Thursday, October 22, 2020

Fiscal board: Over $84 million overpaid at Education Department

By on September 30, 2020

(Juan J. Rodríguez/CB)
Natalie Jaresko, executive director of the Financial Oversight and Management Board (Juan J. Rodríguez/CB)

Director Jaresko says payroll money needs to be returned

SAN JUAN — The executive director of the Financial Oversight and Management Board (FOMB), Natalie Jaresko, published data from the Department of Education (PRDE) that shows the agency “erroneously disbursed” payroll payments some 36,000 times from 2007 to 2020, for a combined total of $84,227,507.

“It is not just a couple of mistakes or a wrong data entry here or there or maybe a quick short delay in entering up-to-date information. What the data that’s been shared with us by the government shows is a systemic failure of the process that allowed thousands of former employees to receive money they did not earn and that they now need to return,” Jaresko said.

Jaresko explained that the 36,425 incidents pertain to 17,000 employees, of which 15,000 are former employees that possibly continued to receive checks after their employment with the department ended. However, Jaresko said they don’t know how much of the $84 million belongs to that group. 

The board director said the problem stems from the fact that the department continues to use a manual time and attendance system despite having been paying the licensing fees for the Kronos automatic time and attendance system since 2007. In the current system, regional directors must notify of the departure of an employee and that is happening with some delays. Likewise, the more than 40,000 Education employees are not required to enter into Kronos to punch in daily. 

“To the extent that manual time and attendance systems exists, validation of that manual system is irregular, connection to payroll is irregular, and the potential for inaccuracies and potentially fraud comes with such and inefficient systems,” Jaresko said, later adding that the department “needs to implement this time and attendance system that was required by the fiscal plan in which PRDE itself committed to implement during the oversight board’s public hearing on education in November. We know that there’s clearly been insufficient progress to date since that hearing.”

The fiscal board is requesting that the time and attendance is implemented and fully linked to the payroll system by the end of the year. To address this issue, the board is in the process of hiring a specialist that will work with the department on implementing the automatic time and attendance system, which received some complaints by employees and employees’ unions on Monday because of a lack of training and other information-technology-related issues. 

Additionally, the board hired UHY to further validate the upcoming findings from the evaluation of the department’s general budget process. It is “the same firm for forensic accounting that we had used previously to do some work on the BDO agreements as requested by members of Congress,” Jaresko said. 

As for the possibility of recovering the money, Jaresko said the department has a 15 percent recovery rate but the fiscal panel are going to work with other fiscal entities in the government such as the government’s chief financial officer, Fiscal Agency and Financial Advisory Authority, and the Treasury Department, which is the only one of the 13 government agencies and instrumentalities that have completed the integration of the automated attendance system with their payroll system.