Management Letter Seattle School District No. 1 September 1, 2012 – August 31, 2013
The District does not have sufficient controls in place to ensure that overtime and extra time is properly authorized and the fringe benefit for personal use of vehicles is accurately imputed.
The District employs 10 payroll analysts to review and process payroll of $475 million a year for 10,000 employees. The payroll department is responsible for processing overtime, pay under supplemental contracts or extra time, and imputing fringe benefit compensation for personal use of the District’s vehicles. The District anticipates that most errors in recording and authorizing overtime and extra time pay will be detected at the departmental level by immediate supervisors when approving timesheets. The District does not have policies or procedures in place for paying overtime or extra time to exempt employees. In addition, the District does not have sufficient controls to ensure that the fringe benefit for personal use of District owned vehicles is imputed correctly in the employees’ wages.
Overtime The District does not have a policy or procedure in place for paying overtime to exempt employees. The District does not seek guidance from the Compensation Analyst when assigning a pay rate for additional duties performed outside of an employee’s regular job function. The District relies on the discretion of the employee’s immediate supervisor to determine when overtime pay is due to exempt employees on a case by case basis. During our audit we noted 14 exempt level employees who received overtime pay of 1.5 times their regular rate for a total of 1,659 hours. In 11 instances we noted that overtime was paid for immediate duties and was not properly authorized. In three instances we noted employees were paid overtime for performing duties outside their immediate job function. These employees were paid one and a half times their regular pay rate instead of the applicable rate for the job function. Also, we noted no documentation showing that overtime was appropriate or necessary. Supplemental Contracts The District does not require written pre-authorization and justification for extra time from supervisors. We noted in-sufficient documentation of extra duties and/or the duration of additional assignments. Extra time or supplemental pay is awarded to non-represented employees on a case by case basis when an employee works outside the pay cycle or calendar days per the job function. We noted nine non represented employees were paid extra time for a combined