Highland School District Overtime Audit

DIVISION OF LOCAL GOVERNMENT AND SCHOOL ACCOUNTABILITY
REPORT OF EXAMINATION | 2021M-8
Highland Central School District
Non-Instructional Overtime
JUNE 2021
Contents
Report Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Non-Instructional Overtime . . . . . . . . . . . . . . . . . . . . . . . . 2
How Should District Officials Control Overtime?. . . . . . . . . . . . . 2
District Officials Did Not Properly Approve and Monitor Overtime. . . . 2
What Do We Recommend? . . . . . . . . . . . . . . . . . . . . . . . 4
Appendix A – Response From District Officials . . . . . . . . . . . . . 5
Appendix B – Audit Methodology and Standards . . . . . . . . . . . . 6
Appendix C – Resources and Services. . . . . . . . . . . . . . . . . . 8

Report Highlights
Highland Central School District
Audit Objective
Background
Determine whether Highland Central School District
(District) officials properly authorized and monitored The District is located in the Towns
overtime for non-instructional employees. of Esopus, Lloyd, Marlborough,
New Paltz and Plattekill in Ulster
Key Findings County. It is governed by an
elected seven-member Board of
District officials did not properly authorize and monitor Education (Board) responsible
overtime for non-instructional employees or review the for the general management and
overtime payment calculations. As a result: control of financial and educational
affairs.
ll 20 non-instructional employees were paid overtime
totaling $203,444, primarily for non-emergencies. The Superintendent of Schools
With appropriate scheduling, over $60,000 of these is the chief executive officer
overtime payments could have been avoided or responsible, along with other
reduced. administrative staff, for day-to-day
ll 10 employees were overpaid for 189.75 overtime management under the Board’s
hours totaling $7,551 and seven employees were direction.
underpaid for 39.25 overtime hours totaling $1,158.
Employees’ immediate supervisors
are responsible for scheduling
Key Recommendations overtime. Immediate supervisors
and central administration are
ll Adopt policies and procedures with clear guidelines
responsible for approving overtime.
for overtime work, including approval of overtime,
to ensure that only necessary overtime charges are
being incurred. Quick Facts
ll Implement procedures for supervisory review of 2018-2019 Expenditures $44,659,882
hours worked for accuracy of manual calculations of
2019-2020
overtime charges. Appropriations
$44,442,937
ll Ensure these policies and procedures are monitored Total Overtime Paid
$308,968
During the Audit Period
and enforced.
Employees 494
Enrollment 1,668
District officials generally agreed with our
recommendations and indicated they plan to initiate
corrective action.
Audit Period
July 1, 2018 – January 31, 2020
Of f ic e of t he New York State Comptroller 1

Non-Instructional Overtime
How Should District Officials Control Overtime?
While overtime pay may be an expected cost of doing business, it must be Overtime should
carefully monitored and controlled to help minimize costs. Overtime should be
incurred only when circumstances arise and cannot be avoided.
be incurred
only when
Preapproval of overtime should be obtained in all instances where overtime can
be planned in advance, such as for a school program or the second day of an circumstances
emergency event, using a written authorization form. In emergency situations,
supervisors should verbally preapprove overtime to be incurred and follow up with
arise and
the written form. cannot be
To ensure that controls are effective, department heads and supervisors should avoided.
regularly review available documentation and accounting records to confirm
that controls are being properly followed. In addition, the terms and conditions
of collective bargaining agreements should be clearly communicated to those
responsible for payroll processing to limit inaccuracies.
The District’s Highland Support Association (HSA) contract states overtime must
be scheduled by the employee’s immediate manager and be approved by central
administration. The HSA contract outlines that employees will receive overtime
at the rate of time and one-half for all hours worked in excess of the required
number of daily duty hours, except bus drivers. Bus drivers who work in excess
of five hours in a single work day will be paid straight time for hours worked in
excess of five hours until they work 37.5 hours during a work week. Any hours
above 37.5 will be paid at the rate of time and one-half for the remaining hours
worked during that work week.
District Officials Did Not Properly Approve and Monitor Overtime

Existing controls over the payroll overtime process, such as written preapproval …[O]vertime
of overtime, were not being followed. As a result, District employees would
add any additional time worked on their timesheets either without preapproval was worked
from their immediate supervisor or with only verbal preapproval from their
without
supervisor. In both situations, the overtime was worked without obtaining central
administration’s approval as required by the HSA contract. obtaining
We selected 20 employees with high overtime charges for the audit period1 and central
reviewed all of their timesheets and any additional preapproval documentation
administration’s
for overtime charges totaling $203,444 and found none of them had prior
written authorization. Our review of the timesheets for these 20 employees also approval.
1 Refer to Appendix B for information on our sampling methodology.
2 Of f ic e of t he New York State Comptroller

found that 91 percent of the
FIGURE 1 overtime charges were for non-
General Overtime Analysisa emergency events (Figure 1).
Figure 1: Overtime Analysisa In addition, District officials and
department heads were not
adequately monitoring overtime
charges. While emergency
Non-Emergency overtime can be difficult to
anticipate, non-emergency
overtime worked was primarily
Emergency for substitutions, sporting
events, dances and contractor
visits, which could have been
easily prevented with schedule
adjustments. We determined
a) $197,051 paid for emergency and non-emergency that had the District adjusted
work plus the variance of $6,393 for overpayments employee schedules, some of
totals $203,444.
these charges could have been
avoided or paid at regular pay.
As a result, the District could
have saved over $60,000 in overtime expenses.
Furthermore, District officials and department heads did not effectively review
overtime charges for accuracy prior to payments being issued. There are multiple
points of review from when the employee signs their timesheet to when the payroll
is finalized, including the employee’s supervisor and the payroll clerk. However,
our review of these 20 employees’ timesheets found:
ll 136 out of 767 timesheets reviewed (18 percent) contained errors. While
some of these errors were due to mathematical mistakes, most were due
to employees that should have been paid straight time instead of overtime
based on their contract.
ll 10 employees were overpaid for 189.75 hours totaling $7,551. For example,
three bus drivers were paid $5,372 for overtime in weeks in which they were
off for holidays, reducing their hours worked, instead of working a total of
37.5 hours in a week at straight time prior to earning overtime as the HSA
requires.
ll Seven employees were underpaid for 39.25 hours totaling $1,158 because
their timesheet hours were inaccurately calculated.
These errors occurred because District officials did not establish a written policy
or procedures to ensure that all overtime hours worked required preapproval
documentation, were incurred only when necessary and were adequately

recorded. In addition, although the HSA requires preapproval of all overtime
worked, District officials could not provide an explanation on why it was not being
followed. Because District officials did not ensure overtime was preapproved and
monitored and did not provide an adequate review of timesheets, the District paid
more than necessary in overtime costs.
What Do We Recommend?
The Board should:
1. Adopt written policies and procedures relating to overtime control. The

policy should also address the approval of overtime for emergencies and
unforeseen circumstances when written preapproval cannot be obtained
and scheduling to cover employees who are absent from work.
District officials should:
2. Monitor and enforce District policies, procedures and collective bargaining

agreements regarding overtime charges and preapproval to ensure that
only necessary overtime charges are being incurred.
3. Implement procedures for supervisory review of hours worked to ensure

the accuracy of the manual calculation of overtime charges.

Appendix A: Response From District Officials

Appendix B: Audit Methodology and Standards
We conducted this audit pursuant to Article V, Section 1 of the State Constitution

and the State Comptroller’s authority as set forth in Article 3 of the New York
State General Municipal Law. To achieve the audit objective and obtain valid audit
evidence, our audit procedures included the following:
ll We interviewed District officials and department heads to obtain an
understanding of the policies and procedures for the approval of overtime.
ll We reviewed the District’s collective bargaining agreements to determine
whether overtime payments were paid in accordance with the agreements.
ll We reviewed the total overtime payments for all employees and departments
during our audit period to determine which employees and departments
had the highest overtime charges. We used our professional judgement
to determine our sample size of the 20 highest paid non-instructional
employees out of the 98 employees receiving overtime payments.2
ll We reviewed all timesheets for the audit period for the 20 employees in
our sample to determine if overtime worked was for emergency or non-
emergency events, for Saturday hours and/or for substitution and if their time
was calculated correctly.
ll We calculated overtime charges at regular pay to determine potential cost
savings.
ll We requested written documentation to support preapproval of overtime
worked for the sample of 20 employees.
We conducted this performance audit in accordance with generally accepted

government auditing standards (GAGAS). Those standards require that we plan
and perform the audit to obtain sufficient, appropriate evidence to provide a
reasonable basis for our findings and conclusions based on our audit objective.
We believe that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objective.
Unless otherwise indicated in this report, samples for testing were selected
based on professional judgment, as it was not the intent to project the results
onto the entire population. Where applicable, information is presented concerning
the value and/or size of the relevant population and the sample selected for
examination.
2 One employee was excluded from testing because the overtime paid was the result of a student’s
Individualized Education Program requirements.

The Board has the responsibility to initiate corrective action. A written corrective
action plan (CAP) that addresses the findings and recommendations in this report
must be prepared and provided to our office within 90 days, pursuant to Section
35 of General Municipal Law, Section 2116-a (3)(c) of New York State Education
Law and Section 170.12 of the Regulations of the Commissioner of Education. To
the extent practicable, implementation of the CAP must begin by the end of the
next fiscal year. For more information on preparing and filing your CAP, please
refer to our brochure, Responding to an OSC Audit Report, which you received
with the draft audit report. The CAP should be posted on the District’s website for
public review.

Appendix C: Resources and Services
Regional Office Directory

www.osc.state.ny.us/sites/default/files/local-government/documents/pdf/2018-12/regional_directory.pdf
Cost-Saving Ideas – Resources, advice and assistance on cost-saving ideas

www.osc.state.ny.us/local-government/publications?title=&body_value=&field_topics_target_id=263196&issued=All
Fiscal Stress Monitoring – Resources for local government officials experiencing fiscal problems
www.osc.state.ny.us/local-government/fiscal-monitoring
Local Government Management Guides – Series of publications that include technical information
and suggested practices for local government management
Planning and Budgeting Guides – Resources for developing multiyear financial, capital, strategic and
other plans
www.osc.state.ny.us/local-government/resources/planning-resources
Protecting Sensitive Data and Other Local Government Assets – A non-technical cybersecurity
guide for local government leaders
www.osc.state.ny.us/sites/default/files/local-government/documents/pdf/2020-05/cyber-security-guide.pdf
Required Reporting – Information and resources for reports and forms that are filed with the Office of
the State Comptroller
www.osc.state.ny.us/local-government/required-reporting
Research Reports/Publications – Reports on major policy issues facing local governments and State
policy-makers
Training – Resources for local government officials on in-person and online training opportunities on a
wide range of topics
www.osc.state.ny.us/local-government/academy

Contact
Office of the New York State Comptroller
Division of Local Government and School Accountability
110 State Street, 12th Floor, Albany, New York 12236
Tel: (518) 474-4037 • Fax: (518) 486-6479 • Email: [email protected]
www.osc.state.ny.us/local-government
Local Government and School Accountability Help Line: (866) 321-8503
NEWBURGH REGIONAL OFFICE – Lisa A. Reynolds, Chief Examiner

33 Airport Center Drive, Suite 103 • New Windsor, New York 12553-4725
Tel (845) 567-0858 • Fax (845) 567-0080 • Email: [email protected]
Serving: Columbia, Dutchess, Greene, Orange, Putnam, Rockland, Ulster, Westchester
counties
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DIVISION OF LOCAL GOVERNMENT AND SCHOOL ACCOUNTABILITY

REPORT OF EXAMINATION | 2021M-8

Highland Central School District

How Should District Officials Control Overtime?. . . . . . . . . . . . . 2

District Officials Did Not Properly Approve and Monitor Overtime. . . . 2

Appendix A – Response From District Officials . . . . . . . . . . . . . 5

Appendix B – Audit Methodology and Standards . . . . . . . . . . . . 6

Appendix C – Resources and Services. . . . . . . . . . . . . . . . . . 8

Of f ic e of t he New York State Comptroller 1

District Officials Did Not Properly Approve and Monitor Overtime

1 Refer to Appendix B for information on our sampling methodology.

2 Of f ic e of t he New York State Comptroller

Of f ic e of t he New York State Comptroller 3

1. Adopt written policies and procedures relating to overtime control. The

District officials should:

2. Monitor and enforce District policies, procedures and collective bargaining

3. Implement procedures for supervisory review of hours worked to ensure

4 Of f ic e of t he New York State Comptroller

Of f ic e of t he New York State Comptroller 5

We conducted this audit pursuant to Article V, Section 1 of the State Constitution

We conducted this performance audit in accordance with generally accepted

6 Of f ic e of t he New York State Comptroller

Of f ic e of t he New York State Comptroller 7

Regional Office Directory

Cost-Saving Ideas – Resources, advice and assistance on cost-saving ideas

8 Of f ic e of t he New York State Comptroller

NEWBURGH REGIONAL OFFICE – Lisa A. Reynolds, Chief Examiner

Like us on Facebook at facebook.com/nyscomptroller

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