Article by Erik Smith. Published on Wednesday, September 29, 2010 EST.
Whopping Mistake in Overtime Report Leads Union to Remarkable Finding – Agency Paid Out 9,742 Hours in Overtime, Not 48
Greg Devereux, Executive Director of the Washington Federation of State Employees
By Erik Smith
Staff writer/ Washington State Wire
OLYMPIA, Sept. 29.—The Department of Social and Health Services is making whopping overtime payments to workers to compensate for staffing cuts imposed by the Legislature – raising doubt about whether any money is actually being saved at all.
DSHS paid out nearly 10,000 hours in overtime during the month of July, apparently because budget cuts from the Legislature forced the agency to freeze hiring and cut its staff. The agency’s response was to work its remaining employees longer, and pay them overtime.
Overtime at state agencies has become a big concern because the state also is trying to save money by ordering employees to take unpaid furlough days. The revelation demonstrates what an unworkable plan the furloughs really are, said Greg Devereux, executive director of the Washington Federation of State Employees.
The problem came to light because of a big mistake in a report issued last month by the state Office of Financial Management.
The report said DSHS paid out 48 hours of overtime during the month of July – a figure that didn’t pass the straight-face test, union officials say. They questioned the numbers and got a response this week that caused more than a few jaws to drop. The number was off by about 20,000 percent.
OFM Confirms Mistake
Devereux told the House Ways and Means Committee about it Tuesday.
“Regarding overtime, when my union and the Olympian newspaper requested overtime data for the month of July, we were told DSHS had 48 hours of overtime,” he said. “We questioned that number and yesterday we were informed that the actual overtime figure was 9,742 hours. So we believe that furloughs have had some impact on that number.”
A letter from the state budget office confirms the mistake. It maintains there was no connection between the furlough on July 6 and the overtime. But that raises another question: Why on earth did the agency pay out 10,000 hours of overtime in the first place?
Rumors Sweep Capitol
Behind the question is a rumor that swept the Capitol this summer – that state employees were being told not to worry about those furlough days. If they lost money through the furloughs, they could make it up in overtime.
That runs counter to the spirit of the furlough bill. Lawmakers wanted to cut payroll costs, without ordering an out-and-out pay cut. The furloughs affect 23,000 workers who are not deemed essential to public health and safety. For those who got the full 10-day whack, it’s a 3.9 percent pay cut. The state expects to save $73 million with the measure, about $38 million of that money from the state general fund.
The federation has been battling the idea on multiple fronts – in court, before the Public Employment Relations Commission, and in the arena of public opinion. The furloughs cause huge management problems for state agencies, Devereux said.
“The only honest way to do furloughs is to actually reduce the work that is required,” he said. “That has not been done. As layoffs grow, work expectations remain high, and many portions of state government have untenable workloads.”
If agencies can’t cut services, he argues, they’re forced to turn to overtime, which is even more expensive than paying employees to do the job on regular time in the first place.
10,000 Hours of Overtime in July
That explains what happened at DSHS during the month of July, according to the OFM letter that disclosed the overtime accounting error.
But Diane Leigh, director of OFM’s Labor Relations Office, said the huge overtime cost wasn’t the result of the employee furloughs. Instead, the problem was caused by the two years of budget trouble that have forced layoffs and caused positions to go unfilled.
The argument raises an interesting point. The agency has been paying overtime for work that could have been done for less money if it had a full crew. It didn’t cut services. That would have required a decision from the Legislature.
Most of the overtime at DSHS during the month of July came in a single area – the Economic Services Administration, which pays out welfare benefits. Overtime more than doubled in that area, from $119,722 in July 2009 to $249,511 in July 2010.
“Decreased resources were compounded by an unprecedented workload,” Leigh wrote.
The real problem in that section of the agency is that it has lost the equivalent of 229 full-time workers in the last year, she wrote. That’s about 9 percent of its workforce. But the demands haven’t gone down. Agency managers are under pressure to get benefits processed quickly. The feds impose financial penalties if the agency’s processing time slips below the national average.
In fact, the demands have gone up. The same economic hard times that prompted the Legislature to cut the DSHS budget also sent increasing numbers of people into state welfare offices looking for benefits. Enrollment in the state Basic Food Program went up 66 percent over the last two years.
About That Mistake
Agency officials say that problem with the numbers can be easily explained. The 48 hours of overtime that was reported earlier represents additional hours worked by furloughed employees during the week of July 6. That was when the first furlough took place.
The 9,742-hour figure represents total hours of overtime for DSHS during the month of July.
“It’s sort of like mixing apples and kumquats, or apples and casava melons,” said Thomas Shapley, communications director for DSHS.
So how come DSHS total overtime was reported as 48 hours? There was no mistake on the part of DSHS, Shapley said. The letter from Leigh addresses the matter delicately. After the federation questioned the numbers, “the agency looked again at their total and forwarded a revision,” she wrote.
But the central point remains unaffected. “Current overtime use is not directly related to the temporary layoffs,” she said.
Matter of Concern
It’s all connected, union officials say. Whatever the effect of the overall budget cuts, DSHS wouldn’t have had such a big overtime cost if workers had been at their desks on July 6. And the big overtime costs at DSHS, whatever the cause, raise the point that the workload remains the same even as the number of warm bodies in the department decreases.
At Tuesday’s Ways and Means Committee hearing, union officials said reducing the number of staffers or the number of hours worked don’t necessarily mean savings. And they told of the bizarre lengths state agencies are going to in order to implement the furloughs.
For instance, in the Department of Corrections, prison mail room employees are not considered essential, while prison guards are. But the mail can’t be stopped, for legal reasons. So on furlough days, guards sort the mail, said Anna Jancewicz of Teamsters Local 117.
“We’d love to see the end numbers of how much the state is actually saving,” Devereux said. “We think the overall hassle factor is worth more than $30 million.”
Kelli Linville, chairwoman of the House Ways and Means Committee, said it’s something lawmakers will have to look into. “One of the reasons we had this presentation today was to ask the question, was there a significant savings?”The Legislature needs a detailed accounting of how much the furlough plan really saved, she said. “We have a long-term problem, and short-term fixes are not going to work,” she said.