Audit finds millions in overtime pay at L.A. transportation department

Four L.A. transportation department supervisors claimed $70,000 in OT; 1 manager drew $155,319

Last year, the average employee who paints stripes on roads and installs street signs for the Los Angeles Department of Transportation made $48,100 in overtime, almost six times what most other city workers received.

Four supervisors claimed $70,000 in OT, and one manager drew $155,319, effectively tripling his salary.

Those and other findings were in a transportation department audit issued Tuesday by City Controller Ron Galperin. It revealed in particular that workers in the paint and sign division collected what Galperin characterized as "staggering" amounts of overtime, costing the city $3.3 million in a single year and raising concerns that some of the extra pay might have been claimed improperly.

According to the audit, almost half the 67 employees in the paint and sign division claimed more than 1,000 hours of overtime in 2013-14. Seven claimed 2,000 hours, which would be an average of 38 extra hours of work per week.

Overall, the transportation department, which provided a paycheck to 1,961 workers last year, paid more overtime in 2013-14 than any other city department except the Fire Department.

Galperin also found that a provision in the department's labor agreement allowed some employees to collect overtime even if their workweek included vacation or sick days.

For example, an employee could collect 10 hours of overtime if they were scheduled to work 10 hours a day Monday through Thursday, took a vacation or sick day Thursday, then worked 10 hours on Friday.

The audit notes that about half the city's labor agreements allow this practice. By eliminating the provision, the controller estimated that the transportation department alone could save $1.2 million in payroll costs annually.

"Overtime abuses like this jeopardize trust in local government and absolutely must be corrected," said City Councilman Mike Bonin, who chairs the council's transportation committee. The "audit highlights crucial improvements that must be made" to protect taxpayers.

Galperin said the amount of overtime combined with a lack of proper controls within the department raised questions about whether employees truly worked all the extra hours.

"One might reasonably conclude that at least some of the employees in the traffic paint and sign section were committing payroll fraud," the audit stated. But at this time, the report said, there is insufficient evidence to support a criminal investigation.

Although overtime is often appropriate, Galperin said, department officials were unable to show that the overtime had been approved or detail the work done.

"There is not evidence to show that the work was not done," he said, "but then again, there is not evidence to show what was done."

Appearing at a news conference with Galperin, Seleta Reynolds, the new general manager of the city's transportation department, said she had accepted the findings and promised to reform the agency's overtime policies.

She said one supervisor has been removed and another assigned to a different city department. Reynolds declined to elaborate, stating that personnel matters are confidential under state law. Both workers, however, remain city employees, she said.

Reynolds said some of the surge in overtime could have resulted from increasing workloads. When Mayor Antonio Villaraigosa was in office, more than 100 miles of bike lanes and thousands of miles of resurfaced city streets needed to be striped.

"With three crews and two trucks it was hard to keep up," said Reynolds, adding that the council has approved at least 20 new employees for the paint and sign unit.

Mayor Eric Garcetti offered no specific reaction to Galperin's overtime findings, other than to say that he believed Reynolds — who he appointed to lead the transportation department — "has taken proactive steps to address this issue," said spokeswoman Vicki Curry.

The audit noted that staffing levels in the division have decreased 20% since 2010, and new projects may have required more hours of work. But Galperin said that does not justify a 263% increase in overtime in the division during the same period.

Bob Schoonover, president of SEIU 721, the union that represents the workers, said understaffing at the department has required extra hours on weeknights and weekends on a regular basis.

"We have a zero tolerance for individuals taking part in any abuse of the system, and if that is the case the department leads have a responsibility to address the issue head-on; this includes addressing the understaffing issue immediately and enforcing an internal environment that encourages ethical conduct," Schoonover said.

The controller's office also found that after the audit began overtime dropped an average of 44% among the largest recipients in the traffic paint and sign division. Galperin said that suggested some employees may have been improperly collecting overtime and curtailed claims when auditors began scrutinizing the records.

"It certainly raises a lot of very serious questions," he said.

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