Fort Worth Demanding Reimbursement From Employees Overpaid Due To Payroll Mess

FORT WORTH – Fort Worth officials are looking to recoup more than $250,000 from former employees who were overpaid because of problems with a new payroll computer system the city switched to about five years ago and human error.

Officials say the news was a “shock” to the employees, and some now face a financial jam.

The bulk of the money, $244,730, was paid to nine firefighters who left the department in 2013 and 2015, according a recent audit report. Of that, $193,921 was overpaid in 2013 and $50,809 in 2015, the report said. No overpayments were recorded in 2014. The audit covers the three years.

The audit also found $6,960 in overpayments to 11 other former general employees.

The payments were compensation for unused vacation, holiday and sick leave the workers were allowed when they left the city’s employment. While employed, the firefighters were paid on a 40-hour week, but when they left the department, their pay rate should have been calculated on a 56-hour week, according to policy, the report said.

The audit report said the computer software didn’t create pay lines for the leave payments and needed to be manually set with the correct pay rate. That did not happen in some cases.

Assistant City Manager Susan Alanis said city officials have spoken to the nine firefighters in the last couple of weeks and will begin the process of collecting the money soon. The city will set up payment plans with the employees, she said.

Also, the city will account for taxes they would have paid and only ask the firefighters to return 75 percent, or a total of $183,547, she said.

“It’s a shock to them,” Alanis said. “It’s a difficult thing. We’ve put these people in a difficult position.”

Despite the issue with the firefighter pay, Alanis said “it was a clean audit. I’m glad it was done.”

The audit also found $4,500 in overpayments to 50 current employees, on average $90 each, in overtime pay. As of March 18, that money was recouped through payroll adjustments, the report said.

“We concluded that the majority of city payroll transactions are processed accurately and timely,” the audit report said. “However, our audit results indicate that internal control improvements are necessary to adequately address issues identified during this audit.”

Councilman Jungus Jordan, chairman of the city’s Audit Committee, called the miscalculations “unfortunate.”

The payroll audit, though, points to the complexities of how the city pays its police and firefighters, who work nontraditional shifts, as well as the need for external and internal audits, Jordan said.

“At the end of the day, that’s why we conduct audits,” Jordan said.

Finding mistakes

“What you find are mistakes,” he continued. “This is a lot of money and it will be recovered. We’re always going to face human error. There should have been checks and balances to catch it at the time it happened. The good news is we caught it.”

The city processes more than 170,000 paychecks annually for some 6,500 full- and part-time employees. At more than $550.5 million, payroll is the city’s largest operating expenses, the report said.

A little over 99 percent of the paychecks are deposited automatically. In 2011, the city switched from manually figuring paychecks to the PeopleSoft Human Capital Management System for payroll processing.

Still, calculating changes should have been made in the system to account for pay policies with the firefighters, the report said.

For now, city employees retiring or quitting their jobs are having their leave balances checked manually until the problem is fixed. Alanis said they’re hoping a payroll system upgrade this summer will be a solution.

The city learned of the issue in December during the midst of the audit and immediately began checking payments when the city auditor brought the issue to management’s attention.

The city’s payroll vendor has not been able to identify the system bug, Alanis said.

Six other former employees who were overpaid $6,960 are also involved. Those employees were overpaid because paperwork stating their leave date was not turned in in time for the payroll period and unworked hours were approved.

At least two of the former employees said they did try to contact the city when they believed they received too much money but were not directed to the right department to handle the issue and apparently were told it was figured properly, Alanis said.

In other findings, the city improperly reinstated vacation, holiday and sick leave hours to a returning employee who had been paid for the accruals when the individual left the city. Two employees were underpaid $4,814 when they left the city.

From The Fort Worth Star-Telegram