Audit Reveals Full Extent Of GovGuam’s Illegal Retroactive Pay Raises

Limitations in payroll system had unintended consequences

By Shawn Raymundo

HAGÅTÑA, Guam (Pacific Daily News, June 8, 2016) – The Office of Public Accountability on Wednesday released its audit on the controversial raises that Attorney General Elizabeth Barrett-Anderson determined were illegal because it violated the government’s anti-retroactive compensation laws.

Under Guam law, government employees — both classified and unclassified — are prohibited from receiving retroactive pay raises unless authorized by a specific law.

According to the audit, the administration in December 2014 paid $742,849 to cover the raises of more than 100 employees. The gross pay for the staff amounted to $566,180, making the government of Guam’s share for retirement contributions $168,570. Medicare taxes and other deductions made up $8,099 of the total.

The raises made news last fall when Vice Speaker Benjamin Cruz’s office found that payroll expenses at the governor’s office had spiked by nearly $800,000 during a single pay period in December 2014.

Adelup’s average pay period prior to the spike was $210,000, but in the following months the average payroll cost was $260,000, leaving Cruz to suspect raises were given in a retroactive lump-sum payment.

Personnel records Adelup released last fall show the pay raises for many of the employees were authorized in December 2014, but were effective in January 2014.

Some of the employees received retroactive pay even if they were employed only for a few to several months, personnel records show.

Cruz later asked Public Auditor Doris Flores Brooks to conduct the audit and requested that Barrett-Anderson investigate the matter.

On Dec. 10, the attorney general sent a legal opinion to Calvo confirming the raises he awarded violated the anti-retroactive law. Barrett-Anderson advised the governor to either have the staffers repay the raises or get legislation passed legalizing the action.

The administration said it was never the governor’s intention to give retroactive raises and has stated that a computer glitch in DOA’s payroll system made the raises appear retroactive.

While the audit makes no mention of a computer glitch occurring at the time the administration was preparing the 2014 raises, it does note that limitations in the administration’s payroll software prevented Adelup from issuing a one-time pay adjustment in 2015. This adjustment was made so staffers could pay back the raises.

The audit states that these new payments were again retroactive payments.

Sixty-eight employees — the number of employees who still worked at the governor’s office since the 2014 pay adjustments — were given checks in amounts similar to what they were paid in December 2014, which were calculated by inflating their salaries and crediting them for 72 hours of work during one 24-hour day.

“The DOA AS4000 payroll system is set up such that the hourly rates and numbers must be keyed in,” the audit stated.

The OPA found those adjustments were coded as “R” for “retroactive payments” as the work dates inputted for the salary adjustment were between Nov. 23 and 28, 2015 — a week prior to the effective date of Dec. 7.

According to the audit, the administration department didn’t intend for the repayment action to again be retroactive.

“When the governor’s office became aware that the December 2015 pay adjustments were processed contrary to their intent, DOA was instructed to ensure that the pay adjustments were recognized as ‘other pay’ instead of retroactive pay,” the audit states.

After receiving the lump-sum repayment adjustment, the employees endorsed the money back to the government. However, only 67 of the employees re-endorsed their checks.

“One special assistant’s December 2015 check amounting to $4,561 was cashed in December 2015 and not endorsed to GovGuam. Her December 2014 pay adjustment check was never cashed, subsequently became stale dated, and was canceled by DOA,” the audit reported. “However, the December 2014 pay adjustment was reflected in the special assistant’s Form 2014 W-2.”

The report recommended the DOA director “establish and implement control measures to prevent errors in processing pay adjustments” such as updating signature cards for officials with authorization over personnel actions and personnel-related files.

For the December 2014 pay adjustments, DOA’s human resources processed the personnel actions despite not being able to sign off on the adjustment requests.

“It was not until we inquired with the governor’s office, wherein they identified the signature as belonging to the former chief of staff,” the audit report states.

In a statement from the governor’s office Wednesday, Adelup officials said they are reviewing the audit and are working on the recommendations the OPA provided.

The gross pay for the repayment plan cost $403,328.

“These employees did not repay with the personal funds,” the audit noted.

Since February, the attorney general’s office has been soliciting an attorney or law firm to independently investigate the Adelup raises. However, the procurement process has stalled as attorney Thomas Fisher, the Calvo’s former gubernatorial campaign counsel, recently filed a protest.

In recent months, the governor has drafted legislation to legalize the raises and has ordered all current and former staffers to repay their 2014 raises. The proposed measure is in Vice Speaker Cruz’s committee, but he has previously stated that he doesn’t support legislation that addresses an issue currently under or pending investigation.

Former employees were asked to set up a repayment plan with administration while current government employees will begin to see reductions in their pay starting next month.

The audit states that DOA has 30 promissory notes from Adelup employees, “most of whom will begin their voluntary payroll deduction as early as May 2016.”

Pacific Daily News
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