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Issued: December 2004

SUMMARY

This report presents the results of our audit of Citywide overtime usage, which was approved by the Council Audit and Finance Committee as part of our office’s 2004 service plan. Our objectives were to determine:

• What is the level of overtime usage across the City and how does it compare to similar entities?
• Do overtime authorization processes allow departments to adequately monitor the heaviest users of overtime?
• Is overtime equitably distributed among like positions or job titles?

Our work focused on Citywide, departmental, and individual use of overtime, and we ascertained that risks to the City from poor data reliability or fraudulent activity were low.

While City management appeared to be controlling overtime usage from an overall perspective, audit results indicated that the greatest risk for overtime is centered at the level of individual usage. Departmental overtime spending had been reduced over the last two fiscal years, but is again approaching high levels.

Austin’s departmental overtime levels are not out of line with other cities. We gathered additional information from cities with better overtime to personnel cost ratios in key departments and found that, due to budget pressures, some have instituted additional levels of controls, mirroring some of the controls already in place in Austin.

For the City budgetary orgs we examined, controls over the use of overtime are incomplete and inconsistently enforced. We found that the City of Austin places no limit on the number of hours worked in succession for non-civil service employees, although civil service employees may not exceed certain numbers of hours per day or week. Furthermore, there is no requirement for higher-level review of overtime once a set level of overtime is reached.

The Budget Office compiles data downloads from the Controller’s Office at the fund and agency levels, but not at the level of individual usage. These reports are distributed to Assistant City Managers and department directors. Lack of aggregated overtime reporting for individuals hampers supervisory management’s ability to control overtime, and in fact, monitoring of individual overtime and reimbursable overtime expenditures varies throughout the organizations reviewed.

Approval and after the fact documentation for non-emergency overtime work varies and timesheet signatures are not adequate proof that overtime hours worked were pre-authorized. Moreover, justifications for exempt employees who may earn overtime pay in certain situations are not regularly reviewed.

Finally, although processes are in place to provide equal opportunities for employees to earn overtime, in the orgs we examined, the lack of authorization and monitoring controls contribute to high levels of overtime earned by some individuals. Management does assert that there are many factors that lead to inequitable distribution among like positions. Some examples are: Overtime levels are largely dependent on availability of employees to work overtime hours beyond their regular schedule, and some work requires specific individuals with special qualifications and experience. Processes to distribute overtime opportunities equitably are undermined by the fact that on-call overtime may not be needed or employees may decline or trade availability.

We have issued seven recommendations and management has concurred with six of them. Our recommendations would:

• Establish limits and thresholds that give supervisors guidelines to follow when making decisions on overtime assignments and a higher level of supervisory review once an individual reaches a pre-set threshold.
• Make reports showing overtime use per pay period available to all levels of management and require periodic analysis of overtime use and trends.
• Establish separate budgetary orgs, along with a reconciliation process to ensure that all revenues, and waivers for revenues, for reimbursable overtime charges are properly handled.
• Require that all non-emergency overtime be authorized prior to it’s being worked and that all timesheets be signed and dated by an employee’s supervisor as evidence of their review, along with emphasizing that timesheet signatures are not to serve as a substitute for pre-approval.
• Require periodic review and justification of the situations causing the need for exempt personnel to be allowed to earn overtime pay.

Click here to go to our audit request form to request a hard copy of this report (Report No. AU04101) or download the entire text of the Citywide Overtime (Size: 532 KB) in Adobe Acrobat. You will need Adobe's Acrobat Reader to view these files.

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