Management Letter Seattle School District September 1, 2012 through August 31, 2013
The District does not have sufficient procedures in place to make sure that only authorized supplemental compensation is paid to School Principals and Assistant Principals.
The District employees 191 employees who acted in the positions of Principal or Assistant Principal during school year 2013 and received $19.4 million in compensation. Of the total 191 employees in these two job functions, 104 received supplemental pay for a total of $183,095. This includes cell phone allowance of $46,000, certified administrative compensation of $116,205, and national standard and K8 certification pay in the amount of $20,390. Certified administrative compensation may be determined by the employee’s hourly rate and the number of additional hours worked, or based on a stipend amount under the purview of a collective bargaining agreement. During our audit we reviewed certified administration compensation and noted that $16,645 out of $116,205 was not earned. The Human Resource department is responsible for processing supplemental compensation pay and assuring that it is authorized, approved and supported by appropriate documentation. We noted that the procedures the department has currently in place are not sufficient to ensure supplemental compensation is paid appropriately. We recommend the District:
Implement procedures sufficient to assure that supplemental compensation paid is for authorized activities and in proper amounts.
Provide training to Human Resource department employees on preparing and processing documentation for supplemental compensation.
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.