Transcript Document

Auditing Personnel
Processes
Sharon Erickson, San José City Auditor
Michael Houston, Senior Performance Auditor, San José
Jazmin LeBlanc, Senior Performance Auditor, San José
Gitanjali Mandrekar, Senior Performance Auditor, San José
Association of Local Government Auditors
May 5, 2014
Background
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Personnel Audits “Matter”
• Employee Medical Benefits
• Pensionable Earnings and Time
Reporting
• Pension Sustainability
• Police Department Staffing
• Disability Retirement
• Key Drivers of Employee Compensation
• Supplemental Military Pay and Benefits
• Police Department Secondary Employment
• Impacts of Staffing Reductions
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Common Themes
• Audit for compliance
• Question accepted criteria
• Dig a little deeper
• Benchmark
• Unique perspective
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Audit of Pensionable Earnings
and Time Reporting
(December 2009)
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Audit of Pensionable Earnings and Time
Reporting
• Pension contributions are at record highs in San José
• Pensionable time reporting is complex: one-third of
the 160+ earning codes in the City are pensionable
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Creation of Earning Codes and Time
Reporting Codes
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Pensionable Earnings Map
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Dig Deep and Expand the Criteria
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Key Drivers of Employee
Compensation: Base Pay, Overtime,
Paid Leaves and Premium Pays
(May 2011)
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Employee Cash Compensation
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Soaring sick leave payout
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Existing sick leave payout provisions
Bargaining Unit
Maximum Payout
Formula
Maximum Allowable
Federated (800-1200
hours)
Hours accumulated x
75% of final hourly rate
1200 hours
Federated Management
(800-1200 hours)
Hours accumulated x
75% of final hourly rate
1200 hours + 75% of the
value of unused sick leave
earned in final 2 years
prior to retirement
Police (More than 1200
hours)
Hours accumulated x
100% of final hourly rate
No Maximum
Fire (More than 1680
hours)
Hours accumulated x
100% of final hourly rate
No Maximum
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Pay increases not tied to performance
• Between 2000-01 to 2009-10 employees received a
cumulative total of 20% to 53% in raises
• Step increases and general wage increases accounted for
these increases
• General wage increases were not tied to CPI and many times
exceeded it.
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Existing criteria
• City of San José Civil Service Rules
• The Civil Service Commission
• Council Resolutions
• Agreements with various bargaining units
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Looking deeper…
Abundant benchmarking opportunities
• private sector employers
• other jurisdictions to compare San José
• original intent of some current criteria
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Premium pays present significant costs
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Unintended consequences?
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Ten Years of Staffing Reductions
at the City of San Jose: Impacts
and Lessons Learned
(November 2012)
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Ten years of staffing reductions at the City
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Checking for compliance against existing
criteria
• City of San José Civil Service Rules
• City’s administration of seniority-based procedures
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Digging deep to quantify reductions
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The cost of seniority-based layoffs and
bumping
• Impacted productivity
• Rippled through the organization
• Disproportionately affected some departments, jobs, and people
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Challenging criteria and benchmarking
We reviewed employee personnel files, in which we found
seniority-based bumping led to…
• Poor Matches
• Poor Morale
• Marginal employees were held harmless at the expense of
exemplary employees
We found other governments that pursued and implemented
reforms that diminished impacts to their organizations.
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In conclusion…
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An auditor’s unique advantage
• Charter authority to examine all records
of any City department, office and agency
• Unique cross-functional perspective
• Unique role and expectation that we will
think critically
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How do we stay objective?
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Think from the residents’ perspective
Be aware of potential biases
Discuss out loud with the team
Discuss with the whole office
Don’t shy away
Always audit in the public interest
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Questions?
Sharon Erickson [email protected]
Michael Houston [email protected]
Jazmin LeBlanc [email protected]
Gitanjali Mandrekar [email protected]
www.sanjoseca.gov/auditor
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