the coach, and that prompted the president olague to call for a joint meeting. this brings the merchants, the residence, fire, police, everyone together under one roof, and supervisor chu was the host, and everyone got together and asked him a number of questions about what was the most concern in the neighborhood, is about was the most interesting. on may 4, i attended a meeting on polk street between the owners of a building there regarding ada compliance. two of the tenants were being sued, and it was very refreshing to see them getting

together with the owners to see what they could do, and i but that was a very exciting way to deal with a big problem, so that is my report. president o'brien: next item, please. clerk: item number 20, general public comment. president o'brien: next item. clerk: item number 21, new business. president o'brien: any new business? seeing none, next item. clerk: item number 22, adjournment. president o'brien: the meeting

is supervisor campos: good morning. this meeting will come to order. welcome to the regular meeting of thursday, may 12, to the board of supervisors government audit and oversight committee. i and the chair of the committee. we will be joined shortly by vice chair farrell. we have been joined by committee member president david chiu.

we want to thank john and jennifer for their service. do you have any announcements? >> yes, please turn off all cell phones. if you wish to speak during public comment, please fill out a speaker card and place it to the right of the podium. completed speaker cards and copies of documents presented will be included as part of the file and submitted to the court. items at the budget will appear on the may 24 board of supervisors agenda unless otherwise stated. supervisor campos: can you call item one please? >> resolution approving an agreement with the nonprofit owners association of fort ministrations/management of the ocean avenue community benefits district. supervisor campos: good morning. >> good morning. thank you. today before you is a resolution for your consideration to approve a management agreement with the newly formed non-profit

owners association, which will manage the new ocean avenue community benefits district that was approved by the board of supervisors in december. this is the management agreement template that we use for all of the cbd's in san francisco, obviously tailored to this particular non-profit. if approved, the city can transfer the assessments that have been collected to the management corp., which will then be used for services in the district, per their management plan. if you have any questions, feel free to ask me. supervisor campos: thank you. this is an item that has been introduced by supervisor avalos. i do not know that we have any questions. i think this is pretty self- explanatory.

why don't we open it up to public comment? is there any member of the public who would like to speak on this item? [reading names] if there's anyone else and has not signed up you would like to speak, please come up. we're going to limit public comment to two minutes because we expect a large turnout for a couple of the items. please go ahead. >> good morning. i am with the ocean avenue revitalization collaborative, and also acting as interim staff person for the ocean avenue cbd. we would like you to move this to the board of supervisors for approval. we are ready. we have set up committees. we have had various meetings with the board already, and it would be great if you could move this forward. thank you. supervisor campos: thank you very much. next speaker please. >> good morning, supervisors.

today, i am representing the ocean avenue association. the new in formation nonprofit association that would manage the cbd in the ocean avenue neighborhood. needless to say, we support this contract be approved. thank you. supervisor campos: thank you. is there any other member of the public who would like to speak? seeing none, public comment is closed. supervisor chiu: i am happy to support this and would like to move this forward with recommendation. supervisor campos: we have a motion to move this forward. we can take that without objection. can you call item two? >> item two, hearing on city

services auditor's report concerning the payroll of the fire department from july 1, 2009, through june 30, 2010. supervisor campos: thank you. this is an item i introduced, and this is something we introduced in the course of conducting the business of this committee. we want to make sure we have a hearing on the key audits conducted by the controller's office and other agencies. good morning. >> good morning. i am from the controller's office, and we are going to talk about the fire department payroll audit.

in our audit program, we have instituted a program to look at our city payroll process, and what we are looking to determine is -- are we actually doing what we say we are doing in terms of -- according to the mou, our different bargaining units, which outlined our pay practices. we look at fiscal year 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