2005 Audit Recommendations - Status Tracking

Audit: Overtime (EMC Lead: G. Geddes / Staff Lead: L. Pearce)

Audit Recommendation

Management Response

Comments

Budget Implications
2007 or Beyond

Related Council Motions

Status Update

Audit Management Response

Action Required Based on DCM Implementation Plan

Management Timelines (Q1- Q4)

(Risks, issues regarding implementation, etc)

($$ if known)

c) explore the possibility of modifying the collective agreement to alter Fire Prevention staff work/shift schedule to reflect job requirements, as is the practice in other areas within the Fire Services Branch.

Management agrees with this recommendation. The comprehensive review will assist in determining optimal levels of overtime for this service.

The comprehensive review will assist in determining optimal levels of overtime fore this service.

On-going

This issue is currently being addressed as part of the 2006 collective bargaining process. Once negotiations are complete and the requirement for arbitration is determined more information will be available.

j) explore the opportunity to have one point of data entry with next MMS system to reduce data entry workload and data entry errors.

Management agrees with this recommendation.

Feasibility study to be undertaken under the ITX replacement project.

2008

Small components of a very large project
Involves Corporate IT
Involves many stakeholders outside USB

Implementation of this recommendation requires completion of the MMS-ITX replacement project. This project is proceeding, but is not expected to be complete until 2008.

g) review corporate financial system data on overtime hours monthly as a mechanism to track high overtime users and reconcile the data to MMS-ITX and MMS-SAP ensure high levels of data integrity.

Management agrees with this recommendation. Reconciliation of SAP Financial with MMS will form part of the monthly budget review.

Requires ITX Replacement

2008

Implementation of this recommendation requires completion of the MMS-ITX replacement project. This project is proceeding, but is not expected to be complete until 2008.

h) explore the opportunity to have one point of data entry with next MMS system to reduce data entry workload and data entry errors.

Management agrees with this recommendation. The ability to link the replacement for ITX MMS to the SAP payroll system will be requested in the new system requirements. It should be noted that the responsibility for this project is with the Corporate IT

Michel Chevalier on ITX Replacement TAC

2008

Small components of a very large project
Involves Corporate IT
Involves many stakeholders outside USB

Implementation of this recommendation requires completion of the MMS-ITX replacement project. This project is proceeding, but is not expected to be complete until 2008.

h) review corporate financial system data on overtime hours monthly as a mechanism to track high overtime users. For Waste Collection Operations, reconcile the data to the Excel database to ensure high levels of data integrity.

Management agrees with this recommendation. A process will be put into effect in 2006.

Monthly review of overtime hours per employee.

ongoing

Almost complete

90% Complete. Process will be completed and in effect Q2 2007.

For the areas covered in the 2002 Audit of Overtime Costs (Transit Services, Fleet Maintenance, Paramedic Services and Surface Operations), Management should monitor and manage overtime expenditures within the limits of their established budgets.

Management agrees with this recommendation. Management acknowledges that the budgeting for overtime has been flawed, and that overtime budgets should have been revised to more closely reflect actual requirements.

The comprehensive review will help identify the optimal levels of overtime in these areas and budgets will reflect those levels.

Deloitte is currently conducting an OT Branch by Branch Review.

None

Council motion #9: "And be it further resolved that the report on the comprehensive overtime review include complete information on overtime budgets and actual spending, including any adjustments that are recommended as a result of Council's direction."

Management has taken aggressive attendance management measures in each of these service areas, as indicated by the Auditor General, and will continue to monitor and manage attendance to help keep overtime as low as possible. It should be noted, however, that these are 24/7 on the street services and overtime will continue to be a necessary part of operations for a number of reasons: overtime must be paid to those who provide service on statutory holidays and to those who respond to emergency/weather-related situations. These are services that must be provided so, when the City has hiring freezes in effect the service is provided by existing staff working overtime. In some cases, as in Paramedic Services and Transit Services, overtime is accrued for contracted services that the City receives revenues for. In Transit Services, the 2004 KPMG Transit Operator Establishment Review stated that within limits (total work hours), overtime is more cost effective than straight time for the City, because benefits are not paid on overtime wages.

The comprehensive review will help identify the optimal levels of overtime in these areas and budgets will reflect those levels.

Departments should better monitor and manage overtime within the limits of their established overtime budget. This would include modification of shifts to address expected workload, better management of absenteeism, and an active budget review process.

Management agrees with this recommendation.

Management will establish clear protocols around the specific criteria for overtime. This will be part of the comprehensive review.

None

That the CSEDC Cttee recommend Council approve the implementation of all of Deloitte Consulting's recommendations effective immediately, via Council's Audit Working Group; That the implementation of all the recommendations be complete by June 1, 2007.

Adjustments to the overtime budgets were made in 2006 and included in the report to Council that accompanied the 2006 Branch-by-Branch Overtime Review conducted by Deloitte Consulting. This report was tabled at CSEDC on Feb 6, 2007. Adjustments were made in consultation with directors and were based on historical data.
All the recommendations from the Deloitte report will be implemented including the development and implementation of a corporate-wide and branch-specific overtime policies and procedures.

Management will establish clear protocols around the specific criteria for overtime on a service-by-service basis, and this will be part of the comprehensive review. Overtime budgets will continue to be managed as part of the overall compensation budget, rather than as a single line item. Overtime is generally not viewed in isolation of the overall compensation budget and it is management's view that it should not be viewed in isolation given both the 24/7 nature of many City services, the unpredictability of some significant service drivers (i.e. weather conditions, infrastructure failure like water mains or traffic lights, etc.) and the hiring freezes that have been put in place over the past three years. All of these factors are managed within the total compensation envelope to continue to provide front-line services where and when they are needed.

Departments should utilize the corporate financial system's full functionalities to monitor, control, and reduce total overtime as well as individual employee overtime and that where required, staff be provided with additional training. In addition, that any use or maintenance of sub-systems other than the corporate financial system should be discontinued. In order to ensure the corporate financial system's information accuracy, departments should address the time lapse of employees submitting the required leave/overtime forms.

Management agrees with the intent of this recommendation.

This will be part of the comprehensive review. Given the number of different facilities, however, management expects that there will always be some time lapse in many services. The review will address methods of minimizing that lapse.

This will be part of the comprehensive review. Given the number of different facilities, management expects that there will always be some time lapses in many services. The review will access methods of minimizing this.

None

The 2006 Branch-by-Branch Overtime Review conducted by Deloitte Consulting was tabled at CSEDC on Feb 6, 2007.
All the recommendations from this report will be implemented.

That Employee Services develop clear policies and guidelines regarding the management of overtime.

Management agrees with the intent of this recommendation.

However, management believes most policies and guidelines will be developed on a service-by-service basis rather than a corporate basis given the number of operational variables between branches e.g. service commitments, staffing and budget levels and applicable collective agreements.

Management agrees with the intent of this recommendation. Most policies and guidelines will be developed on a service-by-service basis rather than a corporate basis given the large number of operational variables between branches.

None

Following corporate review, as above.

That the report on the comprehensive overtime review include complete information on overtime budgets and actual spending, including any adjustments that are recommended as a result of Council's direction, and that for the remainder of 2006, the Operating Status and Forecast Report provide City Council with a detailed accounting of compensation, including actual allocations for overtime, salary and benefits.

As above. Deloitte is conducting Branch by Branch overtime review.

None

Other Miscellaneous Items as directed by Council

City of Ottawa Branch-by-Branch Overtime Review

Feb 14, 2007 City Council.
That Council:
1. Receive for information the report prepared by Deloitte Consulting entitled, City of Ottawa Branch-by-Branch Overtime Review Final Report dated September 7, 2006; and

2. Approve that discussion of overtime budgets take place on a service by service basis as part of 2007 budget deliberations so that any changes contemplated to those budgets would be understood as they relate to service levels or standards;

3. Approve the implementation of all of Deloitte Consulting’s recommendations, effective immediately, via Council’s Audit Working Group;

4. That the implementation of all the recommendations be complete by June 1, 2007; and
That the Audit Working Group report to the Corporate Services and Economic Development Committee and Council no later than June 30, 2007 confirming the completion of the implementation of all the recommendations.

n/a

To be completed by ES and CCSO

No Later than June 1, 2007

Mar-6
CAWG initial discussion

Implementation to be complete by Jun 1, 2007 with a report to CSEDC and Council no later than June 30, 2007 confirming the completion of the implementation of all the recommendations.

2006 Deloitte Branch-by-Branch Overtime
Review

CITY WIDE

Develop Overtime Policies.

The Employee Services branch should develop a corporate-wide overtime policy. This policy should identify the overall direction for City managers with regard to the acceptable use of overtime, the expectations for how City managers are to budget, manage and control for the use of overtime, and the requirements for reporting on the use of overtime in their branches and divisions.

The Employee Services branch has developed a draft corporate-wide policy and accompanying procedures regarding the City’s overall management of overtime. This document is scheduled to go to the Management Advisory Committee in March, 2007.

Q1 to the Management Advisory Committee

Draft policy went to the Management Advisory Committee in March. It now goes to EMC for approval.

Develop Overtime Procedures.

The Employee Services branch should develop corporate-wide overtime procedures. These procedures should include definitions of discretionary versus non-discretionary overtime, procedures for requesting and approving overtime, procedures for overtime recording/coding, and procedures for overtime tracking and reporting. Some branches may need to further develop branch-specific overtime procedures in order to address specific operational requirements.

The draft policy includes the requirement for branches to develop a branch-specific guideline/procedure/protocol to complement the corporate document.

Q1 to Management Advisory Committee

$20,000

Draft policy went to the Management Advisory Committee in March.It now goes to EMC for approval.

Develop Overtime Base Budgets.

Appropriate overtime base budgets need to be established and implemented in order to more accurately account for and justify the overtime requirements of the branches.

In response to the Council Motion No. 47/86 that, “the City Manager be delegated the authority to adjust overtime budgets within the total compensation envelope to reflect actual spending where necessary” adjustments have been made. Adjustments have been made in consultation with directors and were based on historical trends and forecasted needs.

$70,000. This does not include subsystem costs which are to be determined.

Complete

Adjust Overtime Base Budgets.

For fiscal year 2006, each branch should be granted a one time base budget adjustment to more accurately reflect actual overtime costs. After this one time adjustment, further changes should be made on a case-by-case basis.

Complete

Track Overtime to Revenue Earned/Costs Recovered.

New cost codes should be established on timesheets and in SAP to more accurately track and link overtime directly to the revenue earned and/or the costs recovered.

If the creation of cost codes is deemed to be feasible, it will be incumbent on operational departments to work with Finance to establish the nature and extent of the cost codes required to better understand the relationship between overtime and revenue/cost recovery for business planning and decision making. The Payroll Division would then work with operations to incorporate this into the time entry process.

TBD

Will require the cooperation of all branches across the City.

Employee Services has begun work with Finance and the SAP technical team to investigate whether cost codes can be established in SAP to link overtime to revenue/cost recovery.

Define Service Levels.

Service level requirements for each branch should be more clearly defined to enable branch management to more accurately plan for and manage overtime costs that are incurred to achieve targeted service levels.

Branch managers will determine the appropriate balance between maintaining service levels and overtime usage as part of the development of a branch-specific guideline/procedure/protocol. Branches will outline when important but non-mandated service activities will be approved for overtime (e.g. requests to attend meetings or events outside of regular working hours).

TBD at Management Advisory Committee

This has been included as part of the draft policy that went to the Management Advisory Committee in March.

Record/Code Overtime.

Common procedures for recording/coding of overtime should be implemented across all branches to ensure that overtime costs are being consistently tracked and reported.

It was determined during the Review that for some branches, statutory holiday pay premiums were being incorrectly coded in the SAP system. As a result, overtime expenditures for 2005 were overstated by over $1 million. If statutory holiday overtime had been reported consistently and/or correctly across the branches then total overtime on statutory holidays would decrease approximately 55%, from $2.7 million to $1.2 million. This did not result in any employees being overpaid for working on a statutory holiday.

The Payroll Division has completed the analysis of the coding anomalies and has determined the proper coding for overtime versus time worked on a statutory holiday. Configuration changes will be required within SAP. This has been added to the 2007 Payroll/Support Centre work plan. Any changes that are not seamless to the client will be documented and communicated through training and/or bulletins.

Track Overtime Causes.

New cost codes should be established on timesheets and in SAP to track and report overtime causes.

A project started in Q4 2006 with Payroll Division working with operational groups to develop a standard list of cost codes that will track and report overtime causes within SAP.

Project started in Q4 2006
Stage 1 (for branches that input directly to SAP): Q3

Stage 2 (where input is done via sub-systems); TBD

This may be a significant project where subsystems are feeding SAP, as those systems will require enhancing if the requirement is to have all information housed within the SAP system.

Employee Services has received feedback and a costing from the SAP Support Centre to implement a tracking system for overtime causes within SAP.

Transit Services (TS)

TS
1

Reduce Absenteeism

Transit Services should continue to focus on reducing absenteeism.

TS
2

Improve Process to Fill Vacancies

Transit Services should continue to focus on improving its process for recruiting and filling vacancies for Bus Operators.

TS
3

Review Target Service Levels on Overtime

Transit Services should review target service level of 99.5% against similar organizations so they can assess the appropriateness of this targeted service-level benchmark.

TS
4

Review Collective Agreements

Transit Services should consider re-negotiating the collective agreements in regards to the use of overtime on weekends by senior staff.

Fleet Services (FS)

FS
1

Track Overtime to Costs Recovered

In order to accurately reflect overtime expenditures, Fleet Services should track and report all overtime related cost-recoveries in conjunction with overtime costs.

FS
2

Reduce Absenteeism

Fleet Services should continue to focus on reducing absenteeism.

FS 3

Develop Overtime Policies and Procedures

Fleet Services should develop and document overtime policies and procedures. Employees should be properly trained on the use of these policies and procedures and managers and supervisors should ensure compliance with these policies and procedures.

FS 4

Restructure Shift Schedules

Fleet Services should continue to review and change shift schedules, as necessary, in order to keep more buses on the road and improve service levels.

Surface Operations (SOP)

SOP
1

Reduce Absenteeism

Surface Operations should continue to monitor and reduce absenteeism in the branch.

SOP
2

Improve Process to Fill Vacancies

Surface Operations should continue to reduce the number of vacant positions within the branch.

SOP
3

Improve Overtime Tracking

Surface Operations should continue to ensure that more detailed overtime tracking capabilities are developed.

SOP
4

Develop Overtime Policies and Procedures

Surface Operations should develop and document overtime policies and procedures. Employees should be properly trained on the use of these policies and procedures and managers and supervisors should ensure compliance with these policies and procedures.

Utility Services (US)

USB
1

Track Overtime to Costs Recovered

To accurately reflect overtime expenditures, Utility Services should track and report all overtime related cost-recoveries in conjunction with associated overtime costs.

Ottawa Paramedic Services (OPS)

OPS
1

Review Staffing Needs

Paramedic Services should fully assess its appropriate staffing needs in order to meet call volumes and should receive budgetary approvals to meet these needs.

OPS
2

Reduce Absenteeism

Paramedic Services should continue to monitor and reduce absenteeism in the branch.

OPS
3

Track Overtime to Costs Recovered

To accurately reflect their overtime expenditures, Paramedic Services should track and report all overtime related cost-recoveries in conjunction with the associated overtime costs.

Real Property Asset Management (RPAM)

RPAM 1

Track Overtime to Costs Recovered

To accurately reflect overtime expenditures, RPAM should track and report all overtime related cost-recoveries in conjunction with the associated overtime costs.

Traffic and Parking Operations (TPO)

TPO
1

Track Overtime to Costs Recovered

In order to accurately reflect overtime expenditures, Traffic and Parking Operations should track and report all overtime related cost-recoveries in conjunction with the associated overtime costs.

TPO
2

Reduce Absenteeism

Traffic and Parking Operations should continue to monitor and reduce absenteeism in the branch.

TPO
3

Develop Overtime Policies and Procedures

Traffic and Parking Operations should develop and document overtime policies and procedures. Employees should be properly trained on the use of these policies and procedures and managers and supervisors should ensure compliance with these policies and procedures.

Infrastructure Services (IS)

IS
1

Track Overtime to Costs Recovered

To accurately reflect overtime expenditures, Infrastructure Services should track and report all overtime related cost-recoveries in conjunction with associated overtime costs.

IS
2

Develop Overtime Policies and Procedures

Infrastructure Services should develop and document overtime policies and procedures. Employees should be properly trained on the use of these policies and procedures and managers and supervisors should ensure compliance with the policies and procedures.

Fire Services (FS)

FS
1

Reduce Absenteeism

Fire Services should continue to monitor and reduce absenteeism in the branch.

FS
2

Track Overtime to Costs Recovered

To accurately reflect the overtime expenditures, Fire Services should track and report all overtime related cost-recoveries in conjunction with the associated overtime costs.