Posted November 13, 2013
In a 45-page bombshell report, the city’s own internal auditor, Loretta Alonzo, confirmed that the City of Guelph has failed to control overtime payments both in cash and time off in lieu of overtime. The absence of controls runs across all departments of the city.
The most insidious abuse was taking time off using banked in lieu time and then paying a replacement employee time and a half to cover. The abuse has spread over employees in both organized labour and non-union positions in most departments.
One example of the inmates running the asylum is in Guelph Transit where staff is organized by the Amalgamated Transit Union. The overtime cost in that department is about $1 million. The auditor states that attendance management is the single largest issue that drives overtime, with the daily average absenteeism being as high as 25 per cent.
In the auditor’s opinion, “this service area is facing critical overtime and attendance issues that are unacceptable.”
The most abusive issue is a driver calling in, requesting “sick with no pay” and in the same week earning overtime. Some drivers bank up “sick with no pay” up to 40 to 50 days a year. And they can roll those over to the next year. Does anyone work full-time there?
The audit examined all departments and operations and discovered there were multiple management standards and reporting. Some managers said they did not have time to track overtime costs. Many operations were legacy systems that managers adhered to, without regard to outcomes of staff costs. In some areas there was no budget for overtime, yet it still occurred.
The auditor covered the first eight months of 2013 and projected estimated total year overtime costs:
Taken in cash – $4,219,567
Banked overtime taken in lieu of time off – $850,000
Total for 2013 – $5,069,667
That’s 6.1 per cent of the total base salary and wages. The auditor says the cost of overtime should not exceed 2.5 per cent of total salaries and wages.
The report shows that there is an upward trend in the cost of overtime on the past five years. In 2009 the percentage cost of overtime was 3.52 per cent of the base salaries and wages that year of $77.418,245.
In 2013, Guelph’s cost of overtime is projected to be 5.1 per cent of the base salaries and wages of $82,750,450.
The shocker is the increase of overtime costs. In 2009 staff overtime cost $2,726,264. In 2013 it is projected to be $4,219,667. That’s an increase of $1,493,403 or 54.7 per cent in just five years.
Also it does not include the standby costs.
Comparing Guelph’s staff overtime costs with other municipalities, there is more evidence that administration management has failed to control overtime costs that other cities have managed to contain.
For example, Kitchener’s percentage of overtime cost of its base salaries and wages in 2012 was 1.2 per cent.
Similarly Cambridge’s percentage of the base was 3.2 per cent.
Waterloo was 3 per cent.
These are comparable cities, close by, that manage their employees overtime. The audit says that Guelph ranks among the highest municipalities in overtime costs. Also the report details where and how these costs have occurred.
In the audit’s corporate overview there were a couple of interesting and provocative observations.
The question of legacy operations that have perpetuated over the years has created a “culture” that sees overtime as obligatory. One key practice lies in the lack of active attendance management that in some service areas, a culture of entitlement is apparent.
The audit points out that the “tone at the top” contributes to the culture and how overtime is perceived. It appears that overtime receives tacit approval at the top management levels and that’s how it flourishes. The resources, tools and knowledge have been inadequate in many service areas. Further, senior management has not provided adequate guidance to make these issues of cost control a priority.
In short friends, this report is a thorough and independent audit of the way the city manages its staff.
It’s not a pretty picture and perhaps it’s only the tip of the iceberg. The GrassRoots Guelph petition delivered to the Ministry of Municipal Affairs and Housing to audit the finances of the city may only be a harbinger exposing the financial mismanagement of our city. And it’s by an administration that has been called to account by one of its own.
With all the secrecy and obfuscation by this administration, taxpayers are finally getting a clue of how mismanaged their city has become in seven years.
It doesn’t get any better than this.
Note: Viewers wanting to read the full text of the auditor’s report, email me at email@example.com and I will forward a copy.