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Clerical Error Causes City of Austin to Overpay EMS Employee by $200,000

Spencer Selvidge for KUT News
The Austin Monitor reports the overpayment happened because of a clerical error in 2004 – and was not corrected for eight years.";

This story comes to us from our city hall reporting partner, the Austin Monitor.

The City of Austin has overpaid a former Austin/Travis County paramedic by perhaps as much as $200,000 over an eight-year period that began in 2004. Though the problem was first discovered in 2011, it took until 2013 for the city to correct it.

According to a memo from Assistant City Attorney Lee Crawford, the city is legally entitled to “recover the amount of overpaid wages that (the employee) received for the last two years,” as of 2013. Crawford puts that figure at $68,014.55. However, under an agreement between the city and the overpaid employee, the employee was only required to return $6,240.00 of the total.

According to the agreement signed by both the city and the employee, the lower figure was agreed to “in light of the significant risks to both parties of resolving this dispute through a contested lawsuit, and in order to fully resolve this dispute and any other wage issues that could arise between the parties based on (the employee’s) past employment.”

The employee declined through a representative to comment on the situation. The Monitor is not naming the employee because of the sensitive nature of the issue.

Though the overpaid employee is no longer with the EMS department, he remains in the city’s employ. “This situation created a dilemma for the City of Austin and the employee at the center of the issue,” EMS officials told the Monitor via email through city spokesman Kyle Carvel. “After so many years, the employee became dependent on the level of his earnings. This is the case for most people. We needed to find a solution to make a correction to the earnings that would not cause the employee to experience financial ruin.”

According to EMS officials, the problem began when a clerk inserted an incorrect salary adjustment for the employee in the wake of a market salary survey conducted for EMS employees in 2004. “The adjustment in his hourly rate was entered for a 40-hour workweek and the employee had just moved to a 56-hour workweek,” Carvel said. “Subsequently, the incorrect hourly rate was recorded.”

A human resources manager in the EMS department discovered the problem in 2011, according to Carvel. That individual then reported the issue to the city’s corporate HR compensation workgroup. “Initially, their focus was on identifying the potential cause of the error in order to make a correction,” EMS officials told the Monitor. “While it was determined that the hourly rate did not appear to be correct, the cause was more difficult to determine because so much time had passed.”

Officials also noted that, “at the time, both HR groups were involved in converting the EMS department to a Civil Service organization, changing the EMS staffing configuration, preparing to negotiate a new labor agreement under civil service, and modifying policies and practices in pursuit of an ambulance accreditation for the EMS department.” They suggested that “because of the workload involved in these four major initiatives, the issue did not receive the attention it should have until the EMS human resources manager followed up to see if the correction had been made.”

The response continues: “Discovering that it had not, the EMS human resources manager informed the EMS Director of the status of the correction. At that point, the assistance of the corporate HR director was requested.”

Officials also suggest that the error raised broader questions that officials needed to answer. “Because the error occurred in association with a market study adjustment that was made in 2004, there were many questions that needed to be answered related to whether or not this was an error in the actual market study or another type of error, the number of employees potentially affected by the error, and the actual cause of the error,” they told the Monitor.

“Once all of these questions were resolved, the solution was to notify the employee, adjust his wages, and notify him that the extra earnings would need to be returned to the City of Austin. No other employees were affected by data entry errors.”

Looking back on the situation, EMS officials said, “It is clear that we should have tracked the progress of this issue to avoid the lapse in time. The EMS department has since made structural, procedural, and managerial changes to ensure oversight of critical tasks such as payroll and pay-related changes. We now have new HR management, a new Assistant Director of Finance and Administration, and new financial managers.”

Moreover, they noted, “The wages of 100 percent of EMS employees have been reviewed. A new pay scale that complies with our new labor agreement requirements has been implemented that is much easier to manage. The corporate HR team has changed the procedures for making market adjustments to prevent other changes that could cause errors, such as schedule changes, from occurring simultaneously.”

City Auditor Ken Mory’s office conducted an investigation into the matter. However, no report was issued, according to Carvel. It was not immediately clear why that was the case.

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