Auditors found a state employee worked overtime “for approximately one hour a day for almost the entirety of fiscal year 2009” without approval from the agency’s commissioner as required by department policy.
Despite the claim by auditors that they found no evidence of approval by the commissioner of the Department of Economic and Community Development, the agency said the employee had such approval.
“The department requires prior approval by the commissioner of all overtime worked by any Department employee,” agency officials said in their response included in the audit. “Therefore the employee had the commissioner’s authorization to work the overtime during fiscal year 2009. This employee would not have worked the overtime without the commissioner’s approval.”
The department committed to keeping better records in the future.
DECD spokesman Jim Watson said the person worked overtime “to gain some additional – and much-needed – engineering support from a 35 hour-per-week worker.”
The audit, covering fiscal years 2009 and 2010, also revealed DECD “had not completed performance appraisals for any of its 16 managerial employees” in either of the two years. In response, DECD agreed to conduct annual reviews.
The agency disagreed that it needs to improve how it pays grant recipients because of $2.5 million in overpayments that had to be returned to the state.
“We believe our cash management procedures are working exactly as they should,” Watson said.
Auditors found fault the agency’s practice of paying grant recipients lump sums and then requiring them to refund overpayments beyond their actual costs, with recipients holding onto the extra money for more than three years in some cases.
“The length of time that clients held unexpended state funds before returning them to DECD seems excessive,” the auditors said. “For the 15 projects we reviewed, the time between DECD’s last payment and receipt of a refund was less than one year for five projects, one to two years for five projects, two to three years for three projects, and more than three years for two projects. The amounts of the two refunds due over three years were $108,814 and $560,694.”
“The department believes that its cash management system provides reasonable assurance that excessive funds are not disbursed to a client and that a client provides a refund to the State in a timely manner,” agency officials responded in the audit.
“If DECD’s cash management procedures were adequate, in a two-year period it would not have identified 136 refunds due totaling over $2.5 million,” the auditors wrote in their reply to the agency. “The department acknowledges that it has a lengthy process to follow before billing clients for refunds. Consideration should be given to changing that process.”