The Use of Data Analytics in Audits of Uniform Overtime in Dallas Police and Fire Departments

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The Use of Data Analytics in Audits of Uniform Overtime in Dallas Police and Fire Departments 2013 ALGA Annual Conference presented by Anatoli V.

1 The Use of Data Analytics in Audits of Uniform Overtime in Dallas Police and Fire Departments 2013 ALGA Annual Conference presented by Anatoli V. Douditski City of Dallas, TX Objectives Review a fire department staffing model. Is it cheaper to use overtime or to hire more firefighters? Review the use of ACL data analytics to examine the accuracy and the causes of overtime in the Fire and Police departments. 2

2 Background Texas Local Government Code HOURS WORKED 212 = OVERTIME HOURS x WAGE x 1.5 = OVERTIME WAGES HOURS WORKED <> Kelly Day, unauthorized leave, sick leave, and suspension Dallas Fire Rescue Work Schedule: = 4 (SCHEDULED OVERTIME) (KELLY DAY) 212= 4 (SCHEDULED OVERTIME) 117 x 24 hours = 2,808 hours per year per firefighter 3 Overtime Hours by Category FY Scheduled Overtime 17.35% Other 0.38% EMS Peak Demand 17.80% Special Events 0.09% Paramedic School 3.48% Overtime due to Unscheduled Leave 60.89% 4

3 Overtime Expenditures FY $16 $14 $12 Millions $10 $8 $6 $4 $2 $ FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 Overtime due to Unscheduled Leave Peak Demand Overtime Scheduled Overtime 5 Magic numbers Deputy Chiefs will allocate to each district a magic number, which will determine the number of members who may be on scheduled leave at any given shift. DFD Procedure Manual XLII, Paragraph C Method of Balancing Leave 6

$3 = 542 Example 2: Minimum Size of Force = 417 x 3 = 1,251 Actual Size of Force = 1,251 x 1.3 = 1,626 ALGA\OT vs. overhire estimate (work sheet).xlsx 7 Overtime or Overhire?$

4 Magic exposed: Fire Department staffing model (unimproved) Constant ratio of 1.3 Example 1: Minimum Staffing Per Shift = 417 Actual Scheduled Force = 417 x 1.3 = 542 Example 2: Minimum Size of Force = 417 x 3 = 1,251 Actual Size of Force = 1,251 x 1.3 = 1,626 ALGA\OT vs. overhire estimate (work sheet).xlsx 7 Overtime or Overhire? Scheduled FY Hours per Firefighter 2,808 Unscheduled Leave Hours Covered by Overtime per Firefighter (FY 2010 Average) 74 Straight Pay Rate for a New Firefighter (FY 2010 Average) $ Overtime Pay Rate (FY 2010 Average) $ Estimated Annual Employment Expenditures for a New Firefighter: Annual Straight Pay $ 41,307 Annual Overtime Pay due to New Firefighter s Unscheduled Leave and Scheduled Overtime 4,258 Uniform and other equipment 3,700 Paramedic Training 2,667 Annual Health Insurance 5,092 Annual City Contribution to the Dallas Police and Fire Pension Plan 12,530 Total Estimated Annual Expenditures for a New Firefighter Scheduled to Work 2,808 Hours 69,555 Total Estimated Annual Expenditures to Cover 2,808 hours of Unscheduled Leave with Overtime Pay to Existing Firefighters 135,999 Estimated Average Savings $ 66,445 8

5 How much did we lose by relying on overtime? 9 Unscheduled Overtime Cost TOTAL OVERTIME COST SCHEDULED OVERTIME PEAK DEMAND EMS OVERTIME FY Unscheduled Voluntary Overtime used to fill unscheduled staff shortages *1.275 (pension cost) 2006 $3,924, $7,688, $10,588, $5,630, $5,474,

6 How many new employees could we have hired to cover unscheduled staff shortages? FY Hours of unscheduled staff shortages Work hours for one FTE for one year Number of New FTEs ,554 2, ,748 2, ,921 2, ,457 2, ,107 2, Cost of Overhire 1) One time hiring cost (Uniform and other equipment, and training (i.e. paramedic class) 2) Cost of regularly scheduled work hours, i.e. 2,808 x base pay rate x number of new hires. 3) Cost of covering the new hires unscheduled leave (e.g. sick leave) with voluntary unscheduled overtime. 4) Cost of new hires scheduled overtime. 5) Cost of health insurance. 6) Cost of pension contributions. 12

One time hiring cost FY Uniform and other equipment per FF Paramedic Class cost per FF Number of Newly Hired FTEs One Time Hiring Cost 2006 $3,700 $2,538 34 $212,092.00 2007 $3,700 $2,579 63 $395,577.

7 One time hiring cost FY Uniform and other equipment per FF Paramedic Class cost per FF Number of Newly Hired FTEs One Time Hiring Cost 2006 $3,700 $2, $212, $3,700 $2, $395, $3,700 $2, $525, $3,700 $2, $266, $3,700 $2, $254, Cost of regularly scheduled work hours FY 2808 Schedule Total Work hours Base pay rate Cost of regularly scheduled work hours*times ,704 $13.76 $1,668, ,628 $14.84 $3,334, ,748 $14.84 $4,393, ,752 $14.84 $2,222, ,240 $14.84 $2,106,

sick leave) with overtime FY Hours of unscheduled staff shortages paid at OT rates per FF Number of Newly Hired FTEs Unscheduled overtime hours caused by unscheduled leave Average Overtime Rate Cost

8 Cost of covering the new hires unscheduled leave (e.g. sick leave) with overtime FY Hours of unscheduled staff shortages paid at OT rates per FF Number of Newly Hired FTEs Unscheduled overtime hours caused by unscheduled leave Average Overtime Rate Cost of unscheduled overtime caused by new hires unscheduled leave*times , $32.32 $91, , $34.14 $339, , $35.61 $624, , $37.39 $160, , $37.99 $144, Cost of new hires scheduled overtime FY Number of Newly Hired FTEs Average Scheduled Overtime hours per FF Base Pay Rate Base Pay Rate *times 1.5 Cost of Scheduled overtime for new hires *times $13.76 $20.64 $8, $14.84 $22.26 $18, $14.84 $22.26 $24, $14.84 $22.26 $12, $14.84 $22.26 $27,

09 1,405 $3,913.41 83 $324,813.09 2009 $6,282,243.18 1,468 $4,279.46 42 $179,737.20 2010 $7,669,064.96 1,506 $5,092.34 40 $203,693.

9 Cost of health insurance FY Health Insurance Average number of FF Health Insurance cost per FF Number of Newly Hired FTEs Cost of health insurance 2006 $5,608, ,456 $3, $130, $5,669, ,426 $3, $250, $5,498, ,405 $3, $324, $6,282, ,468 $4, $179, $7,669, ,506 $5, $203, Total cost of overhire FY TOTAL 2006 $2,112, $4,339, $5,892, $2,842, $2,736,

10 How much did we lose? FY Overtime Overhire Overtime Minus Overhire 2006 $3,924, $2,112, $1,466, $7,688, $4,339, $3,195, $10,588, $5,892, $4,695, $5,630, $2,842, $2,787, $5,474, $2,736, $2,737, Recommendation: Annually determine the optimal number of firefighters needed to maintain daily staffing without using overtime to cover attrition, scheduled, and unscheduled leave. The annual review should include the comparison of total cost of hiring additional firefighters, including the time it takes to recruit and fully train new firefighters, and the total cost of overtime 19 Common Overtime Audit Objectives for Data Analysis using ACL Do they compute the OT hours and dollars correctly? Analyze payroll records and determine if: The OT computation excludes unauthorized leave, sick leave, and suspension. All overtime hours were paid at 1.5 times regular pay rate. Any exempt personnel were paid OT pay rates. 20

$Inadequate controls Use the clues 21 More Magic ALGA\Book1.$

11 Perfect data is hard to get Missing fields Incorrect computations Faulty data entry procedures Inadequate controls Use the clues 21 More Magic ALGA\Book1.xlsx REALITY <> TIMEKEEPING <> PAYROLL 22

12 Using ACL to recreate missing data fields Does the OT computation excludes unauthorized leave, sick leave, and suspension? How: Total hours worked per employee per pay period. Deduct sick, suspension, AWOL, Kelly. Deduct 212 or 40. Compare the result with the OT hours paid. 23 Problem: Payroll records are not broken up into pay periods Solution: Add pay periods: a) Create a table of ending dates for 14 day and 28 day periods (in Excel) b) Join the table with timekeeping and payroll data sets 24

25 Problem: Payroll records do not tell you who works 212 hours and who works 40 hours in each pay period. Solution: Identify the groups using clues.

13 25 Problem: Payroll records do not tell you who works 212 hours and who works 40 hours in each pay period. Solution: Identify the groups using clues. CLUE: 212+ employees enter their work hours at fire stations 1) Summarize fire station timekeeping hours per employee per pay period. 2) Join the timekeeping summary with payroll records to identify firefighters whose hours were entered via fire stations 26

14 Problem: Some firefighters did not enter their time at the fire stations. CLUE: if an employee is shown working 7.72 hours every day in the payroll system, he or she is in the 212+ group 1) Set the filter to REGULAR HOURS equal to ) Summarize the resulting records 3) Join with the 212+ group 4) Join non matches with the 40 hour group Problem: Firefighters on injury leave do not show 7.72 marker in the payroll system CLUE: if an employee accumulated close to 108 hours in 14 days, he or she works 212+ schedule. 1) Summarize payroll hours by employee number and pay period (in the 40+ group) and identify exceptions (212+ employees who did not enter time at fire stations) 27 Problem: non firefighting personnel moonlighting at fire stations CLUE: Employees showing daily payroll entries of 8 or 10 hours regular pay are in the 40+ group even if they entered time at a fire station 1) Filter for Pay_Code = "REGU" AND (Hours = 8 OR Hours=10). 2) Summarize on employee number and pay period 3) Exclude these employees from the 212+ group 28

15 29 Did they exclude unauthorized leave, sick leave, and suspension? 1. Join the list of 212+ employees and pay periods with the payroll dataset to assign correct OT plan to each DFDU employee in each pay period. 2. Summarize their hours and wages per overtime period (7 day for 40+ and 28 day for 212+). 3. Cross tabulate the resulting summary separately for 212+ group and 40+ group. 4. In the crosstabs, compute HOURS WORKED, OT HOURS, and compare those with payroll records. Problem: Payroll records do not display correct OT hours Solution: Reconstruct the OT hours from the OT amount by first computing the pay rate and then dividing OT wages by the pay rate. 30

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17 33 34

18 35 CONCLUSION: 1) OT was earned according to FLSA rules. 2) OT was paid at the correct rate. 36

19 Municipal Court overtime by month 4, , , , , , , Municipal Court overtime is unproductive Off duty DPD officers are guaranteed two hours of overtime pay even if they never testify. Eighty percent of all DPD officers summoned to Municipal Court attend court during off duty hours Ninety nine percent of DPD officer visits to Municipal Court do not result in a court testimony Between October 2007 and December 2009, DPD uniform overtime hours increased 20 percent because more off duty officers claimed overtime for Municipal Court attendance. 38

20 Do off duty officers HAVE TO be in court? DPD General Orders allow off duty officers to choose between waiting for trials on court premises with a guaranteed two hours of overtime pay OR remaining on stand by for one hour with no pay unless they are actually called to testify Over 70 percent of the DPD off duty officers chose overtime pay 39 Were off duty officers supposed to be in court? How: Compare municipal court OT claims with court dockets. Join unmatched OT payroll records with court docket records on badge number and court date. Conclusion: 1,419 OT claims do not match court records. To identify the causes of mismatch, picked a sample of 60 OT claims and reviewed the OT request cards. 40

21 41 42

22 Reasons for no match Cannot find the time card (18 percent) DPD officers recorded an incorrect court date on their overtime request cards (18 percent) Not enough information on the timecard (17 percent) Sergeants entered an incorrect date in the timekeeping system (23 percent) Sergeants incorrectly coded other activities as overtime hours for Municipal Court (22 percent) 43 Recommendations: Require off duty officers to remain on stand by with no pay unless, they are actually called to court to testify Extend court hours into the evening to allow more DPD officers to attend court during their regular working hours. Implement a paperless system that includes the proper controls for requesting, approving, and documenting all uniform overtime. In the meantime, improve existing manual overtime procedures by: Directing DPD officers to submit copies of Municipal Court subpoenas as proof of overtime claims. Providing overtime documentation training to DPD personnel. Periodically auditing overtime claims. 44

23 SUMMARY It is cheaper to hire extra fire fighters than to cover sick leave with overtime When perfect data are not available, auditors can restore missing or corrupted fields by using data clues 45 QUESTIONS? 46

24 Anatoli V. Douditski Assistant City Auditor III City Hall 1500 Marilla St., 2FN Dallas, TX Telephone

25 DATE Hours Explanation Timekeeping System Code Timekeeping System Hours Payroll Sytem Date Payroll System Code Payroll System Hours Payroll System Wages 4/14/2010 4/14/2010 REGU /15/ Fire Station Assignment 4/15/2010 REGU /16/2010 4/16/2010 REGU /17/2010 4/17/2010 REGU /18/2010 REGU /18/2010 REGU (24.00) (366.82) 4/18/ Called in sick SFU /18/2010 SIKU /19/2010 4/19/2010 REGU /20/2010 4/20/2010 REGU /21/ Fire Station Assignment OVT3 5C /21/2010 REGU /21/2010 REGU (9.00) (137.56) 4/21/ Training TLU /21/2010 TLU /22/ Paramedic School OVT3 5C /22/2010 OVT /22/2010 REGU /23/ Paramedic School OVT3 5C /23/2010 OVT /23/2010 REGU /24/ Fire Station Assignment 4/24/2010 REGU /25/2010 4/25/2010 REGU /26/2010 4/26/2010 REGU /27/ Kelly Day KEL /27/2010 KEL /27/2010 REGU (0.08) (1.22) 4/27/2010 REGU /27/2010 REGU (24.00) (366.82) 4/28/2010 4/28/2010 REGU /29/2010 4/29/2010 REGU /30/ Fire Station Assignment 4/30/2010 REGU /1/ Call back Station Assignment OVT3 1A /1/2010 OVT /1/2010 REGU /2/ Special Event OVT /2/2010 OVT /2/2010 REGU /3/ Fire Station Assignment 5/3/2010 REGU /4/2010 5/4/2010 REGU /5/ Special Event OVT /5/2010 OVT /5/2010 REGU /6/ Fire Station Assignment 5/6/2010 REGU /7/2010 5/7/2010 REGU /8/2010 5/8/2010 REGU /9/ Fire Station Assignment 5/9/2010 REGU /10/2010 5/10/2010 REGU /11/2010 5/11/2010 REGU (0.08) (1.22) 5/11/2010 5/11/2010 REGU /11/2010 FLSU Total , Anatoli Douditski: Error Anatoli Douditski: Error Anatoli Douditski: Correction Anatoli Douditski: Should be 16. Always shows as a 4 or a zero.

26 FY Proposed ERB Plan A Hours Staff Equiv. Minimum Staffing Hours per shift (2012 Leap Year) 10, Total Minimum Staffing (3 Shifts) 3,662,928 1,304 anatoli.doudits ki: 417*24 Planned Unavailable Hours anatoli.d 1st Quarter Attrition ouditski: 4, *3 2nd Quarter Attrition 18, rd Quarter Attrition 24, th Quarter Attrition 47, Vacation 316, Kelly Days 135, Furloughs 31, Holidays 140, Total Planned Unavailable Hours 718, anatoli.douditski: 4860/2808 Personnel Needed to Cover Base Planned Unavailable Hours 4,381,628 1,560 Planned Unvailable Hours for "Flex" Positions Paramedic Class October Start 48, Paramedic Class January Start 48, Vacation 45, Kelly Days 25, Furloughs 6, Holidays 27, Total Planned Unavailable Hours for "Flex" Positions 201, Personnel Needed to Cover All Planned Unavailable Hours 4,582,818 1, Unavailable Non Planned Hours 3 Year Avg Sick 140, Year Avg AIL 43, Year Avg Adm L 2, Year Avg Jury Year Avg Inj 3, Year Avg DIF 4, Year Avg MIL 5, Year Avg Susp Year Avg Train 3,221 1 Total Unavailable Non Planned Hours 205, Open Station 50 in April 26,352 9 New Hires Fire Academy Class October Start (70,200) (25) Fire Academy Class January Start (48,600) (17) New Hire Impact on Operations (118,800) (42) Personnel Needed to Cover All Planned and Unplanned Hours 4,695,481 1, Available FY 12 Strength (4,363,632) (1,554) Personnel Still Needed to Operate at Full Capacity 331,

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