oversight

District of Columbia Government: Overtime Costs Exceed Those of Neighboring Governments

Published by the Government Accountability Office on 1997-09-11.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                   United States General Accounting Office

GAO                Briefing Report to the Ranking Minority
                   Member, District of Columbia
                   Subcommittee, Committee on
                   Appropriations, House of
                   Representatives
September 1997
                   DISTRICT OF COLUMBIA
                   GOVERNMENT
                   Overtime Costs Exceed
                   Those of Neighboring
                   Governments




GAO/GGD-97-159BR
                   United States
GAO                General Accounting Office
                   Washington, D.C. 20548

                   General Government Division

                   B-277498

                   September 11, 1997

                   The Honorable James P. Moran
                   Ranking Minority Member
                   District of Columbia Subcommittee
                   Committee on Appropriations
                   House of Representatives

                   Dear Mr. Moran:

                   This briefing report responds to your request for information on the
                   District of Columbia government’s overtime expenditures.1 It presents
                   information on (1) the amount and extent of the District’s overtime
                   expenditures for fiscal years 1992 through 1997,2 (2) reasons provided by
                   District officials for those overtime expenditures, (3) how the District’s
                   overtime expenditures compared with those of selected surrounding
                   jurisdictions for fiscal year 1996, and (4) how the District’s overtime
                   management policies compared with those of the selected surrounding
                   jurisdictions.3 On September 3, 1997, we briefed your office on the results
                   of our review. This report provides the substance of that briefing.


                   In fiscal year 1996, which was the most recently completed fiscal year, the
Results in Brief   District government’s overtime expenditures totaled approximately
                   $82.9 million, which represented about 6 percent of the District’s total
                   salary costs. Between fiscal years 1992 and 1996, the District of Columbia
                   government’s overtime expenditures ranged from a low of approximately
                   $67.2 million in fiscal year 1995 to a high of approximately $98.8 million in
                   fiscal year 1994. The District’s overtime expenditures, when measured as a
                   percentage of total salary costs, ranged from a low of 4.6 percent in fiscal
                   year 1995 to a high of 6.3 percent in fiscal year 1994. Through April of
                   fiscal year 1997, these expenditures were approximately $53.4 million,
                   which represented 7.3 percent of total salary costs. In fiscal year 1996,
                   eight departments accounted for 97 percent of the District government’s
                   overtime expenditures. These departments were Corrections (DOC),
                   Metropolitan Police (MPD), Human Services (DHS), Water and Sewer


                   1
                    For the purpose of this report, we used the definition of overtime pay in the Fair Labor Standards Act,
                   29 U.S.C. 201, et seq., as amended.
                   2
                   The District follows an October 1 to September 30 fiscal year. Fiscal year 1997 data provided by the
                   District are through April 1997.
                   3
                    As agreed with your office, we compared the District’s overtime expenditures for fiscal year 1996 and
                   overtime management policies to those of the following neighboring governments: the city of
                   Baltimore and Montgomery and Prince George’s Counties, Maryland; and Fairfax County, Virginia.



                   Page 1                   GAO/GGD-97-159BR District of Columbia Government Overtime Costs
B-277498




Authority (WASA), Fire and Emergency Medical Services (FEMS), Public
Schools (PS), D.C. General Hospital, and Public Works (DPW). Four of these
eight departments in fiscal year 1996—DOC, MPD, DHS, and WASA—accounted
for 74 percent of the District’s total overtime expenditures. MPD and DHS
were consistently among the four highest users of overtime from fiscal
year 1992 through 1996. (See Briefing Section II for additional information
on the amount and extent of the District’s overtime expenditures.)

The reasons provided by District officials for the District’s overtime
expenditures generally varied by department. Some reasons for overtime
expenditures commonly reported by District officials included staff
management policies that seek to address staff shortages, workforce
reductions, and the inability to fill position vacancies (in DOC, MPD, DHS,
FEMS, DPW, D.C. General Hospital, and WASA); addressing external
mandates, such as consent decrees and court orders that specify staffing
or service levels (in DOC, DHS, FEMS, PS, and WASA); infrastructure
deficiencies, such as the need to repair or maintain out-of-date facilities or
equipment (DOC, DPW, WASA, and D.C. General Hospital); and mission
requirements, such as the necessity to provide functions or services
related to public safety (MPD and DPW). (Briefing Section III provides
reasons that District officials cited for the District’s overtime expenditures
by departments.)

The District’s governmentwide overtime expenditures as a percentage of
total salary costs (6 percent) were higher than those of the selected
surrounding jurisdictions in fiscal year 1996. Governmentwide overtime
expenditures as a percentage of total salary costs for the city of Baltimore
were 5 percent; for Montgomery County, 5.3 percent; for Prince George’s
County, 2.8 percent; and Fairfax County, 2 percent. (Differences that could
affect overtime use between the operations of the District and four
selected governments are discussed in Briefing Sections III and IV.
Briefing Section IV provides a comparison of overtime expenditures as a
percentage of salary costs by departments and governmentwide
percentages.)

The District government and the governments of all of the selected
surrounding jurisdictions had written overtime policies that reported
compliance with the Fair Labor Standards Act (FLSA). However, the
policies of the District and the selected surrounding jurisdictions varied in
their requirements for advance approval of overtime, written justification
for overtime work, provisions for jurisdiction-level and department-level
overtime audits, and the reporting of overtime pay in the annual budget.



Page 2             GAO/GGD-97-159BR District of Columbia Government Overtime Costs
             B-277498




             Only Fairfax County’s overtime management policies addressed all of
             these policy elements. (Briefing Section V provides a comparative
             summary of the governments’ overtime management policies.)


             Overtime is often used by public and private sector organizations as a
Background   management tool to provide services to constituents and customers, and
             its use has been increasing over the past several years.4 Some employers
             schedule overtime work on a regular basis, rather than hire additional
             workers when they perceive the cost of overtime premiums to be lower
             than the costs of hiring additional staff.

             FLSA establishes minimum wage, overtime compensation, recordkeeping,
             and other provisions that affect full- and part-time employees in the
             private sector and in federal, state, and local governments. In general,
             employees covered by the act must receive compensation for hours
             worked in excess of 40 hours in a workweek, at a rate of not less than time
             and one-half their regular rate of compensation. The District government’s
             obligation to comply with the overtime provision of FLSA began on April 15,
             1986.5

             On December 27, 1996, the District of Columbia Financial Responsibility
             and Management Assistance Authority (Authority) enacted an order to
             control District government operating expenses. The Authority’s order
             stated that some District government employees had received overtime
             pay, although they had performed less than 40 hours of work in a week,
             thus contributing to the District’s operating deficit. This order provided
             that District government employees are only to receive compensation for
             overtime work in excess of 40 hours per week (or other applicable tour of
             duty) of work actually performed, in accordance with the provisions of




             4
               Economic Report of the President, Feb., 1997; Darrell E. Carr, “Overtime Work: An Expanded View,”
             Monthly Labor Review, Bureau of Labor Statistics, Nov. 1986; and Barry Bluestone and Stephen Rose,
             “Overworked and Underemployed: Unraveling an Economic Enigma,” in The American Prospect, No.
             31 (March-April 1997).
             5
              In 1974, Congress extended FLSA to state and municipal government employees, including the
             District of Columbia government. However, in 1976 the Supreme Court ruled that the 1974 amendment
             to FLSA was unconstitutional. Subsequently, in 1985 the Supreme Court overturned its earlier decision
             and upheld the legality of applying FLSA to state governments. However, being aware of potential
             hardship that might result from immediate application of FLSA to state and municipal governments,
             Congress enacted legislation, which delayed application of the act to the state and municipal
             governments until April 15, 1986.



             Page 3                  GAO/GGD-97-159BR District of Columbia Government Overtime Costs
              B-277498




              FLSA.6 The order, in effect, prohibited the District from including annual
              and sick leave or other scheduled leave in computing overtime and from
              paying overtime to employees who worked more than eight hours in a day
              unless they exceeded 40 hours of work per week. The Authority estimated
              that this order should result in fiscal year 1997 cost savings of $5.4 million.
              On March 12, 1997, the District government revised its personnel
              regulations to implement the Authority’s order. The District of Columbia
              Fiscal Year 1998 Budget and Financial Plan estimated fiscal year 1998 cost
              savings resulting from the Authority’s order at approximately $8.8 million,
              assuming that overtime costs could be reduced by 13 to 14 percent as a
              result of this initiative.

              A May 1997 Authority report stated that the District government had not
              effectively planned or controlled its workforce and thereby contributed to
              overtime costs that the Authority characterized as “staggering and not
              well-planned.”7 The report stated that one result of the District’s lack of
              systematic personnel planning was the extensive amount of overtime
              being worked by personnel. The report also noted that the District as a
              whole does not adequately budget for overtime and that much of this
              overtime was frequently authorized for the same employees each pay
              period.


              To determine the amount and extent of the District’s overtime
Scope and     expenditures, we obtained data from District officials on full-time
Methodology   equivalent employment (FTE)8 levels, salary, and overtime expenditures.9
              We reviewed and analyzed these data, which depicted the District as a
              whole and its individual departments. We focused on eight
              departments—DOC, FEMS, DPW, PS, MPD, DHS, WASA, and D.C. General
              Hospital—because they accounted for approximately 97 percent of the
              District government’s fiscal year 1996 total overtime expenditures. We


              6
               In May 1997, labor unions representing District government employees brought a suit against the
              Authority and the District’s Chief Financial Officer, contending that the Authority’s Dec. 27, 1996,
              order violates the applicable collective bargaining agreements, the District Code, and the U. S.
              Constitution. The suit was still pending as this report went to printing.
              7
                Human Resource Management Reform: A Strategic Approach, The District of Columbia Financial
              Responsibility and Management Assistance Authority, May 1997.
              8
               An FTE is a workforce measurement equal to a work year of 2,080 hours, rather than an on-board
              head count. This could mean, for example, one employee on a full-time schedule of 40 hours for 52
              weeks or two part-time employees for 20 hours per week each for the same period.
              9
               We did not adjust salary and overtime expenditures to constant dollars to account for inflation. Our
              primary comparative measure, overtime expenditures as a percentage of salary costs, is unaffected by
              inflation.



              Page 4                    GAO/GGD-97-159BR District of Columbia Government Overtime Costs
B-277498




analyzed trend data for fiscal year 1992 through April of fiscal year 1997
for these departments.

To determine the reasons for the District’s overtime expenditures, we
interviewed officials representing the District government (Office of the
Chief Financial Officer; Chief Financial Officers of the eight selected
departments, Office of the City Administrator; Office of Personnel;
Corporation Counsel; City Council; Inspector General, and Auditor’s
Office), the Authority, and labor union representatives of selected District
departments. We asked them to identify factors that may account for the
District’s overtime usage. We also reviewed overtime expenditure data
provided by several District departments which was categorized by the
reasons for overtime usage.

To compare District government overtime expenditures with the selected
jurisdictions that we agreed with your office to review, we obtained
information from the budget and finance offices of city of Baltimore;
Montgomery and Prince George’s Counties, Maryland; and Fairfax County,
Virginia governments on FTE levels, salary, and overtime expenditures. We
compared the District and the four governments by the following
categories: (1) overtime expenditures and (2) overtime expenditures as a
percentage of salary costs. Our comparisons were done by jurisdictions’
and major departments’ totals, using fiscal year 1996 data provided by
these governments. The District follows an October 1 to September 30
fiscal year, whereas the other governments follow a July 1 to June 30 fiscal
year. We were not able to present data on all departments in which we
focused our review in the District for the four other governments because
some did not have comparable departments. For example, the District
government operates its own corrections system whereas corrections is a
state government function in Maryland; therefore, the city of Baltimore
does not operate a corrections function.

To compare the overtime management policies of the District with those
of selected surrounding jurisdictions, we interviewed government officials
in all five jurisdictions and reviewed the five governments’ written
overtime policies. On the basis of our interviews and review of the
governments’ overtime policies, we developed a list of elements for
comparison. The elements that we used in our comparisons were whether
the governments (1) had written overtime policies, (2) reported
compliance with FLSA, (3) required advance approval of overtime,
(4) required written justification for overtime work, (5) provided for




Page 5             GAO/GGD-97-159BR District of Columbia Government Overtime Costs
                           B-277498




                           jurisdiction- and department-level audits of overtime, and (6) provided for
                           overtime pay in their annual budgets.

                           We also reviewed literature and interviewed officials from city and county
                           management and related associations. We did our work between May and
                           August 1997 in accordance with generally accepted government auditing
                           standards. Due to the short time frame of this review, we did not verify the
                           data provided by the District and the other governments.


Comments From the          We requested comments on a draft of this report from the Mayor of the
District of Columbia and   District of Columbia, the District’s City Administrator, the District’s Chief
Other Governments          Financial Officer, and the District of Columbia Financial Responsibility
                           and Management Assistance Authority. We also requested comments from
                           the budget and finance directors of the governments of the city of
                           Baltimore; Prince George’s County; and Montgomery County, MD; and
                           Fairfax County, VA. We received comments from all of the officials or their
                           designees in mid-August confirming that the material in the report
                           accurately depicted their governments. We incorporated their clarifying
                           information where appropriate.


                           We are sending copies of this briefing report to the Chairman of this
                           Subcommittee and to the Chairpersons and Ranking Minority Members of
                           other congressional committees that have responsibilities related to
                           District of Columbia issues. We are also sending copies to the Mayor of the
                           District of Columbia, the District’s City Administrator, the District’s Chief
                           Financial Officer, the District of Columbia Financial Responsibility and
                           Management Assistance Authority, and officials from the other four
                           governments we reviewed. We will make copies available to others on
                           request.




                           Page 6            GAO/GGD-97-159BR District of Columbia Government Overtime Costs
B-277498




The major contributors to this report are listed in appendix II. If you need
any additional information or have further questions, please contact me, or
J. Christopher Mihm, Acting Associate Director, on (202) 512-8676.

Sincerely yours,




L. Nye Stevens
Director,
Federal Management and Workforce Issues




Page 7             GAO/GGD-97-159BR District of Columbia Government Overtime Costs
Contents



Letter                                                                                               1


Briefing Section I                                                                                  10
                       Review Objectives                                                            10
Introduction           Scope and Methodology                                                        11

Briefing Section II                                                                                 12
                       District Overtime Expenditures, FY 1992-1997                                 12
Amount and Extent of   District Overtime Expenditures by Major Departments, FY 1996                 14
the District           Primary District Government Overtime Users, FY 1996                          16
                       Trends for Primary District Government Overtime Users, FY                    18
Government Overtime      1992-1997
Expenditures
Briefing Section III                                                                                20
                       Summary of Reasons Reported for Overtime Use by District                     20
Reasons Reported for     Departments
District Government    Reported Reasons for Overtime Use: 1. Staff Management                       22
                         Policies
Overtime               Reported Reasons for Overtime Use: 2. External Mandates                      24
Expenditures           Reported Reasons for Overtime Use: 3. Infrastructure                         26
                         Deficiencies
                       Reported Reasons for Overtime Use: 4. Mission Requirements                   28

Briefing Section IV                                                                                 30
                       Comparative Governments’s Overtime as a Percentage of Salary,                30
District Government      FY 1996
Overtime
Expenditures
Compared With
Surrounding
Jurisdictions




                       Page 8           GAO/GGD-97-159BR District of Columbia Government Overtime Costs
                        Contents




Briefing Section V                                                                                   32
                        Summary of Governments’ Overtime Management Policies                         32
District Government
Overtime
Management Policies
Compared With Those
of Surrounding
Jurisdictions
Appendix I                                                                                           34

Salary Costs of
Selected Government
Departments, FY 1996
Appendix II                                                                                          35

Major Contributors to
This Briefing Report




                        Abbreviations

                        DHS        Department of Human Services
                        DOC        Department of Corrections
                        DPW        Department of Public Works
                        FEMS       Fire and Emergency Medical Services
                        FLSA       Fair Labor Standards Act
                        FTE        Full Time Equivalent
                        FY         Fiscal Year
                        MPD        Metropolitan Police Department
                        PS         Public Schools
                        WASA       Water and Sewer Authority
                        WSSC       Washington Suburban Sanitary Commission


                        Page 9           GAO/GGD-97-159BR District of Columbia Government Overtime Costs
Briefing Section I

Introduction




      GAO            Review Objectives

       To provide overtime information on the following:

            extent and amount of the District's expenditures for FY 92-97;

            reasons provided by District officials for those expenditures;

            how the District's expenditures compared with the selected
            jurisdictions for FY 1996:

            - City of Baltimore, MD             - Montgomery County, MD
            - Fairfax County, VA                - Prince George's County, MD

            how the District's overtime management policies compared with
            those of the selected jurisdictions.


                              FY 1997 data are through April 1997.




                              Page 10                 GAO/GGD-97-159BR District of Columbia Government Overtime Costs
                    Briefing Section I
                    Introduction




GAO     Scope and Methodology

Reviewed the selected governments: District of Columbia; City
of Baltimore, Montgomery and Prince George's Counties, MD;
and Fairfax County, VA.

   Collected data on governments' salary, FTE, overtime pay,
   and overtime management policies.

   Interviewed District government officials and reviewed
   records to determine reasons for the overtime expenses.

   Compared the five governments' overtime expenditures as a
   percentage of salary.

   Compared the five governments' overtime management
   policies.




                    Page 11              GAO/GGD-97-159BR District of Columbia Government Overtime Costs
Briefing Section II

Amount and Extent of the District
Government Overtime Expenditures



      GAO           District Overtime Expenditures,
                    FY 1992-1997
                                                                               Fiscal years
                                        1992                 1993              1994             1995             1996               1997 a
        Number of FTE's               34,015               35,404           38,683            38,583           36,385              32,573

        Expenditures
          (Dollars in thousands)

           Salary   b              $1,522,876         $1,513,854       $1,566,747       $1,448,569       $1,381,633          $734,304

           Overtime                   77,513               75,187           98,786            67,238           82,931              53,417
        Overtime as a                   5.1%                 5.0%              6.3%             4.6%             6.0%               7.3%
        percentage of
        salary




                                                Note: The District government follows an October 1 - September 30 fiscal year.

                                                a
                                                Fiscal Year (FY) 1997 data are through April 1997.

                                                b
                                                    Salary excludes overtime, benefits, Social Security, and other compensation.

                                                Source: District of Columbia Chief Financial Officer.




                                                Page 12                    GAO/GGD-97-159BR District of Columbia Government Overtime Costs
                    Briefing Section II
                    Amount and Extent of the District
                    Government Overtime Expenditures




District Overtime   The data in this table represent the District’s total salary and overtime and
Expenditures, FY    include all general and enterprise funds’ full-time equivalent employment
1992-1997           (FTE), salary, and overtime for FY 1992 through FY 1997 (FY 1997 data are
                    through April 1997).

                    Between FYs 1992 and 1996, the years for which we provide complete FY
                    data, the District government’s total salary expenditures ranged from a
                    low of $1,381,633,000 in FY 1996 to a high of $1,566,747,000 in FY 1994. Over
                    this same period, the District’s overtime expenditures ranged from a low
                    of $67.2 million in FY 1995 to a high of $98.8 million in FY 1994. The
                    District’s overtime as a percentage of salary costs over this period ranged
                    from a low of 4.6 percent in FY 1995 up to a high of 6.3 percent in FY 1994.

                    The District’s overtime as a percentage of salary costs averaged
                    5.7 percent from FY 1992 through April 1997.




                    Page 13             GAO/GGD-97-159BR District of Columbia Government Overtime Costs
                                    Briefing Section II
                                    Amount and Extent of the District
                                    Government Overtime Expenditures




GAO   District Overtime Expenditures by
      Major Departments, FY 1996
      Dollars in thousands
      25,000


                21,590

      20,000
                           18,070



      15,000


                                    11,235

      10,000                                  9,542


                                                      6,186
                                                               5,257    5,040
       5,000
                                                                                 3,650
                                                                                              2,343


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           Overtime expenditures for eight departments, $80,588 (97% of total)

           Total overtime for the District Government, $82,931




                                    Source: District of Columbia Chief Financial Officer.




                                    Page 14                   GAO/GGD-97-159BR District of Columbia Government Overtime Costs
                        Briefing Section II
                        Amount and Extent of the District
                        Government Overtime Expenditures




District Overtime       The District government’s overtime expenditures totaled $82,931,000 in FY
Expenditures by Major   1996.
Departments, FY 1996
                        For FY 1996, eight departments accounted for 97 percent of the District
                        government’s overtime expenditures—Corrections (DOC), Metropolitan
                        Police (MPD), Human Services (DHS), Water and Sewer Authority (WASA),
                        Fire and Emergency Medical Services (FEMS), Public Schools (PS), D.C.
                        General Hospital, and Public Works (DPW).




                        Page 15             GAO/GGD-97-159BR District of Columbia Government Overtime Costs
                                       Briefing Section II
                                       Amount and Extent of the District
                                       Government Overtime Expenditures




GAO      Primary District Government Overtime
         Users, FY 1996
           Percentage
           30

                     26
           25

                                  22

           20



           15                           14
                                                 12

           10

                                                           7
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                           Four departments accounted for 74 percent of the total overtime expenditures.




                                       Source: GAO analysis of data provided by District of Columbia Chief Financial Officer.




                                       Page 16                   GAO/GGD-97-159BR District of Columbia Government Overtime Costs
                      Briefing Section II
                      Amount and Extent of the District
                      Government Overtime Expenditures




Primary District      For FY 1996, DOC, MPD, DHS, and WASA accounted for 74 percent
Government Overtime   ($60,437,000) of the District government’s overtime expenditures. DOC
Users, FY 1996        accounted for over one-fourth of the District’s total overtime expenditures
                      in FY 1996.




                      Page 17             GAO/GGD-97-159BR District of Columbia Government Overtime Costs
                              Briefing Section II
                              Amount and Extent of the District
                              Government Overtime Expenditures




GAO   Trends for Primary District Government
      Overtime Users', FY 1992-1997
      Overtime as a percentage of department's total salary expenditures
      30



      25



      20



      15



      10



       5



       0
           1992              1993                1994                1995                1996                1997
           Fiscal years


                          Water and sewer                                          District total
                          Police                                                   Corrections
                          Human services




                              Note: FY 1997 data are through April 1997.

                              Source: GAO analysis of data provided by District of Columbia Chief Financial Officer.


                              Between FYs 1992 and 1996, the District’s overtime expenditures as a
                              percentage of salary costs ranged from a low of 4.6 percent in FY 1995 to a
                              high of 6.3 percent in FY 1994. Through April of FY 1997, the District’s
                              overtime as a percentage of salary costs was 7.3 percent. The overtime
                              expenditures as a percentage of salary costs of the four primary District
                              overtime users in FY 1996—DOC, MPD, DHS, and WASA—varied during this



                              Page 18                   GAO/GGD-97-159BR District of Columbia Government Overtime Costs
Briefing Section II
Amount and Extent of the District
Government Overtime Expenditures




period. For example, the overtime of DOC, MPD, and WASA as a percentage of
salary costs increased while the overtime of DHS decreased.

DOC had the largest increase in overtime expenditures as a percentage of
salary costs of the eight departments. DOC’s overtime expenses as a
percentage of salary costs increased from 2.9 percent in FY 1992 to
17.8 percent in FY 1996. Through April of FY 1997, DOC’s overtime
expenditures as a percentage of salary costs were 22.4 percent.

MPD’s overtime expenditures as a percentage of salary costs ranged from a
low of 7.3 percent in FY 1995 to a high of 12 percent in FY 1994. Through
April of FY 1997, MPD’s overtime expenditures as a percentage of salary
costs were 16 percent.

DHS’ overtime expenditures as a percentage of salary costs were relatively
stable between FYs 1992 and 1996. DHS’ overtime payments ranged from a
low of 4.5 percent in 1995 to 6.4 percent in FY 1992. Through April of FY
1997, DHS’ overtime expenditures as a percentage of salary costs were
5.4 percent.

WASA’s overtime expenditures as a percentage of salary costs ranged from
a low of 16.8 percent in FY 1992 to a high of 26.1 percent in FY 1994.
Through April of FY 1997, WASA’s overtime expenditures as a percentage of
salary costs were 23.7 percent.

The FY 1996 primary users of overtime as a percentage of salary
costs—DOC, MPD, DHS, and WASA, were not consistently the largest District
overtime users. For example, of the eight departments which accounted
for 97 percent of the District’s FY 1996 overtime expenditures, DOC was the
eighth highest user of overtime in FY 1992 and rose to the highest user in
FYs 1995 and 1996. MPD and DHS were consistently among the four highest
users of overtime from FY 1992 through FY 1996. Between FYs 1992 and
1996, FEMS and WASA were occasionally among the top four overtime users
as a percentage of salary costs.




Page 19             GAO/GGD-97-159BR District of Columbia Government Overtime Costs
Briefing Section III

Reasons Reported for District Government
Overtime Expenditures



      GAO              Summary of Reasons Reported for
                       Overtime Use by District Departments
                                                                   Reasons
        Departments        1. Staff             2. External               3. Infrastructure        4. Mission
                              management           mandates                  deficiencies             requirements
                              policies

        Corrections
        Police
        Human Services
        Water and Sewer
        Authority
        Fire and
        Emergency
        Medical Services
        Public Schools

        D.C. General
        Hospital
        Public Works
        Total                    7                        5                         4                        2

                                     Reason reported by department



                                      Note: The District’s Water and Sewer Authority became an independent authority in October 1996.

                                      Source: District of Columbia Government departments’ Chief Financial Officers.




                                      Page 20                 GAO/GGD-97-159BR District of Columbia Government Overtime Costs
                            Briefing Section III
                            Reasons Reported for District Government
                            Overtime Expenditures




Summary of Reasons          In general, the reasons reported by Chief Financial Officers of the eight
Reported for Overtime Use   District government departments for incurring overtime expenses fell into
by District Departments     one of four categories:

                            Staff management policies refer to the manner whereby departments
                            have managed their staff to seek to address staff shortages, workforce
                            reductions, and the inability to fill position vacancies.

                            External mandates include court orders and negotiated consent decrees
                            and city and federal laws that mandate minimum service levels or timely
                            actions to remedy inadequately managed programs. According to the
                            District of Columbia Fiscal Year 1998 Budget and Financial Plan, the
                            District is currently subject to 39 court orders and mandates.

                            Infrastructure deficiencies involve the need to repair or maintain
                            out-of-date facilities or equipment such as water and sewer lines and
                            medical facilities.

                            Mission requirements involve the necessity to provide functions or
                            services related to public safety, such as police patrols and snow removal.




                            Page 21              GAO/GGD-97-159BR District of Columbia Government Overtime Costs
               Briefing Section III
               Reasons Reported for District Government
               Overtime Expenditures




GAO   Reported Reasons for Overtime Use:
      1. Staff Management Policies
      Seven District departments reported staff
      management policies as a reason for
      incurring overtime expenditures:

         Corrections
         Police
         Human Services
         Water and Sewer Authority
         Fire and Emergency Medical Services
         D.C. General Hospital
         Public Works
               Source: District of Columbia Government departments’ Chief Financial Officers.




               Page 22                 GAO/GGD-97-159BR District of Columbia Government Overtime Costs
                         Briefing Section III
                         Reasons Reported for District Government
                         Overtime Expenditures




Reported Reasons for     Chief Financial Officers of DOC, MPD, DHS, FEMS, DPW, WASA and D.C. General
Overtime Use: 1. Staff   Hospital reported that their staff management policies contributed to
Management Policies      overtime expenses.

                         DHS stated that one of the biggest drivers of overtime expenditures was the
                         shortage of personnel for mental health, hospital, and lab positions, which
                         was caused by DHS’ inability to fill these positions. DHS stated that high staff
                         turnover in key DHS functions, driven by job stress and low pay compared
                         with that of other local governments, has driven overtime expenses. For
                         example, DHS pointed to its Mental Health function, which it stated has had
                         approximately 200 vacancies over the prior 2 fiscal years. DHS noted that
                         most of its overtime was directly attributable to the need to provide
                         in-patient care, which is a 24-hour-a-day, 7-days-a-week operation.

                         D.C. General Hospital officials said that vacancies in occupations such as
                         nurses, physicians, and engineers, caused primarily by noncompetitive
                         salaries, required the hospital to use its existing staff to work longer hours
                         on overtime.

                         FEMS  reported that its current number of authorized positions is
                         insufficient, and to meet fire and emergency vehicle staffing requirements,
                         it uses its staff on overtime. FEMS also stated that when firefighters are
                         injured on duty, they are placed on Performance-of-Duty (POD) leave, and
                         the department stated that it manages this staff shortage by using
                         firefighters on overtime pay to backfill these positions. FEMS stated that
                         there are currently 36 firefighters that have been on POD an average of 2
                         years.




                         Page 23              GAO/GGD-97-159BR District of Columbia Government Overtime Costs
              Briefing Section III
              Reasons Reported for District Government
              Overtime Expenditures




GAO   Reported Reasons for Overtime Use:
      2. External Mandates
      Five District departments reported the
      need to address external mandates as a
      reason for incurring overtime
      expenditures:

        Corrections
        Human Services
        Water and Sewer Authority
        Fire and Emergency Medical Services
        Public Schools


              Source: District of Columbia Government departments’ Chief Financial Officers.


              Chief Financial Officers of DOC, DHS, WASA, FEMS, and PS reported that they
              used staff on overtime to address a variety of external mandates.

              According to the District of Columbia Fiscal Year 1998 Budget and
              Financial Plan, DOC operates under 13 court orders and consent decrees.
              For example, DOC stated that for the past three years it has had
              approximately 300 court-ordered correctional officer positions which it




              Page 24                 GAO/GGD-97-159BR District of Columbia Government Overtime Costs
Briefing Section III
Reasons Reported for District Government
Overtime Expenditures




has been unable to fill because of District-imposed hiring restrictions. DOC
stated that it has been required to provide coverage for these vacant
positions strictly on an overtime basis. DOC also said that its staff
deployment plan to satisfy a court order for the 24 hour-a-day operation of
prison watchtowers and other security posts at corrections institutions
has contributed to overtime. FEMS stated that its requirement to comply
with city laws, which specify minimum staff levels for the operation of
engines, ladder trucks, and ambulances, and prohibit the use of volunteer
firefighters, was a reason for overtime use. For example, when fire officers
call in sick or are not able to work for other reasons, the replacement staff
is paid overtime.

DHS operates several of its programs under 16 consent decrees or court
orders, according to the District of Columbia Fiscal Year 1998 Budget and
Financial Plan. For example, one DHS function affected by a court order,
which—due to a shortage of staff—DHS has decided to use staff on
overtime to address, is a requirement to process Medicaid payments in
specified time frames. WASA stated that consent decrees resolving lawsuits,
which mandated that certain tasks be performed to maintain or establish
water quality levels, have significantly contributed to WASA’s overtime
spending. PS stated it has used staff on overtime to address a District legal
requirement that boiler rooms be staffed 24 hours a day when boiler
equipment is operating.




Page 25              GAO/GGD-97-159BR District of Columbia Government Overtime Costs
                Briefing Section III
                Reasons Reported for District Government
                Overtime Expenditures




GAO   Reported Reasons for Overtime Use:
      3. Infrastructure Deficiencies
      Four District departments reported the
      need to address infrastructure deficiencies
      as a reason for incurring overtime
      expenditures:

         Corrections
         Water and Sewer Authority
         D.C. General Hospital
         Public Works



                Source: District of Columbia Government departments’ Chief Financial Officers.




                Page 26                 GAO/GGD-97-159BR District of Columbia Government Overtime Costs
                              Briefing Section III
                              Reasons Reported for District Government
                              Overtime Expenditures




Reported Reasons for          Chief Financial Officers of DOC, WASA, DPW, and D.C. General Hospital
Overtime Use: 3.              reported that the need to address infrastructure deficiencies contributed
Infrastructure Deficiencies   to overtime expenses.

                              For example, DOC officials noted that the National Council on Crime and
                              Delinquency assessed DOC’s operations and concluded that, if it had
                              state-of-the-art corrections facilities its overtime expenses would be
                              5 percent of base salaries. DOC noted that this would compare with the U.S.
                              Bureau of Prisons, which, according to the National Council on Crime and
                              Delinquency, has an overtime rate of 6 percent of base salaries.

                              D.C. General Hospital officials explained that overtime expenses were
                              unusually high in 1996, primarily due to unbudgeted emergency facility
                              repairs. Officials stated that a basement flood, power-plant storage tank
                              leak, and collapsed roofs caused a loss of electrical power that required
                              emergency procedures to be performed on overtime to maintain patient
                              care, provide security, and make facility repairs. Hospital officials
                              estimated that the flood alone cost approximately $3 million, much of it
                              for overtime expenses.

                              WASA noted that emergencies, such as water main breaks, sewer back-ups,
                              and equipment breakdown have caused a significant amount of
                              unscheduled overtime. WASA noted that its inability to obtain funding for
                              preventative maintenance since FY 1992 has contributed to the need to
                              perform emergency maintenance on an overtime basis.




                              Page 27              GAO/GGD-97-159BR District of Columbia Government Overtime Costs
                 Briefing Section III
                 Reasons Reported for District Government
                 Overtime Expenditures




GAO   Reported Reasons for Overtime Use:
      4. Mission Requirements
      Two District departments reported
      mission requirements as a reason for
      incurring overtime expenditures:

        Police

        Public Works




                 Source: District of Columbia Government departments’ Chief Financial Officers.




                 Page 28                 GAO/GGD-97-159BR District of Columbia Government Overtime Costs
                           Briefing Section III
                           Reasons Reported for District Government
                           Overtime Expenditures




Reported Reasons for       Chief Financial Officers of MPD and DPW reported that their mission
Overtime Use: 4. Mission   requirements contributed to overtime expenses.
Requirements
                           MPD reported that court appearances by police officers and crime fighting
                           initiatives have been the largest drivers of MPD’s overtime expenses. Court
                           appearance overtime expenses accounted for an average of 47 percent of
                           MPD’s total overtime expenditures from FY 1992 through April of FY 1997.
                           Court overtime, as a percentage of total MPD overtime, has decreased from
                           a high of 67 percent (approximately $7.3 million) in FY 1995 to 25 percent
                           through April of FY 1997 (approximately $3.7 million). In order to
                           implement crime fighting initiatives, MPD chose to place additional officers
                           on the streets using overtime pay. MPD reported that crime fighting
                           initiatives accounted for an average of 17 percent of MPD’s total overtime
                           expenditures from FY 1992 through April of FY 1997.

                           DPW reported that during FY 1996, the primary overtime driver was the
                           blizzard of 1996. The snow emergency accounted for major unplanned
                           overtime throughout DPW but particularly in its facilities maintenance
                           function, which is responsible for District government-owned buildings,
                           and in design engineering, which maintains streets and bridges.




                           Page 29              GAO/GGD-97-159BR District of Columbia Government Overtime Costs
Briefing Section IV

District Government Overtime Expenditures
Compared With Surrounding Jurisdictions



      GAO             Comparative Governments' Overtime
                      as a Percentage of Salary, FY 1996
                                                                Jurisdictions

                                                                                           Prince
                                District of             City of          Montgomery        George's            Fairfax
              Departments       Columbia                Baltimore        County            County              County

              Corrections                17.8%                 N/A                7.1%               0.2%              8.3%

              Police                      11.2                 5.4                  6.8                5.4               16.1

              Human Services                  5.2              N/A                  0.3                0.2                1.3
                                                    b                a
              Water and Sewer             23.8                 13.3                N/A                N/A                N/A

              Fire                        10.0                  6.6                 5.4                1.5                8.0

              Public Schools                  1.3               1.7                 0.3                0.1                0.3

              Public Works                    6.9             12.1 a              12.2                 6.8                1.7

              Governmentwide              6.0%                5.0%                5.3%               2.8%              2.0%
              percentage:




                                     N/A We did not report data on entity; see discussion on following page.

                                     a
                                      The District’s WASA treats sludge for Prince George’s, Montgomery, and Loudoun Counties, the city
                                     of Vienna, and parts of Fairfax County for user fees.

                                     b
                                      Baltimore’s water and sewer function is provided by the city’s DPW, its public works overtime data
                                     is exclusive of the water and sewer function.

                                     Source: District of Columbia Chief Financial Officer and budget offices of selected governments.




                                     Page 30                   GAO/GGD-97-159BR District of Columbia Government Overtime Costs
                           Briefing Section IV
                           District Government Overtime Expenditures
                           Compared With Surrounding Jurisdictions




Comparative Governments’   According to data provided by the District’s Chief Financial Officer and
Overtime as a Percentage   budget officials from the selected surrounding governments, the District’s
of Salary Costs, FY 1996   overtime expenditures as a percentage of salary costs (6 percent) was
                           higher than those of the selected surrounding jurisdictions in FY 1996.10
                           Overtime expenditures as a percentage of salary costs for the city of
                           Baltimore were 5 percent; for Montgomery County, 5.3 percent; for Prince
                           George’s County, 2.8 percent; and for Fairfax County, 2 percent. (See
                           appendix I for the salary costs of the departments shown in the chart.)

                           The District’s DOC (17.8 percent), DHS (5.2 percent), and FEMS (10 percent)
                           overtime expenditures as a percentage of salary costs exceeded those of
                           each of the selected governments.

                           We did not perform an analysis of each department’s organization and
                           staffing to determine factors that may account for the higher overtime use
                           of some departments. For example, the District’s DOC operates several
                           prison facilities for long-term internment of convicted inmates while the
                           other jurisdictions tend to operate jails to detain individuals prior to
                           criminal sentencing.

                           We were unable to present overtime information on all 5 governments’
                           corrections, human services, water and sewer, and hospital functions. For
                           example, the city of Baltimore does not have a DOC and does not directly
                           administer the city’s human services function, which is directed by
                           Maryland’s Department of Human Resources. The Washington Suburban
                           Sanitary Commission (WSSC) provides water and sewer services for
                           Montgomery and Prince George’s Counties. WSSC’s FY 1996 overtime as a
                           percentage of salary costs of 2.39 percent is not reflected in the
                           governmentwide percentages for Montgomery and Prince George’s
                           Counties. Fairfax County’s sewer functions are provided by DPW; its water
                           functions are provided by the Fairfax County Water Authority. Also, we
                           did not compare D.C. General Hospital to hospitals in the selected
                           jurisdictions because of its unique organization and staffing. D.C. General’s
                           FY 1996 overtime as a percentage of salary was 9.5 percent.




                           10
                             The District follows an Oct. 1 to Sept. 30 FY, the other governments follow a July 1 to June 30 FY.



                           Page 31                   GAO/GGD-97-159BR District of Columbia Government Overtime Costs
Briefing Section V

District Government Overtime Management
Policies Compared With Those of
Surrounding Jurisdictions


      GAO            Comparative Governments' Overtime
                     as a Percentage of Salary, FY 1996
                                                               Jurisdictions

                                                                                          Prince
                               District of             City of          Montgomery        George's           Fairfax
             Departments       Columbia                Baltimore        County            County             County

             Corrections                17.8%                 N/A                7.1%               0.2%              8.3%

             Police                      11.2                 5.4                  6.8                5.4              16.1

             Human Services                  5.2              N/A                  0.3                0.2                1.3
                                                   b                a
             Water and Sewer             23.8                 13.3                N/A                N/A               N/A

             Fire                        10.0                  6.6                 5.4                1.5                8.0

             Public Schools                  1.3               1.7                 0.3                0.1                0.3

             Public Works                    6.9             12.1 a               12.2                6.8                1.7

             Governmentwide              6.0%                5.0%                5.3%               2.8%              2.0%
             percentage:




                                    Note: Empty cells designate that the jurisdictions’ governmentwide policies did not address the item.
                                    However, in cases, selected departmental management policies did address them.

                                    Source: GAO review of governments’ overtime policies and information provided by the
                                    governments’ chief financial officers, budget, and personnel officials.


                                    Our review of the District’s overtime management policies indicate they
                                    are comparable with those of the selected governments in (1) having a
                                    written overtime policy and (2) reporting compliance with FLSA.




                                    Page 32                   GAO/GGD-97-159BR District of Columbia Government Overtime Costs
Briefing Section V
District Government Overtime Management
Policies Compared With Those of
Surrounding Jurisdictions




Only Prince George’s and Fairfax County’s policies provided for written
justification for overtime work. Their policies specified that authorized
officials document work to be performed on overtime. The other
governments’ policies did not require written justification. However,
several departments in those governments did require such justification.

Three governments’ policies addressed jurisdiction-level overtime audits.
The Office of Management and Budget of the city of Baltimore,
Montgomery County, and Fairfax County are to review governmentwide
overtime expenses on a quarterly basis. Also, Fairfax County’s Internal
Audit Office reported in 1996 on county-wide overtime practices.

Only Fairfax County’s policies provided for department-level audits of
overtime pay. However, in the other governments, some departments
followed practices to control overtime. For example, the District’s MPD
reported that the implementation of a time and attendance system in 1997,
which captures all police officers’ time in court, has helped to reduce
court overtime. MPD noted a lesson learned in managing overtime was that
overtime expenditures will escalate without proper management and
controls. The District’s DPW reported it reviews individual employee’s
overtime charges when they exceed 20 percent of the employee’s gross
annual pay.

The city of Baltimore, Montgomery County, and Fairfax County’s
governmentwide overtime policies provided for including overtime pay
estimates in the annual budget. For example, Baltimore budgets overtime
on the basis of historical expenditure trends, workload requirements, and
staff authorizations. The other jurisdictions’ governmentwide policies did
not address overtime budgeting. However, in our review, we found some
departments used similar practices to develop overtime budgets. For
example, the District’s FEMS stated its overtime budgets are based on
estimated staff needs and prior year salary and overtime expenditures.




Page 33             GAO/GGD-97-159BR District of Columbia Government Overtime Costs
Appendix I

Salary Costs of Selected Government
Departments, FY 1996


Dollars in thousands
                                                                                             Governments
                                                                                                                     Prince
                                                              District of       City of        Montgomery          George’s         Fairfax
Departments                                                   Columbia       Baltimore             County           County          County
                                                                                         a
Corrections                                                    $121,007                              $12,773        $17,247         $21,028
Police                                                          161,816        $125,556               59,716          63,186            66,349
                                                                                         a
Human Services                                                  214,758                               44,880          10,431            63,736
Water and Sewer                                                   40,127b         44,449a                     c               c              d

Fire and Emergency Medical Services                               62,198          65,022              42,872          30,245            59,495
Public Schools                                                  400,335         365,523              626,628        496,741         620,297
Public Works                                                      52,711          77,975a             16,903          11,497            16,921
                                      Note 1: The District follows an Oct. 1 to Sept. 30 FY, the other governments follow a July 1 to
                                      June 30 FY.

                                      Note 2: We did not compare D.C. General Hospital to hospitals in the selected jurisdictions
                                      because of its unique organization and staffing. D.C. General Hospital’s FY 1996 salary
                                      expenditures were $53.2 million.
                                      a
                                       The city of Baltimore does not have a DOC and does not directly administer the city’s human
                                      services function, which is directed by Maryland’s Department of Human Resources. Baltimore’s
                                      water and sewer function is provided by the city’s DPW, its public works salary data is exclusive
                                      of the water and sewer function.
                                      b
                                       The District’s WASA treats sludge for Prince George’s, Montgomery, and Loudoun Counties, the
                                      city of Vienna, and parts of Fairfax County for user fees.
                                      c
                                       Washington Suburban Sanitary Commission (WSSC) provides water and sewer services for
                                      Montgomery and Prince George’s Counties.
                                      d
                                       Fairfax County’s sewer functions are provided by DPW; its water functions are provided by the
                                      Fairfax County Water Authority.

                                      Source: District of Columbia Chief Financial Officer and budget offices of selected governments.




                                      Page 34                  GAO/GGD-97-159BR District of Columbia Government Overtime Costs
Appendix II

Major Contributors to This Briefing Report


                        John Needham, Assistant Director, (202) 512-5274
General Government      Anthony J. Wysocki, Evaluator-in-Charge, (202) 512-6016
Division, Washington,   Don Allison, Senior Evaluator
D.C.                    Patrick Mullen, Senior Evaluator
                        Marlene Zacharias, Issue Area Assistant
                        Katherine M. Wheeler, Publishing Advisor
                        Lessie M. Burke, Writer-Editor
                        Andrew Rosenberger, Intern




(410144)                Page 35          GAO/GGD-97-159BR District of Columbia Government Overtime Costs
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