Audit finds DOE fails to track leave
Accounting problems were also found at individual schools
The state Department of Education is not keeping track of vacation and sick leave for many of its employees, according to an audit released yesterday.
In fiscal year 2005-06, the department overstated sick and vacation leave balances by about $19 million and $428 million, respectively, the audit found. Also, the report cited $4 million in negative reserve balances on workers' compensation accounts.
The DOE agreed with the audit's findings. It plans to have all accounts, which are done manually at each school, in a computer system by 2009.
The state Department of Education says it will improve how it keeps track of vacation and sick-leave accounts of employees by switching from paper forms to a computer by 2009.
An audit released yesterday found the department overstated vacation and sick-leave balances by about $19 million and $428 million, respectively, as of June 2006. Schools Superintendent Pat Hamamoto blamed the problems on a 27-year-old system in which individual schools collect the information on paper forms.
The system has been calculating account balances for more than 9,000 former employees because their names are still listed as "active," according to the audit, which was presented to a Board of Education Committee on Audit.
The DOE has been fined about $1,500 in the past three years for delays in updating accounts of retired employees. It estimates that the department has about $500,000 in overpaid sick and vacation leave at any given time.
The DOE has 15 vacancies in its accounting section and cannot hire workers to clear the backlog, Hamamoto said, so staff is just focused on keeping the accounts of current employees up to date. She said the DOE also has a large number of workers with different leave rules.
The 82-page audit by consultant Nishihama & Kishida CPAs Inc. looked at finances of schools and libraries. Charter schools were not included because they handle their money separately.
Other findings in the audit:
» The DOE has $4 million in negative reserve balances on workers' compensation accounts. Officials said the department also is understaffed, with eight case managers trying to resolve 1,600 claims.
» Supervisors of teachers working in federal programs have not followed regulations requiring them to sign a form that ensures teachers actually worked on the assignment. As a result, the audit listed about $2.37 million as "questioned" payroll costs after looking at just nine federal programs, but auditors noted this appeared to be a departmentwide problem.
» Out of 10 schools checked, two lacked controls to make sure funds were not misused, and one did not match personal records with bank statements.
Board member Garrett Toguchi said the department should rethink how it manages money at the school level, perhaps by cutting red tape to give workers more time. He also suggested penalizing schools mismanaging funds.
"Maybe the system itself is overly bureaucratic to be safe," he said, adding, "If it is not important for a school to be accounted for the funds, maybe they should not have the funds."
