Sunday, July 25, 2010

US Embassy Baghdad: 777,888 Hours or $36 Million of Overtime

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State's OIG released last Friday an audit of Embassy Baghdad's Internal Controls for Overtime Pay. Here is the lowdown on overtime according to the report:

Overtime for American personnel is defined as those hours in excess of the 40-hour work week. American personnel eligible for overtime include uncommissioned Foreign Service Officers, Foreign Service specialists, and General Schedule personnel. Senior Executive Service, Senior Foreign Service, and commissioned Foreign Service Officers are not eligible for overtime. Three general categories of American personnel are eligible for overtime:

1. Temporary Duty (TDY) employees. These employees are short-term, lessthan 6 months, and long-term, more than 6 months but less than 1 year.
2. Permanent Change of Station (PSC) employees. These permanent postemployees have assignment orders for a 1- or 2-year tour.
3. Section 3161 hires. These are employees who are hired under a specialauthority (5 U.S.C. 3161). The employees are assigned to the Iraq TechnicalAdvisory Office in Washington, but most are sent TDY to Iraq. The employees’ U.S. Government appointments terminate when their Section 3161 appointments end.


OIG reviewed overtime for 2008 and 2009 and found that American employees in Embassy Baghdad submitted 777,888 hours of overtime, totaling about $36 million, for those 2 years. During 2008, an average of 287 (50 percent) of 570 Americans claimed overtime during each pay period, with a total cost for that year of $18,207,654. In 2009, an average of 352 (51 percent) of 695 Americans claimed overtime during each pay period, with a total cost for that year of $17,745,039. 

Although OIG found that the average number of claimants increased for 2009, the number of overtime hours actually decreased, from 400,875 to 377,013 hours. Since the time of OIG’s audit, Embassy Baghdad has initiated a program to monitor the number of overtime hours worked and to send quarterly reports to supervisors for an explanation of excessive amounts. While the Embassy’s program assesses indications of potential abuse of overtime hours, it does not address compliance with supervisory authorization for overtime, supervisory approval of timesheets, or the provision of complete and accurate information to Charleston (SC) Global Financial Services Center for payment.


Embassy Baghdad did not have adequate internal controls to support the overtime payments because supervisors did not authorize overtime in advance of overtime performed; did not certify timesheets after the work was performed; did not certify overtime for payment in the proper period; and did not require T&A documentation to support overtime payments, such as leave and approved absences. For example, employees and supervisors did not always sign timesheets, and employees used different types of timesheets that often lacked key information, such as lines for supervisor or employee signatures and dates of certification


Embassy Baghdad’s internal controls for authorizing and approving overtime were weak, and Charleston needed to improve its quality controls for processing overtime payments. Based on its review of overtime payroll records, OIG found noncompliance with policies and regulations for authorizing, reconciling, and documenting T&A reports. Specifically, Embassy Baghdad officials
  • Did not enforce regulations requiring supervisors to approve T&A reports based on actual hours worked and authorize overtime hours in advance of work.
  • Did not require employees to attest to the accuracy of the hours and leave charges shown on their T&A reports.
  • Allowed employees, not their supervisors, to transmit their time sheets directly to Charleston.
Until these deficiencies are addressed, Embassy Baghdad will have no assurance that payroll expenses for overtime and related T&A information is reliable, increasing the risk for fraud and abuse. OIG notes that disciplinary penalties exist at the post for noncompliance with such T&A requirements as signatures and overtime justifications, although OIG was unable to determine whether the post initiated any disciplinary actions. (Time and attendance requirements for American personnel at Embassy Baghdad are summarized in Appendix B.)


OIG’s July 2009 inspection report on Embassy Baghdad indicated that supervision over overtime claimed by Section 3161 contract employees was inadequate. To determine whether Section 3161 employees had a predominant amount of overtime, OIG analyzed overtime by the three general categories of American personnel eligible for overtime. OIG found that during 2008 and 2009, 44 percent of the personnel were Section 3161 hires, 37 percent were Permanent Change of Station employees, and 19 percent were Temporary Duty employees. While Section 3161 employees received the greatest share of overtime, OIG determined that the amount of overtime was not excessive when compared with that of other types of employees.

Active links added above. Read the whole thing here.

Related item:
OIG Report No. AUD/CG-10-25, Embassy Baghdad Internal Controls for Overtime Pay - June 2010


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