VHC could not provide evidence that it implemented monitoring controls to ensure that it documents the need for or the approval of overtime, including incremental overtime, for its Nursing Department. Specifically, VHC did not provide evidence that the Overtime Committee met regularly to review all approved and unapproved overtime.
Furthermore, we found that 106 (83%) of our sample of 128 overtime occurrences, including incremental overtime, were not approved or documented. Unapproved or undocumented overtime totaled $25,117 out of $60,546 in overtime pay in our sample. Of the 106 overtime occurrences with issues, 74 did not have an overtime request form, and the remaining 32 overtime request forms either did not have a reason documented for the overtime or the hours paid exceeded the hours approved.
In addition, for our data reliability testing, 9 of the 20 randomly sampled overtime instances did not have overtime request forms associated with them.
We extrapolated the test results from our sample to the entire population, and we are 90% confident that VHC paid at least $722,402 for unapproved overtime.
If VHC does not monitor and properly document overtime occurrences, then there is a higher-than-acceptable risk of VHC incurring unnecessary overtime expenses. Based on our testing, we do not believe the overtime was unwarranted but, rather, that a large number of overtime occurrences indicate staffing shortages at VHC.
Authoritative Guidance
According to Section 5 of VHC’s Overtime Policy 180-11-2022A,
- Department Heads and Supervisors: . . .
- Are responsible for:
- The prior approval of requested overtime, including for Incremental Overtime . . .
- Employees shall submit request for overtime in writing to the Department Head or Supervisor including the justification for request. The Department Head or Supervisor shall provide written approval or denial of the overtime request to the requestor. . . .
- An Overtime Committee shall meet regularly, and at a minimum no less than quarterly, to review all approved and unapproved overtime, including Incremental Overtime, paid during prior pay period(s). The Overtime Committee will be chaired by the Budget Director and at a minimum shall include the Superintendent or their designee and the Director of Nursing or their designee.
Reasons for Issue
VHC stated that most of the undocumented overtime is related to incremental overtime. In addition, VHC updated its Overtime Policy since our last audit to include an Overtime Committee that reviews all overtime. However, VHC was unable to provide us with sufficient evidence that the Overtime Committee’s meetings occurred during the audit period. Therefore, the design and implementation of these controls are not effective, as VHC continues to have issues with documenting and approving overtime, including incremental overtime.
Recommendation
VHC should enhance its policies and procedures by establishing effective monitoring controls that are properly designed and implemented to ensure that it properly documents the need and prior approval for overtime, including incremental overtime worked.
Auditee’s Response
The controls now in place are a direct result of the establishment of EOVS and the appointment or hiring of new leadership at MVH Chelsea under the current Administration.
EOVS and MVH Chelsea leadership have implemented comprehensive oversight of time management and overtime authorization. The Deputy Executive Director, Chief Financial Officer and Budget Director jointly reviewed each payroll cycle. The CFO’s office produces detailed management reports tracking overtime, premium pay, callback pay, and related categories. These are audited by the Budget Director to verify proper authorization and identify trends. Meetings are held to review overtime utilization following each payroll cycle with department leadership to discuss findings and develop corrective actions to reduce unnecessary overtime utilization. The CFO also provides these reports directly to EOVS leadership, ensuring centralized, cabinet-level financial oversight.
It was suggested in the audit report that the “overtime occurrences indicated staffing shortages” and that the overtime “was not unwarranted...” With support from EOVS and the now full human resources department at Chelsea there have been 71 new licensed and CNA staff hired since March 2023 with an additional 12 who are pending offers.
Auditor’s Reply
Based on its response, VHC is taking measures to address our concerns regarding this matter, and our office will follow up in approximately six months, as part of our post-audit review process.
| Date published: | January 14, 2026 |
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