Overview
MEP did not ensure that officers worked 8.5 hours in their work days, 40 regular work hours, or 40 of a combination of work hours and paid time off hours (except in certain circumstances of sick time) before receiving an overtime rate. We identified 327 instances where a total of 65 officers were improperly compensated as much as $42,62313 in overtime. As a result, MEP may have incurred unnecessary overtime costs.
Authoritative Guidance
Section 2.4 of the “MEP Overtime” policy defines overtime as follows:
Any extra work assignment, which is similar to an officer’s day to day duties . . . that requires an officer to exceed eight (8) hours and thirty (30) minutes in his/her workday or forty (40) hours in his/her workweek . . . in accordance with the Unit 5 contract.
Reasons for Incorrect Pay Rate
MEP lacked policies and procedures, including a monitoring component, to ensure that officers received overtime pay in compliance with its policy.
Recommendation
MEP should create policies and procedures, including a monitoring component, to ensure that officers receive overtime pay in compliance with its policy.
Auditee’s Response
MEP has policies and procedures to ensure officers receive overtime pay in compliance with policy, the collective bargaining agreement (CBA) and governing law. Unfortunately, the audit methodology used to identify allegedly improper overtime payments does not correspond to the legal requirements for paying overtime. . . . The policy incorporates the CBA by reference, and the CBA parallels the governing statute. Under policy, the CBA and the statute, the MEP is required to pay overtime whenever an officer works beyond his or her regularly scheduled shifts. Officers work a so-called 4–2 schedule, in which they work four days followed by two days off. In any given six-day period, an officer is scheduled to work 34 hours. Over an eight-week period, this averages out to 40 hours per week per officer. The collective bargaining agreement requires that MEP pay officers who work beyond this regular schedule at time and half, and this has been MEP's long-standing practice for decades.
The audit report indicates that this finding is based on a statistical review of whether an individual officer who received an overtime premium worked more than an average of 40 hours per week over an 8-week period leading up to that particular overtime premium payment. As we explained at our meeting on February 14, this methodology is inconsistent with the collective bargaining agreement, the MEP's and union's consistent past practice and, as to land-based EPOs, the governing statute. The MEP is required to pay overtime rates to EPOs who work outside of their regularly scheduled shifts, which generate, on average, a 40 hour work week. This requirement is independent of whether a particular employee worked a particular number of hours in the months leading up to overtime work. If the MEP were to apply the audit team's methodology in paying overtime, in addition to violating the CBA and governing law, the MEP would routinely pay officers overtime for working their regularly scheduled shifts, officers would be ineligible for overtime pay for the first seven weeks of employment (or first seven weeks after returning from leave) and the agency would be faced with an administratively burdensome payroll requirement that, on information and belief, no other law enforcement agency that uses a 4–2 schedule applies.
The audit methodology does not correspond to the statutory and contractual requirements for the payment of overtime. Prior to the audit team's completion of the report, counsel for MEP repeatedly warned the audit team, in person and by email, that the methodology the audit team was using would not produce accurate results. A preliminary review of the 327 instances of allegedly improperly paid overtime confirms that a significant number of these overtime payments were instances where EPOs worked on their days off and were contractually entitled to premium pay. While MEP has not been able to review all 327 instances of allegedly improper overtime payments at the time of this response, MEP will analyze each of them in the future. That project will first determine whether any employees were actually compensated at the overtime rate when they should have been compensated at the straight time rate and, if so, determine what appropriate corrective actions can and should be taken. Additionally, the confusion of the audit team with respect to MEP's overtime requirements has highlighted an additional issue that the MEP should and will address: policies and procedures relating to overtime would benefit from additional clarity. While the rules are abundantly clear to the agency, its employees and the union, explaining them to the audit team has been a challenge. Some additional clarity has been achieved by correcting typographical errors in the revised CBA that the Commonwealth and the union entered into in 2018, more can and will be done with respect to MEP's policies. Working in cooperation with the Union, the MEP is committed to issuing new overtime guidance that will contain, in a single document, all rules for the approval, review and documentation of overtime; we expect this document will be finalized by the end of this summer.
Auditor’s Reply
OSA considered all of MEP’s concerns regarding the methods we used to conduct our audit testing in this area. Based on these concerns, we made several revisions to the methods we used and, by extension, our estimate of the improper overtime payments that may have occurred during the audit period. As previously noted, our testing was designed to assess compliance with criteria delineated in Chapter 149 of the Massachusetts General Laws and MEP’s overtime policy. OSA believes that our methods represent a reasonable effort at interpreting and applying the rules that were relevant to MEP’s overtime payroll process during the audit period given the limitations we faced. For example, one limitation we encountered was that the biweekly schedules maintained by EPOs were not formatted consistently and many were incomplete. Further, MEP was only able to provide us with biweekly schedules for a small percentage of EPOs who worked at MEP during the audit period, and those that were provided only encompassed a few months of the audit period. Therefore, we could not use this information to reconcile EPO schedules to reported time.
Given the many nuances related to when MEP officers are eligible for overtime, OSA understands MEP’s concerns regarding the accuracy of the estimate of improper overtime payments we present in this report. Although the primary purpose of our testing in this area was to determine, to the extent possible, whether any improper overtime payments occurred, the value of our testing was that we were able to determine that MEP did not have adequate controls in place to ensure that its staff members complied with all of its overtime rules. This made the system vulnerable to error and abuse, a matter that we were able to bring to management’s attention.
Based on its response, MEP is taking measures to address our concerns in this area.
| Date published: | April 21, 2020 |
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