Monitor to oversee school payroll repair

For eight months a defective payroll system has wreaked havoc on the Los Angeles Unified School District, leaving tens of thousands of employees unpaid, paid too little or overpaid. With a solution still months away and the fallout worsening, the district’s Board of Education took an unusual step last week, deciding to hire an independent monitor, who will report to the board on district efforts to rectify the debacle.

Board President Monica Garcia, who made the move after consulting with her colleagues, said the outside observer will act as the board’s eyes and ears, providing it with frequent assessments of the ongoing, complicated attempt to rewrite faulty computer programs that continue to cut thousands of erroneous paychecks each month.

Board members have grown increasingly concerned that the problems have not been solved even though school district staffers and expert consultants have been trying for months. The pressure to make fixes has spiked in recent weeks as the district confronts the prospect of issuing inaccurate tax forms to employees and the likelihood that it will miss financial reporting deadlines mandated by the state.

“Given the clarity we have now of the impact of this crisis, I wanted to make sure we have a technical person involved who can validate, verify and challenge information,” Garcia said. She voiced support for district Supt. David L. Brewer’s handling of the payroll problems, which he inherited when he was hired late last year, and said the decision to hire the monitor did not signal a lack of confidence in him. “I have every expectation that our people are doing the best they can,” she said.

At a meeting Tuesday, other board members pressed Brewer and his senior staff for details about the pace and strategy for correcting the payroll system’s failures.

“This is a crisis for the district. We are in a crisis, and I expect you to resolve it immediately,” board member Marlene Canter told Brewer.

“I am losing confidence in our ability to do what we need to do for our people on the front line,” board member Richard Vladovic added. Later, while the board was debating whether to approve Brewer’s request to pay a technology consulting firm up to $10 million to help devise a remedy, Vladovic grew irritated when staff could not precisely explain what the firm was expected to accomplish. The board eventually approved the one-year contract.

Brewer said he welcomed Garcia’s decision to bring on the independent observer saying it would free his staff somewhat from the time-consuming task of briefing board members. “It’s fine with me,” he said in an interview.

Garcia echoed Brewer, saying, “The people running the recovery effort cannot be in seven different places every day giving briefings. That’s not efficient.”

Part of a comprehensive $95-million technology upgrade, the payroll system was heralded as a modern, efficient replacement of the district’s antiquated, largely manual process that had been in place for four decades. But from the outset, in February, it has been plagued with problems. Early on, some of the paycheck errors were the result of mistakes made by timekeepers and office clerks, who had received hurried and insufficient training on the complicated computer program.

Serious glitches in the computer software programs have proved more intractable. The hardest hit have been the district’s roughly 48,000 certificated employees -- teachers and others who require credentials to perform their jobs. The computer programs have not been able to accurately account for their complicated, varied job assignments and pay scales. At the heart of the problem is that teachers work 10 months each year but are paid 12 times, and the system was not designed to correctly spread out, or annualize, the salaries.

The worst month was June, when about 30,000 paychecks had errors -- nearly all of them overpayments. This month, 3,800 more teachers and others were affected.

The result has been disastrous for teachers and others. With payday occurring only once a month for most, many have struggled to make rent or mortgage payments, cover other bills and buy such basics as groceries. Each month, hundreds of frustrated employees spend hours waiting in district offices trying to resolve their problems, telling one another about the loans they have had to take out to avoid being evicted or having their cars repossessed.

Because of the widespread confusion and distrust among employees over the accuracy of their paychecks, district officials said, they postponed a plan this month to recoup overpayments, which total an estimated $53 million. But if payments are not set straight in time to produce accurate end-of-year tax forms, district officials have cautioned in recent weeks, employees could face a nightmare when they try to file income taxes in the spring.

“There is a crisis brewing, and it’s with good old Uncle Sam,” Vladovic said. “I am worried.”

Also looming is an Oct. 15 deadline for L.A. Unified to file a comprehensive report on last school year’s expenditures with state officials. Because of the payroll failures, district officials have not been able to complete their bookkeeping and pass the report on to county officials as required, making it unlikely that they will be able to meet the state deadline.

If the reports are more than two weeks late, state law allows California’s top education official to withhold the salaries of Brewer and board members, a move state education officials said is rare but not unprecedented.

Programmers have begun the painstaking process of rewriting the computer software using more sophisticated programs, but it will take two to three months to complete, district officials said. Another option, scrapping the 12-month pay calendar, is under consideration, but it would require making changes to labor agreements with unions.

Garcia said she hoped the independent monitor would be named and in place within two weeks and would act quickly to improve board members’ understanding of what is being done and how best to proceed. It is unclear how much the board will pay the monitor.

Deadlines “are coming. There is no more flexibility,” she said. “We have to act in ways we haven’t acted yet.”

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joel.rubin@latimes.com