Virginia could put some $50 million of taxpayer funds to better use by tighter oversight of overtime payments and trying a new approach at behavioral health facilities, the Office of the Inspector General said.
It found that Virginia state agencies’ overtime payments for the 11 months that ended May 31, 2023, had increased by 90% since the 2010 decision to leave overtime pay decisions with individual state agencies instead of the state’s central personnel management office. That increase is not adjusted for the pay increases state employees have received over those dozen years.
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State agencies have spent more than $90 million a year on overtime for five of the past six years, OSIG reported.
The office’s performance audit of 21 state agencies found two specific examples of cost savings.
They included an estimated $6.5 million if the state’s behavioral health facilities – its eight adult mental hospitals as well as its children’s facility, its training center for people with developmental disabilities, its rehabilitation center for sexual offenders and its medical center — could follow a private sector approach for direct care staff workloads, with three weekly shifts of 12 hours each.
The audit also found 16 of 19 timesheets it reviewed at the Department of Health did not have enough documentation to justify overtime payments, resulting in $399,442 of questioned costs.
The Department of Behavioral Health and Development Services has been testing the three-shift approach since 2020 at Western State Hospital in Staunton, where 10 direct care staff volunteered to work the three-shift schedule in one ward while receiving pay for a four-hour supplemental shift.
That supplemental shift was needed to ensure they were paid for 40 hours of work a week. The state does not allow employees to receive full-time employees’ benefits if they work fewer than 40 hours a week. The three-shift schedule without the supplement would come to just 36 hours.
The volunteers’ shift schedule cut overtime costs on the ward by 36%, which the inspector general said would translate to a nearly $6.5 million reduction systemwide across all of the department’s 12 facilities if it had been put in place in 2022. The department’s overtime costs have increased from a bit more than $5 million in 2010 to about $20 million in 2022, the inspector general’s report noted.
“DBHDS facilities have experience increased overtime costs and are at a disadvantage with recruiting and retaining staff. This is in part because they are unable to schedule direct care staff similar to the industry standards utilized by private sector hospitals,” the audit report said.
The behavioral health department said it agreed with the OSIG findings and recommendation to work with the Department of Human Resource Management to move to a three-shift model.
The inspector general’s audit also found that the Department of Human Resource Management should review its overtime pay guidelines to include minimum internal control requirements, including procedures for monitoring overtime.
The department should also say whether it is appropriate for agencies to pay staff when they are taking leave and working overtime simultaneously, the audit report said. It did not give any examples of this.
In addition, the department should require that state agencies have documented overtime policies, the audit said.
At the health department, in addition to the lack of documentation on timesheets, the audit found that the department did not always pay overtime in a timely way, the audit found.
In an earlier report, the Auditor of Public Accounts also identified problems with the Department of Health’s ability to pay overtime in a prompt manner. In an audit of the fiscal year that ended in June 2022, the auditor determined some employees received lump sum payments several months or years after they worked the overtime. As of November 2022, there were still 160 employees waiting to get paid for their overtime work. The health department had been under stress from the pandemic, the report noted.
The inspector general also found:
- The State Police timekeeping process is duplicative, with two separate reviews of timesheets.
- Patrick Henry Community College was not keeping all its adjunct staff’s timesheets for the required five years.
- The health department and Virginia Racing Commission were not including dates on timesheet signatures.
“OSIG supports the use of overtime when it’s appropriate,” said State Inspector General Michael Westfall. “This report simply highlights the need for stronger policies – and communicating those policies.”