Over $40,000 In Guam Hospital Spending Questioned

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OPA blames weak oversight, inconsistency in practices

By Mar-Vic Cagurangan

HAGÅTÑA, Guam (Marianas Variety Guam, Dec. 3, 2013) – Guam Memorial Hospital (GMH) is implementing a lenient and inconsistently applied pay policy for physicians and certain employees, thus leaving room for abuse and overcompensation, according to the Office of Public Accountability (OPA).

The OPA has identified $40,000 in questioned payroll costs between 2010 and 2012, resulting from "weak management oversight" and "inconsistent practices" over the payroll for physicians and employees who are making more than $100,000.

The audit found there was a lack of scrutiny over radiologists’ hours; timesheets were not reviewed or approved; and work hours were not authorized or justified.

Auditors found that two exempt employees were compensated $9,000 in overtime, and $31,000 in additional straight-time was provided to a supervisor.

At least 18 employees were misclassified as exempt when their duties were of a non-exempt nature, the OPA said.

"These conditions occurred due to management’s ability to override the payroll system, (the Guam Memorial Hospital Administration’s) practice to allow additional compensation, and GMHA’s misclassification of exempt employees," the OPA said in a report released yesterday.

Questionable practice

The report noted that the additional straight-time compensation paid to certain exempt employees has been a practice at the hospital for several years, although it was not formally adopted by the GMH board.

Additional straight-time compensation is calculated as additional hours worked multiplied by the employee’s base rate.

"In line with the Fair Labor Standards Act, GMH is not required to pay overtime or compensatory time to employees in a bona fide executive, administrative, or professional capacity; except for exempt employees who provide direct patient care," the OPA said.

"Though this has been a common GMH practice and is not illegal, it is a questionable practice that is not equitably applied between executive line agencies and GMH," it added.

[PIR editor's note: Meanwhile, GMH Administrator Joseph Verga also asserted that GMH did not violate procurement rules or imperil funds for Guam, contradicting Public Auditor Doris Brooks, who last week noted an anomaly in bidding processes when GMH lifted an automatic stay and awarded a kidney machine contract to MedPharm, despite a protest by JMI Edison.]

Over 3,000 hours

The OPA found that of 16 employees at the housekeeping department, four consistently worked in excess of 3,000 hours annually during the three-year period covered by the audit.

Of the four, two housekeepers received $115,000 in overtime; one was compensated an average of $44,000 annually and worked an average of 1,605 hours or $25,000 in overtime.

The rest of the housekeepers worked in excess of 2,500 hours annually during the three-year period.

"GMH does not have any built-in mechanisms within its payroll system to indicate when an employee is exceeding their scheduled hours within a pay period," the OPA said. "Had their safe hours of work policy been formally adopted, these four employees would have worked beyond what the policy would have typically allowed."

Part-time jobs

Because GMH is mandated to provide round-the-clock medical services, full-time and part-time employees have enhanced opportunities to receive significant compensation over their base pay.

However, the OPA found that GMH has not established a compensation threshold policy.

The OPA’s analysis revealed that 46 received compensation ranging from 50 percent to 316 percent over their base pay.

The OPA recommended that GMH amend the classification of exempt positions to reflect the Code Federal Regulations requirements of said duties; restrict positions considered "exempt" from overtime compensation; and adopt the safe hours of work policy.

"We also reiterate our previous recommendation to automate certification and weekend pay within its payroll system," the OPA said.

"GMHA management generally concurred with the findings and recommendations and have introduced new processes and internal controls to ensure accurate human resources and payroll procedures," the report added.

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