2009- 2010. we look at only one year. we looked at retirement lump-sum distributions, at premium pay designations for positions and configurations of payroll systems, and our work commenced on august 10, 2010, and the report was issued on march 15, 2011, and all of our audits follow our generally accepted standards. our audit scope included looking back the department in population of 1493 employees. of the population, 1425 employees are represented by the san francisco fire fighters union, local 798. therefore, the audit focused on payroll practices of employees

represented by local 798, which there are 5% of the employee department who are mia employees. unit two includes pilot and fireboat. as you can see by the slide for fiscal years 2009-2010, the department to expenditures were over $2,709, including base salaries, overtime costs, premium pays, and onetime payments. based salaries include the total base rate, also if an employee performs a long-term acting assignment, it would include that as well. overtime expenditures include any time work beyond the regular

standard work week, and premium pay extenders include the amount paid to eligible employees as prescribed in the employee's mou. as well, there are a onetime payments, which are generally retirement lump-sum payments. for this audit, we again only looked at one fiscal year, and we used a statistical method. we sought to have a confidence level in 95%, and in our process of selecting items for review, we used the risk-based approach. the department administered 63 payouts, of which 13 were

reviewed for retirement. the audit tested the pay records of all 250 employees who receive the fixed hazardous materials came rate for this fiscal year, which equates to 6823 pay records, and the audit defines a pay record as one occurrence of the pay for each individual employee. for the 250 employees, additionally, the audit test of eligibility for fixed hazardous pay, and we tested eligibility for all 130 of the 250 employees. we also looked -- during that time, there were 159 employees who receive location-based hazardous materials premium pay, of which the audit only looked at 20 of those employees for that particular premium pay. for short-term assignments, the

i tested the -- the audit tested the atrophy of hourly pay for employees, or we look at all 3888 k records. for long-term acting assignments, we examine a rates for 30 of the 87 employees or 619 pay records. for education and training achievement pay, we performed an analysis for 24 of the 1190 employees who received this pay period as you can see by the slides, there are four key departments that are part of the payroll cycle from date to hire to retirement. the department is responsible -- the fire department is responsible for finding employees and injuring the employee time allocation in to our city wide payroll.

part of human resources is responsible for negotiating collective bargaining and coordinating with city departments, and payroll and personnel services division is responsible for processing time submitted by city departments and issuing employee checks and maintaining our payroll system, and the retirement services is responsible for confirming employees retirement eligibility and monitoring retirement policy. for the critical department terms, we wanted to quickly talk about some of the critical department terms. one of those terms is depression or field employees who work a work week average of 48.7 hours per week or an average of two 24-hour shifts per week.

then, there are designations for positions. our temporary appointments made to fill in an open position, and there are two types of definitions -- short-term and long-term. we have short-term acting assignments. our appointments made on a daily basis to fill open suppression, which are filled positions, and we have long-term at this time appointments were longer than 10 consecutive working days for non-agression employees -- those employees working 40 hours per week, and they are primarily at headquarters. then, there are 30 calendar days for suppression employees to fill an authorized budget position. supervisor campos: if i may, just to get more clarity, for folks who are watching, who

would be a suppression employee, and how was that decision made? >> [inaudible] supervisor campos: ok, so we are here. deputy chief fields is here to speak on behalf of the fire apartment. thank you very much. did she tried to be here, but she had a prior commitment with the mayor, but this is very important for her. so thank you for being here. >> thank you. good morning, supervisors. the suppression designation would include firefighters in the field, non-oppression, but would be persons such as myself, deputy chief, and arson or fire inspector, and the chief makes a

determination as to who goes where, pretty much. supervisor campos: suppression refers to fire suppression? >> yes, those forces that are detailed or permanently assigned to fire apparatus. supervisor campos: ok, great. that clarifies it. thank you very much. >> we are going to have an overview of retirement findings, and we have included the most critical findings from our report. what the audit found was the department suggested equal than for non-suggested employees. they were 40 hours per week, which resulted in increased expenditures for final retirement payout. the department unofficially said it proportionally higher

vacationed of cool limits for suppression employees working 48.7 hours a week, which again resulted in increased expenditures. our following three slides will give you more details about this particular item. the fire department uses chief actors to adjust the hours of non-suppression members who work 40 hours per week to match those in suppression positions, again, who worked 48.7 hours per week. those factors are able to apply remaining vacation balances by 1.5 -- they multiplied remaining vacation balances by 1.5 and invested sick leave balances by 1.2208.

it shows actual payments received by employees for those four employees that we looked at, and again, there were 63 employees that retired in this particular fiscal year, and we look at 13, and we are outlining four of those. the payout that employees would have received if there were no adjustment as the fire department applied the 115 and 1.22. the last column shows the difference for each employee in our sample. factors used for non-oppression members are not supported by any official guidance or documented policies or procedures such as city mandates or mou's. the audit concluded that employees benefited on an average of $6,541 in an overpayment at the end of

retirement, as evidenced in the table. there were 23 non-suppression employees, so what we did -- would project it out to the total population or we applied the $6,541 to the 23 retirees, which resulted in $150,000-plus overpayment in that year. supervisor campos: in other words, colorado a -- column a shows what the department paid, and the other shows what the weather did it without the adjustment. from your assessment, the adjustment is not at least justified by an mou or any other contractual obligation that the fire department has. >> correct. this has been a longstanding practice. supervisor campos: essentially, you're talking about the

department paying more than it needed to. >> correct. what our recommendation was to the department was that they should discontinue using this adjustment process and pay non- suppression employees at the white -- rate of the retiree's final ride without special adjustment and the department should collaborate with retirement services department of human resources, and respective unions to potentially negotiate such. based on the department's response, they were in agreement. in our next five, we talk about vacation accrual limits, and the audit found that employees on the suppression schedules receive a higher proportion of it on their vacation accrual since it is a evaluated based on hours. this results in a benefit to suppression employees. the exhibit here compares the

current maximum vacation hours approval in row a by non- oppression and suppression of ways i proposed to total hours. as shown, none suppress an employee's work a 40-hour work week, and that is worth a total of 2080 hours per year. employees can accrue up to 400 hours per year for vacation, which is 19.23% accrued vacation ratio, and suppression employees were again 40.7 hour work weeks for a total of 25 -- 2,532.4 hours. employees can accrue up to 600 hours for the suppression employees per year for vacation, which is a 23.69% accrued vacation ratio. so the suppression accrual ratio is about 4.46% higher than the

non-suppression of cruel ratio. again, it is not an official documented acceptable practice. as it relates to an mou or city mandate. we will continue with vacation accrual limits. the disproportional accrual limits positively benefits against oppression retirees. out of the sample of nine suppression retirees examined, 6 had accrued vacation balances that exceeded 487 hours, and the above exhibit shows six examples of suppression retiree cruise vacation pale benefited from the higher of parliament of vacation

accrual. colorado -- column a show's actual cruel, and b shows the recalculated amount -- colorado -- cooumn -- column a show's actual accrual. for the suppression employees retired in the allotted time using the proportion from the sample, is projected that at least 26 of these may have had vacation balances that exceeded 487 hours upon retirement. the maximum allowed vacation accrual had been 487 hours for suppression, the department would have saved an estimated amount of $146,000-plus, which

is an average of $5,628 per employee, as stated earlier. what we recommended was that the department should determine whether vacation accruals for suppression employees should be limited based on proportional days or proportional hours to non-suppression employees. the department should also develop supporting documentation for the limit. then, we will talk about our major premium pay findings. the hazardous materials specialist premium pay is a flat rate of $26.50 per day. to those who qualify. the audit noted that the pay rate was set at an hourly rate in our system to pay employees

at $26.50 if they work a regular 48.7-hour work week, but if an employee works more or less than a regular work week, the employee was over or underpaid. during fiscal year 2009-2010, the biweekly paid varied between 0.38 since and $33.30. you can see there is a huge difference, just depending on what hours were worked per employee. the impact of the pay rate being set as an hourly rate rather than a flat rate resulted in net underpayment of $1,400. so it was not huge in terms of the total overall dollar rate. what we recommended was that the comptroller's office configure the pay as a flat rate instead of an hourly rate in our pay system, and we also recommended that the department review the case made previously for a pay

period for and submit an adjustment request to recover the agreed amount. again, we sampled 30 employees for hazardous materials premium pay, and of the sample, two employees received the hazardous materials behave but did not have the proper certification to be eligible to receive the pay. just wanted to it and ensure that the employees properly receive what was due to them or were not paying hazardous pay for those who were not eligible. we noted that those who receive

training in education they possessed at least one of the eligibility requirements and therefore it was deemed to be accurate, and a test of the training and education premium pay was calculated at the correct rate and for the sample tested, we noted that it was accurately applied. we will talk about designations for position findings. the audit found that there was a lack of documentation retained for csa to identify whether daily acting assignments were made by seniority, as indicated in the mou. the audit confirmed automated reports are generated to identify available employees based on seniority and open positions, but once the position is filled, it is no longer listed in the report, and it is considered filled in the system

here in the open position report is not retained and cannot be retroactively ", so it made as difficult to determine what is actually done, although they do have documentation. what we recommended was that the record and track the daily open positions and the related assignments made to fill those positions. there were instances where the wage rates were higher or lower than the accepted rate for employees acted positions. this resulted in overpayments and potential underpayment to the employee. some of the underpayment can be attributed to the expected two- day period during the processing time, so there was a lifetime, where it had been accounted for by using a short term page will. what we recommended was that the department should monitor the total pay of acting assignment employees for accuracy and work with the controller's office to

ensure timely processing of acting assignments. and update and additionally, we recommended that the department work with the comptroller to create specific rules to be used for long-term acting assignments. just to make sure that the pay codes are accurate and being used properly. as it relates to our payroll system, the audit found that manual errors generally occurred during the department's kind into processed and the audit procedures revealed that as a result of manual entry errors and to the time sequencing system, and accurate they could reused to compensate employees. this resulted in average over payments of $63 per error had an error rate of 0.26%. we found that there were 10 errors out of 3888.

the rate of error was low in that regard. the average over payment and error rate was used to project across all 273,000 k records, so for this particular fiscal year, that potentially would estimated to an overpayment of $44,000, so what we recommend it was back eliminate manual inputs into the city payroll system by partnering with the comptroller to systematically load the department's times system into the city wide payroll system and automated interface will also reduce the risk of manual errors. supervisor campos: how many departments do manual in putting? do we not know? most? >> [inaudible] supervisor campos: if you could

please come forward. just a sense of how many departments do manual in putting. >> all of the department's except for at this point, in the system, fire will be one of the apartments that does interface. supervisor campos: i would imagine that if this is happening with the fired apartment to the extent that the manually in putting that information is a very real possibility happening with other departments. >> i would expect so and we're determining which are extraneous at this point and which ones we need to have to avoid that kind of error. supervisor campos: thank you very much. >> what we also found was that approximately 65% of the total fire department's special pay

codes and tests are basically not used to pay employees. what we have recommended to the fire department was to request the controller to temporarily remove those pay cuts, but again, we also recognize this is going to eliminate some of the concerns and issues that we are having. additionally, they premiums that a majority of employees received can be administered more efficiently. 82% of employees received a holiday premium pay. as the premium is manually entered into the kind system, there's a risk for overpayment or underpayment. we are asking that the department identified these types of premium pay that the

majority of their employees receive and that those cuts actually be automated into the system. supervisor campos: thank you. just a final overall question, do you have a sense of what other cities do with payroll? is there a manual in putting that happens that is typical in other cities? >> this is the implementation of human capital management, functionality that goes across human resources, payroll time, and labor and absence management and benefits. what we have found is that most large municipalities do have some sort of automated time system.

many still do direct time entry into the system as opposed to having employees automatically into the data or enter it into a local system and an interface it. anytime you have manual entry into any system, whether it is online or through some sort of a paper-based system, you are going to have some errors, but you can reduce that by increasing the number of edits and reducing the possible selection for codes to be used to into that time. supervisor campos: is there a process where you have at least a second set of eyes looking at least what has been put into the system? >> we do in two places. we have a system looking to determine if the rules are being met, and the second is the department itself. supervisor campos: thank you. do you want and add anything else?

great. why don't we now hear from the fire department, from deputy chief fields. as i was noting, fields this campos in english. >> i have been sharing that with my co-workers, supervisor. good morning. just in response to the audit report, the fire department worked diligently and cooperatively with the audit team for over three months. we recognize the enormous task that they were given. as you can see in the audit

report titled recommendations and responses, the fire department concurs with most of the audit and recommendations. as a result of the recommendations, we have begun to implement some of the issues that were outlined. in addition to that, there are also recommendations that only conversation to the city -- particularly dhr labor relations and local 798 -- can result. we are ready and willing to engage in those conversations. once they have come to some sort of resolution regarding these issues, we are in a position to implement them immediately. today, i have with me the fire department cfo and our human resources director to answer any questions that you may have. supervisor campos: thank you. i do not know if we have questions, but i wanted to ask a

couple of points. first of all, with respect to the suppression, non- suppression payment and there was a finding that, for instance, for -- let's see, for payout -- you know, there was an overpayment of possibly $150,000 if you compare what you are paying versus what is required by the mou and the same thing with vacation accrual. you have an overpayment of $146,000. how was that decision made in terms of paying above what the mou