The Manatee County School District overpaid its employees by hundreds of thousands of dollars in the previous school year, and while many repaid their unexpected debt, a recent audit found thousands more in accidental payments.
Manatee officials collected more than $242,000 after overpaying their employees in the 2018-2019 school year. Another $70,000 had yet to be collected during a review by Carr, Riggs and Ingram, the school district’s internal auditor.
Auditors recently discovered another $8,700, bringing the total overpayment to more than $321,000. Their report, dated Oct. 14, is up for discussion at Tuesday’s school board workshop.
In response, a district official said Manatee handles $221 million in employee salaries each year. Mindy Piantanida, a payroll administrator, said the overpayment equated to 0.14 percent of the money handled each year.
She said the goal is to have an error rate of 2 percent or less, citing the American Payroll Association.
“I think we’re doing great,” she continued. “We’ve done a great job collecting the money to get it back to the district.”
All current employees were notified of the issue, she said, while Manatee was still trying to contact a handful of former staff members.
Employees sometimes contact union president Pat Barber and ask whether the need for repayment is legitimate. When they find out that all employees are bound by contract to return the money in one year, their next question is how to budget for the unexpected debt.
“People have to pay back public money,” Barber said, noting that employees can either negotiate a payment plan or return the money all at once.
While overpayments were a historical problem, Barber said Manatee’s new business software — or ERP system — worsened the issue.
“Think about a paraprofessional who is living below poverty,” she said. “They don’t have that extra money to spare. Figuring out what they can afford to pay back is very difficult for them.”
Problems and solutions
Under former Superintendent Diana Greene, the school district replaced a computer system that was nearly two decades old. Jobs changed, operations evolved and auditors continually warned Manatee about the need to develop training and clear business practices.
In their new report, auditors cited issues with the new business management system, officially known as enterprise resource planning software. The infamous ERP system launched on July 1, 2018, more than $17 million over budget and riddled with defects.
While technical issues placed Manatee in a state of emergency for several months, auditors pointed to human error when explaining the overpayment issue.
There are multiple dates to include in the new system — the contract date, termination date and last paycheck date, for example — and each can impact the amount an employee receives, especially when someone enters the wrong information.
Some employees were terminated but district staff were slow to communicate and finalize their departure in Manatee’s new system. In other cases, new employees quickly resigned or failed to show up on their first day.
That information, much like the terminations, was not communicated in a timely manner, according to the report. Such “general” issues were connected to nearly $38,000 in overpayments that were later collected.
More than $31,600 was tied to the Extended Day Enrichment Program. Paraprofessionals and teaching assistants who worked in the program, held before and after school, had their hours counted twice — as both regular pay and overtime pay.
Sixteen retired employees were overpaid by more than $31,600 because the district was slow to input the information in Manatee’s new system. The issue was mostly isolated to a single period at the beginning of the year, and all payments were returned by January, according to the report.
“Since these were contract employees, the system automatically generated a paycheck as the retirement information was not entered into the system prior to payroll processing,” it states.
Another 46 Exceptional Student Education employees were overpaid by more than $141,000, the report continues, citing a “system issue.”
The report identified six high-priority issues that need to be addressed within two months. In general, auditors said the district needed clear, documented business practices, a recommendation they previously made in September 2018.
Employees would benefit from knowing “the full extent of their responsibilities” and how their actions impact the work in other departments, auditors reported. They also said Manatee should implement a “second review” of crucial dates and other information entered into the system.
In its response, Manatee said it already directed employees to review contract changes each morning, and it planned to document the process by December.
“They are to review contract payment details to ensure correct dates and correct payment details,” the district responded. “Any errors are to be corrected immediately and any issues that cannot be resolved are escalated.”
Other recommendations included further software testing, the use of a checklist when terminating employees and the development of a process to confirm that new hires actually begin their job. Auditors also emphasized the importance of continual reviews and communication between schools and the correct departments.
Included in the report was a bullet-point list of 19 solutions created by the payroll department. In its response to auditors, the district said many issues have since been corrected, while others would be addressed by Dec. 20.
“Many system improvements have been made over the last year by the ERP maintenance provider and district staff,” the response states. “The district will continue to improve upon all areas until all are functioning smoothly.”