Audit: FL City's Fire, Police Department OT Out of Control

WEST PALM BEACH, FL—At a time when the city police and fire unions are negotiating substantial raises, an internal audit found both departments have lost control of overtime they're been doling out.

Other major departments showed a similar loss of spending control, including Fire Rescue, Public Utilities, Development Services and Public Works, the report said.

The 70-page report, issued Sept. 8 by Chief Internal Auditor Beverly Mahaso, said the city's overtime expense has almost doubled in the last five years, reaching almost $13 million in Fiscal Year 2019.

"The Police Department had a significant breakdown of controls and lacked adequate oversight surrounding hours worked by police officers," the audit report said. The Patrol Division overtime budget increased 215 percent over eight years, far more than the city's population growth, and at a time when crime fell by 25 percent.

"The associated costs in some cases doubled employees’ salaries," Mahuso wrote.

In Fiscal Year 2019, she added, 20 earners officers logged 1,362 to 2,210 hours of overtime. These top 20 overtime earners made between $171,000 to $233,000 each, the report said. "In other cases, inappropriate payments were made to officers whose hours overlapped, meaning that they logged work hours for multiple locations at the same time."

"Chief Frank Adderley continues to examine the results of the audit to make the necessary changes," he said through a spokesman Monday.

Why so much overtime?

The department has attributed some of this year's overtime spending to policing of civil rights protests and to compensating for a staff shortage. However, the audit said the problems go back at least eight years.

The department also has pointed to faulty software as contributing to mistakes in registering overtime on the department's payroll program.

Departments cited in the report largely agreed with its recommendations for tightening controls, reporting and supervision of overtime payments.

The city commission last week gave initial approval to a $194 million budget for Fiscal Year 2021. To balance that budget, which is required by state law, required closing a $10 million spending gap by increasing property tax collections by roughly 5 percent and eliminating about 50 positions in the city government. One big reason cited for the gap: The coronavirus pandemic has reduced sales tax and other revenues while increasing spending.

Even as that budget nears final approval Sept. 24, the city has come to an impasse in negotiations with the police and fire unions, whose prospective pay increases could require additional cuts elsewhere.

In a letter to constituents, Mayor Keith James said the city offered police a 5 percent "market adjustment" raise, to bring the city's lagging pay scale closer to that of other Palm Beach County cities, in addition to a 5 percent step raise upon officers' annual work anniversaries. The Police Benevolent Association countered with a demand for a 15.5 percent market adjustment.

Similarly, while the city offered firefighters a 5.25 percent market adjustment raise, the International Association of Firefighters is asking for a 10 percent market adjustment raise. The city's offers alone would increase the police and fire budgets by a total of $1.2 million.

The issue is headed to a magistrate.

Police, Fire: Pay is not competitive with other municipalities

West Palm Beach PBA President Dennis Hardiman said Friday the police union has been negotiating in good faith to make police pay competitive with neighboring municipalities.

"Over the last year, numerous West Palm Beach police officers have departed the agency due to low pay," he said. "The West Palm Beach Police Department is 18th in the county for compensation, yet our dedicated police officers have enhanced public safety, as evidenced by the fact that violent crimes and homicides are down by more than 50 percent.... It’s not about just dollars and cents; It’s about maintaining the highest qualified police force to maintain the highest levels of public safety."

Jayson French, president of the West Palm Beach Association of Firefighters, also said low pay is making the Fire-Rescue Department less competitive and that firefighters and paramedics are facing increasing challenges from the coronavirus and hurricanes.

Firefighters have proposed savings to offset the cost of higher pay but the city refuses to come to the table, he said.

Mayor Keith James said at a mayor-commission work session Monday morning that he was confident middle ground would be found through mediation and that the public safety departments will continue to be strong, "even if they don't get what they hope to get."

While the administration struggled to overcome declining revenues, the audit report found "a breakdown" of overtime controls, "due to poor adherence and poor enforcement of payroll policies and procedures.

"This resulted in excessive amounts of overtime and time cards that were not approved and was exacerbated by the current practice of processing and paying time cards that have not been approved," the report said. During each pay period in Fiscal Year 2019, an average of 11 percent of the approximately 1,700 time cards processed for payment never got a supervisor's approval, it said.

The report also faulted the Finance and Police departments for under-staffing their payroll duties. Finance has one person who processes payroll for the whole city. Likewise, police have one person who manages that department's whole payroll for submission to Finance.

"The complexity of the Police Department’s various work hours (regular, overtime, extra duty) requires additional resources to help mitigate the breakdown in controls identified in the report," the report said.

The good news, the report said, was the city's response to the auditor's recommendations for procedural and staffing improvements. "We found knowledgeable and dedicated personnel within Police, Fire, Public Utilities, Development Services, Public Works and Parks and Recreation that were receptive to our recommendations for improvement."

Staff Writer Chris Persaud contributed to this report.

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