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The Hays County Commissioners Court took steps to remedy the county's recent employee payroll issues.
During the court's regularly scheduled meeting Tuesday, up for review were payroll issues that included overpayments, and late payments to deferred compensation account discrepancies.
Hays County Budget Officer Vickie Dorsett said overpayments are a regular occurrence.
“At the direction of the court, obviously, my office has recently taken over the payroll processing duties. We’re currently working through the payroll errors that were previously identified. Because of the way we pay, it’s not uncommon to have overpayments or underpayments.
'We pay up to the date, the direct deposits due before the end of that pay period. It could be supervisors not turning in payroll change notices, a pay rate change or a promotion … or a demotion and those types of errors could result in overpayments or underpayments,” Dorsett said.
She said that two payments stood out over the rest–one was tied to FMLA leave and the other was connected to worker’s compensation. These resulted in an overpayment of approximately $9,000.
“We have discovered two very large overpayments. Typically, we’re able to handle the overpayments within the next pay period–the next pay cycle,” she said. “These particular overpayments are more than their monthly payroll.”
Dorsett said there are available methods to consider to keep these errors from reoccurring.
“The options would be to make those employees inactive, then they would be working with no pay until the county recouped those overpayments, or you could authorize my office to work with these individuals on a repayment authorization process,” she said.
Hays County Commissioners Court Judge Ruben Becerra said he preferred the repayment process option.
“I don’t care how much money you make, no one is usually going to be able to say, ‘Well, I’ll work for this pay period or these pay periods for no pay,’” Becerra said. “So, I support your idea of the repayment plan.”
Dorsett said it is difficult to determine how to allocate repayments.
“It’s hard to say what’s a hardship to one employee versus another. We also run the risk of those employees leaving,” she said.
Commissioner Lon Shell said there should be a regular error policy to ensure efficiency.
The court voted unanimously to support an ongoing authorization requested by Dorsett. “To allow the Budget Office to work with employees as needed on overpayments in an effort not to create hardships,” she said.
To remedy negative impacts on employees deferred compensation accounts from payroll errors, the court voted unanimously to authorize Dorsett to work with VALIC Financial Advisors on a makewhole contribution process.
Dorsett said some county employees had expressed concerns over the impact to them of late payments on deferred compensation accounts.
“I have received a few phone calls from employees asking if there was a way to determine if there were any lost interest in their accounts, so I did reach out to VALIC, our financial advisor. They have a make-whole contribution,' Dorsett said.
'These would be related to the April 15, 30 and May 15 untimely funding of the employee deferred compensation accounts. So, the employees can elect, when they’re hired, to have funds deducted from their payroll into their deferred comp accounts which is similar to a 401K–a retirement account. Those funds are withdrawn every pawy period. During those three pay periods, those funds that were withheld from those employee accounts –which was approximately 200 employees –they did not get dispersed to their deferred compensation accounts.' She said the financial advisor recommended that she a formal request for a make-whole contribution and to fund 10% of the contributions that were not sent on time.
She said these payments were about $4,300, and there would be a $100 an hour fee for the service.
“They’ll go back in and look at any gains, what the market was doing and what amount that employee should have deposited into the account, but they require those funds in advance so they can have something to pull from should they recognize that there was some lost interest,” Dorsett said. “Any funds that were not used will return to the county.”
Hays County Treasurer Daphne Tenorio was previously responsible for completing payroll for county employees.
“The summary for this particular item states that the amounts were not paid. That is incorrect … When these payments were applied, when we took them over, when it was handed over to our assistant treasurer who had not been trained, we were having difficulty uploading the files to VALIC,' Tenorio said.
'Here’s some of the emails that we sent. We ended up sending the files over by Excel to VALIC, and they took care of it. We had no idea that it had not been invoiced,” Tenorio said. “May 18, I met with our auditor [Marisol Villareal- Alonzo] and Commissioners Cohen and Ingalsbe, and that was the first time that I had been made aware by our auditor that these payments had not been received. I had not been aware that it had not been done. The very next day, May 19, I contacted VALIC immediately and funded every single one of the VALIC payments … One of the amounts was $15,230.06. One was $14,082.99. One was $13,628.06, and there was a supplemental [payment] for $80.
'I also brought with me a copy of the bank statement that shows that they’ve cleared. In this request, it is requesting 10% of $40,000. That is a high request considering that these amounts have already been paid.”
Tenorio said that she agrees that the deferred compensation accounts need to be made whole, but disagrees with the wording of the agenda item in that the payments were late, not missed.
