equal to the cost of 1,600 uniformed officers, the savings are only the salaries of 800 uniformed officers, plus the savings related to the total compensation difference between 800 officers and 800 civilians.

The Executive Budget also includes a Contingency Plan, which eliminates that civilianization component by not permitting the hiring of 800 civilians and by delaying the new police class from July 1, 2002 to January 1, 2003, thereby increasing budget savings. As all of the above indicates, the Police Department’s strategy in its efforts at civilianization is directly linked to federal funding, the City’s budget process, and to an approach that indicates that any reduction in the overall uniformed headcount would come from the enforcement function. On the one hand, the Police Department shows that it can lower the number of uniformed officers by 1,600, but on the other hand states it can minimize the impact on the enforcement function by civilianizing 800 positions.

We disagree with this approach to civilianization. Our position in this report, as in our previous audit report on this issue, is that the Police Department must adopt a policy recognizing that savings are achievable through civilianization, purely and simply. Regardless of what the uniformed headcount is in reference to requirements under the Federal Crime Bill or the budget process, the most important figure from a crime-fighting perspective is the total number of police officers available to protect the public.

What needs to be recognized is that no matter what the baseline uniformed officer headcount might be, and no matter what portion of that headcount is used for enforcement, additional savings are always available as long as there are uniformed officer positions that are civilianizable. The Police Department’s logic in this budget process has been to say, "We will reduce enforcement by 1,600 positions, but if you let us hire 800 civilians we will only have to reduce enforcement by the remaining 800 positions." In contrast, our logic would be: "800 uniformed positions can be civilianized, resulting in savings of $X. In addition, enforcement will be reduced, if necessary, by Y positions." As will be discussed in more detail below, this audit identifies 831 civilianizable positions (see Table I below), in addition to the 800 positions that the Police Department has already identified. We believe that the budget process should: (1) recognize the savings from the total of 1,631 positions; (2) look at other administrative units where reductions are possible (see Table II at the end of this summary); and (3) reduce enforcement strength as a last resort and if necessary. Law enforcement has reduced the crime rate in this City and improved its quality of life in the last few years. If budget cuts are necessary in the Police Department, enforcement cuts should be the last, not the first cuts, made.

In the above context, the New York City Comptroller decided to revisit an issue that was covered in an audit a few years ago–the opportunity for cost savings by civilianizing many of the non-enforcement positions held by uniformed officers in the New York City Police Department. The Comptroller’s Office issued an audit report on February 1, 1999 entitled Audit Report on the Opportunities for Savings through Civilianization in the New York City Police Department, which recommended that the Police Department civilianize 1,257 positions–849 in administrative units and 408 in the precincts. We estimated at that time that a total of $36.2 million in annual cost savings could be realized by civilianizing these positions–$24.4 million in the administrative units and $11.8 million in precincts. The City’s current budget crisis convinced us that a follow-up review of the Police Department’s implementation efforts regarding our earlier recommendations would be a valuable and timely effort.

As we began our follow-up review in February 2002, the Police Department informed us that most of the 500 positions that the Department had civilianized since our previous audit report had been in the precincts and other enforcement commands, rather than in its administrative units. In addition, the Police Department informed us that all of the additional 800 positions that it now plans to civilianize in Fiscal Year 2003 are also located in the Department’s precincts and enforcement units. None of the civilianizing would occur in the Department’s administrative units.

As a result, we decided to review the cost implications of the Department having generally decided not to implement our earlier recommendation that 849 positions in 34 administrative units be civilianized. We reviewed the Payroll Management System as of February 14, 2002 in relation to the 34 administrative units analyzed during the previous audit. We compared the current staffing levels of uniformed officers and civilian personnel in these units, with the staffing levels and numbers of civilianizable positions identified during our earlier February 1, 1999 audit report. Based on current salary information in the Payroll Management System and the Fiscal Year 2003 Executive Budget, and fringe benefit information obtained from the Mayor’s Office of Management and Budget, we estimated the cost savings that the Police Department could achieve through an expanded civilianization effort. We recognize that functions may have changed to some extent in the 34 administrative units since the previous audit, but we nonetheless believe that our staffing level comparisons for these units can provide valuable insights into the further potential for cost savings through increased civilianization efforts by the Police Department.

In 26 of the 34 units we reviewed, we concluded there were many officer positions that can still be civilianized, and we now estimate that the Police Department could save over $15.2 million annually by employing civilians in 831 non-enforcement positions filled by uniformed officers as of February 14, 2002. In Table I in the report, we show the number of positions we currently conclude can now be civilianized in these 26 units and the associated cost savings.

Neither the previous audit nor this follow-up should be interpreted to mean that these 26 units are the only administrative units in the Police Department where civilianization is possible. Indeed, we still believe that the Police Department, as we recommended in the previous audit, should review all of its administrative (and enforcement) units to identify additional positions that can be civilianized.

During the course of this follow-up audit, we also noted a staffing increase since our earlier audit in 20 of the 34 administrative units. As shown in Table II in the report, these 20 units gained an additional 521 positions during this period.

1. The Police Department should review and civilianize the 831 positions identified in this report that are non-enforcement in nature and held by uniformed officers in administrative units.

2. The Police Department should conduct a comprehensive review of all of its administrative (and enforcement) units to identify additional civilianizable positions that would generate cost savings.

3. The Police Department should review these 20 administrative units to determine if the reassignment of some of the uniformed and civilian staff assigned to these units would be appropriate.

The matters covered in this report were discussed with Police Department officials during and at the conclusion of this audit. A preliminary draft report was sent to Police Department officials on May 2, 2002 and was discussed at an exit conference held on May 9, 2002. On May 13, 2002, we submitted a draft report to Police Department officials with a request for comments. We received a written response from the Police Department on May 24, 2002.

In its response, the Police Department acknowledged the importance of civlianization, but stated that it has a process in place to identify positions that can be civilianized. The Department also agreed with the "spirit" of the audit, but raised questions about the report’s methodology and conclusions. The Department stated that "civilianization is at the forefront of Police Commissioner Raymond W. Kelly’s agenda. The Police Commissioner has, in fact, already identified 800 positions that can be civilianized." The Police Department also stated that "the Department is engaged in ongoing review of the civilianization process. While the Department agrees in spirit with the Comptroller’s audit, there are some concerns that need to be addressed. Our response includes comments concerning the audit’s methodology, findings, and recommendations." The Department further stated that "the audit draft report is the result of a follow-up to a prior audit on the same subject. … Unfortunately this audit builds on the previous report and suffers from many of the same shortcomings. Consequently, the Department must question some of the audit’s findings."

The Police Department "acknowledges that there are numerous positions within administrative units that are suitable for civilianization. The Department’s Office of Civilianization is reviewing position task statements from its most recent survey of administrative units in order to enhance the civilianization process. In addition, the Police Commissioner has identified 800 positions [in enforcement units] for immediate civilianization."

It is noteworthy that the Police Department’s response continues to emphasize the Department’s plans to civilianize 800 positions in the enforcement units. These plans are commendable. However, while the Police Department recognizes that there are also civilianizable positions in the administrative units, in its response to this audit the Department did not provide us with any figures on how many civilianizable positions it identified in these units or with any specific plans to civilianize these positions.

The Police Department raised certain concerns about the methodology we used for this report. Its first objection is that we did not review the function of each individual position in each of the 34 administrative units we analyzed. It stated that since we "did not examine the duties being performed by the incumbents of the positions … [we] could not know, with precision, if a position was civilianizable or not." However, we believe that while functions may have changed in the 34 units to some extent since our 1999 report, an overview-type analysis (that does not review every administrative position in the Department) of the current uniformed and civilian staffing levels in these units can provide valuable insights into the potential for cost savings through increased civilianization efforts. Our objective was not to identify "with precision" exactly how many positions in these units can be civilianized, but rather to determine the likelihood that there are still a substantial number of positions in the Police Department’s administrative units that the Department’s current civilianization plans are not addressing. We note, as stated earlier, that the Department critiqued our methodology for deriving the 831 positions figure, but did not offer its own figure, despite claims that it is involved in an "ongoing review of the civilianization process."

The Department’s second objection is that we based our current analysis (as we did in our last audit) on a 1990 Police Department report issued by then Commissioner Lee Brown and entitled Staffing Needs of the New York City Police Department (Staffing Needs Report). That report, which concluded that many of the officer positions in these 34 administrative units should be civilianized, served as the cornerstone for our previous audit and this follow-up audit. The Police Department stated that new crime reduction strategies have changed the functions of these units, thereby making it inappropriate to rely on the earlier Staffing Needs Report. However, most of the administrative units we reviewed are not likely to have changed dramatically over time. In fact, 33 of these 34 units still exist. Further, even as police strategies changed, it is unlikely that there would have been substantial changes in the functions of such units as the Fleet Services Division, the Building Maintenance Section, the Equipment Section, the Audit and Accounts Section, the Barrier Section, the Property Clerk Division, and many, if not most, of the other administrative units we reviewed.

The Department’s third objection to this report is our use of the City’s Payroll Management System rather than internal personnel rosters to conduct our review. It stated that the information in the Payroll Management System should have been verified against Police Department rosters. However, the Police Department does not clearly explain why rosters should be more reliable than the Payroll Management System.

The Police Department had previously provided us with personnel rosters for seven of the 34 administrative units. To evaluate the validity of the Department’s objection, we compared the results of our review of these units in the Payroll Management System with these rosters. Although the Police Department prepared these rosters in April of 2002, and we reviewed Payroll Management System information as of February 14, 2002, for four of the seven units the numbers of uniformed officers were exactly the same, and for one unit the number of officers only decreased slightly from 122 officers in the Payroll Management System in February to 120 officers on the roster in April.

For the other two units, we reviewed Payroll Management System data as of the April dates of these units’ rosters. According to the Payroll Management System, the numbers of officers changed slightly in these units between February and April 2002 (decreasing from 202 to 197 officers in one unit, and increasing from 21 to 23 officers in the other unit). However, the April personnel rosters for these units only identified 150 officers in the first unit (a disparity of 47 positions) and nine officers in the second unit (a disparity of 14 positions). The Police Department states that Payroll Management System data on a unit will include officers "temporarily assigned" to the unit, but implies that the personnel roster for a unit would not include such officers. However, the Department does not go further in explaining the disparity and does not, for example, state the length of time an officer might be temporarily assigned to a unit. In addition, proper internal controls would suggest that unit information in the Payroll Management System should correspond to unit information on personnel rosters.

As part of this Payroll Management System related objection, the Police Department argued that the size of units is subject to change. For example, the Police Department stated that "the Payroll Management System indicates that there are 72 uniformed employees assigned to this unit; however, the unit has only 21. … The PMS number included employees who are only temporarily assigned to the Highway District Office for training pending reassignment to a sub-unit." Our review of the Payroll Management System as of May 28, 2002 showed 53 uniformed officers assigned to this unit (down only 19 from the 72 uniformed officers in this unit as of February 14, 2002). However, even when officers temporarily or permanently assigned to an administrative unit are transferred, one cannot assume that they necessarily return to an enforcement unit. Those officers already engaged in administrative or support work are just as likely, if not more likely, to be reassigned to a related administrative or support function in another unit or sub-unit.

The Police Department’s fourth objection is that some of the officers assigned to these units were limited capacity or restricted duty officers (i.e., officers who are medically incapable of performing full enforcement duties) and therefore held positions that were not civilianizable. The issue of officers being assigned to limited capacity, restricted duty, or modified assignment was addressed in our previous audit. While we accepted the Police Department’s argument that the positions held by officers placed on modified assignment (i.e., officers who are being investigated for alleged improprieties) were not civilianizable, we did not accept the argument that the positions held by limited capacity or restricted duty officers were not civilianizable. The previous audit identified several limited enforcement functions to which limited capacity and restricted duty officers could be assigned. These included such positions as desk officer, assistant desk officer, arrest processing officer, and operations coordinator. Most of the work associated with these positions is located within precinct offices and does not involve outside patrol duties.

In its response, the Police Department also notes that while it civilianized over 3,000 positions from the 1990s to the present, its high civilian turnover rate counteracted these civilianization efforts. This statement reflects one of our concerns about the Department’s general philosophy regarding civilianization. For any civilianization effort to be successful, the Department must take the necessary steps to replace departing civilians with other qualified civilians, rather than revert to a preceding situation and return these positions back to uniformed officers for extended periods of time. The Department must also take steps to reduce civilian turnover as much as possible.

In response to our recommendation that the Police Department review those 20 administrative units that we identified as having experienced an increase in staff since the previous audit, the Police Department stated that it reviewed the staffing levels in some of these units, and provided explanations for four units with relatively large staff increases. We commend this review and suggest that it be extended to all of the Department’s administrative units that experienced an increase in staffing. Through enhanced civilianization and efficiency efforts, the Police Department will be better positioned to maintain the quality of its police services while contributing much needed savings for the City’s budget.