BOOM! Internal auditor unloads a $5 million bomb in city overtime costs

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 gerrybarker76@gmail.come and I will forward a copy.

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11 Comments

Filed under Between the Lines

11 responses to “BOOM! Internal auditor unloads a $5 million bomb in city overtime costs

  1. Heather

    Seems to me there is no end to the pot of gold Farbridge has at the end of her rainbow.And we supply her with the gold to fill her pot. I am so angry that she has the gall to even suggest a 3.36% residential tax increase for 2014. Time to march her right out the door and by the sounds of it, a lot of the people employed there. I personally have had enough of this stealing from us and cheating us all.

    • Lightning John Como

      If you think Farbridge is the problem, methinks you’re barking up the wrong tree. It’s the whole system that stinks and needs revamping. For example, if the Mayor and most of the Councillors are swept out of office next year, should we expect major changes? I think not. The rich will continue to get richer, and poor bastards even poorer.

  2. Heather

    Well Lightning John It sure as heck is worth a try.At this point we have NOTHING to lose! And you never know, we might actually get someone in there with a brain and integrity! And responsibility comes from the top! Yes she is responsible.We put her in to oversee this city and she does nothing but spend our hard earned money on pet projects and in a recession.Look at other cities close by. See what their residential tax hikes have been since 2008.They only performed Necessary jobs to keep their cities going and they sure as heck don’t have as many employees, or the high wages ours do.And like Gerry said, Guelph couldn’t even find $500,000 in the budget, but spent $5M on overtime. Seriously you don’t see anything wrong.

    • Lightning John Como

      Heather,

      Of course, I see a great deal that is wrong. Not only in Guelph, but the province and nation as well. That being said, I am not so naïve as to believe that there will be any major changes in our capitalistic system. Nor do I think replacing one politician with another simply doesn’t work out anywhere close to expectations.
      What might help next year is a person like Gerry B. declaring his candidacy, as well as others of his mindset. Personally, I would be happy to help in their election campaigns.

    • Lightning John Como: We’re working on raising interest and persuading qualified candidates to run next year. The new council faces a daunting task in bringing responsible, common sense action to a a dysfunctional administration that is in disarray. This is a wonderful city that has been abused by a coalition of people seeking to fulfill their personal agendas regardless of what the majority thinks. Case in point was spending $53 million of an organics processing plant and cart-based collection system that doesn’t service 6,400 households in the city. If they can’t manage staff overtime, how do you expect them to manage a multi=million dollar waste management system?

  3. Joe Black

    Start with privatizing the transit and garbage collection

  4. James

    It was a Union things snuck in under previous Transit Managers who did not do their job proper. Things will change, the presentation I saw interim GM Phil Meagher give Council and his no holes bar track record in Durham and Niagara prove he will fix the system once and for all.

  5. Mary Heyens

    Privatize the transit and garbage collection, and expect a tax refund.

  6. DAVID BIRTWISTLE

    There is no doubt that Ms.Heyens’ privitization suggestion needs to be addressed as it might pay dividends akin to the City of Toronto’s action in this regard. david.birtwistle@sympatico.ca

  7. Mary Heyens

    Thank you Mr. Birtwistle. Have a Merry Christmas and peaceful Holiday Guelph Speaks and Guelph residents.

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