Report 2012-603 Recommendation 4 Responses

Report 2012-603: High Risk Update: State Agencies Credited Their Employees With Millions of Dollars Worth of Unearned Leave (Release Date: August 2014)

Recommendation #4 To: Controller's Office, State

To improve the accuracy of information in the leave accounting system and to ensure that agencies do not improperly credit employees with leave in the future, the state controller should implement additional controls by June 2015 to prevent the leave accounting system from processing the types of inappropriate transactions we identified in our statewide electronic analysis. For example, it could develop cost-effective controls in the leave accounting system that would prevent employees from receiving annual leave and sick leave during the same pay period.

Annual Follow-Up Agency Response From August 2019

We are pleased to report the remediation of a significant system flaw that allowed employees to accrue annual leave and sick leave concurrently. This required several years of complex analysis to identify causes of the erroneous leave accruals and to program the fix. We have tested this system change and are confident that it will substantially reduce the potential for future errors.

Since the audit, the CLAS team continues to monitor reports monthly to ensure that employees are not receiving dual accruals. We have continued to monitor other areas of concern identified in the audit, to ensure that our controls are still effective. As stewards over CLAS, we are continuing to monitor and identify any remaining system weaknesses and develop controls to prevent future errors. We consider this recommendation fully implemented.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Annual Follow-Up Agency Response From August 2018

Our endeavor to prevent employees from accruing both Annual Leave and Vacation or Sick Leave continued this year without resolution. The CLAS team's year-long quest to fully analyze relevant system functions uncovered multiple weaknesses that contribute to this problem. We submitted a work order, and the programmer is analyzing the various processes surrounding this issue. The fix will take months of analysis and reprogramming, yet we believe the related system flaws can be patched before June 2019. We anticipate that next year we will report a successful conclusion to this lengthy endeavor.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From August 2017

Since our previous report, the SCO's CLAS Unit has made several changes to prevent errors in keying Holiday Credit hours. We recently eliminated the generic transaction, and replaced it with separate transaction codes for specific ways to earn Holiday Credit (e.g., working on a holiday, holiday on Saturday, holiday on regular day off). Departments will begin keying these new codes for September 2017 leave.

We have not yet completed the complex changes necessary to ensure employees cannot accrue both Annual Leave and Sick Leave simultaneously. This endeavor has proven more difficult than expected. However, we are confident that this will be completed by Summer 2018. The CLAS Unit produces a monthly report of employees accruing both Annual and Sick Leave, and ensures such errors are corrected promptly.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From October 2016

Since our last report, the SCO's CLAS Unit has (1) updated system controls to prevent Personal Holiday accruals for ineligible employees; (2) implemented a system audit and corresponding warning message to alert users when they are attempting to post any Earn transaction over 100 hours, over 80 hours for the CTO benefit, over 8 hours for the Excess Hours benefit, or over 30 hours for the Holiday Credit benefit; and (3) disabled the Earn transaction for benefits that no longer earn hours, such as the various Personal Leave Program and Furlough Hours benefits.

As stated in our previous report, we are continuing the complex effort of updating the CLAS system audits to prevent employees from accruing both Annual Leave and Sick Leave simultaneously. In addition, our effort to eliminate the transaction that is currently used to post duplicate Holiday Credit "earn" transactions will be completed by Summer 2017.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

1-Year Agency Response

Our original proposal to modify our system to prevent employees from accruing both Annual Leave and Sick Leave simultaneously was found to be not feasible. Therefore, we have begun the process of developing new business requirements for updating the leave accounting system's audits to prevent dual accruals from posting for these benefits. This complex effort should be completed by Summer 2017. In the meantime, all employees who were accruing both Annual Leave and Sick Leave have been identified and the Sick Leave accruals have been turned off. Also, an exception report has been created, and will be made available to the departments by Fall 2015. The SCO is now monitoring for any dual accruals on a monthly basis, and making necessary corrections. In addition, we are making other system modifications for the Personal Holiday and Holiday Credit benefits, to prevent accruals from posting for ineligible employees, and to automatically calculate the "earn" transaction amount for employees who work on a holiday. However, we are awaiting CalHR policy clarification regarding both Personal Holiday and Holiday Credit. System modifications for Personal Holiday and Holiday Credit that may be made without CalHR's input will be implemented between Fall 2015 and Spring 2016, respectively. In addition, we are currently developing a system change in which the leave accounting system will warn users when they attempt to credit an employee with an unusually high amount of earned hours. Users must validate the amount before completing the transaction. This warning message will be implemented by Summer 2016.

California State Auditor's Assessment of 1-Year Status: Pending

6-Month Agency Response

The SCO is working to identify and analyze potential system enhancements with the goal of preventing keying errors. For example, we are considering whether pop-up warning screens that alert users when they have keyed an unusually high earn amount will be effective. Another option that we are analyzing is the addition of limitations to the number of hours a user can key for high risk transactions for leave types such as Holiday Credit (HC) and Compensated Time Off (CTO). We are also continuing to investigate the most effective method to prevent employees from receiving annual leave and sick leave concurrently; whether improved automated controls are possible, as well as implementation of earlier detection through reporting on employees that are inappropriately accruing both benefits. We are actively working toward meeting the June 2015 deadline for this recommendation.

California State Auditor's Assessment of 6-Month Status: No Action Taken

60-Day Agency Response

We have begun the planning and analysis to determine if a cost-effective system change to prevent employees from receiving annual leave and sick leave concurrently is possible. We are also analyzing other controls we can implement to prevent errors, based on the information in the report. We expect to be able to meet the June 2015 deadline for this recommendation.

California State Auditor's Assessment of 60-Day Status: No Action Taken

All Recommendations in 2012-603

Agency responses received are posted verbatim.