|Controller Steve Barron|
It disturbs NorCo Controller Steve Barron, too. Below is a memo he sent to County Council yesterday, calling for greater internal controls over staff training and travel instead of an out-of control county that has authorized trips to Vegas,New Orleans, Atlantic City's Harrah Resort and other posh destinations. Specifically, he suggests that Council should approve all travel requests that are over 100 miles away.
As Controller, I have the duty to audit the fiscal transactions of all agencies that receive or disburse county funds, and report to you and the Executive if I determine that the potential for waste or abuse exists. I am empowered to audit the account of any agency, at any time, without interference and on my own initiative. The purpose of this report is to put you on notice that the potential for waste and abuse exists with staff development training and travel expenses, demonstrating a need for stronger internal controls.
Year-end budget numbers for 2016 reveal that the budget for staff development in the Department of Human Resources jumped from $5,749.35 to a staggering $56,758.15. This is an increase of 987% in one year (Exhibit 1).
I reviewed other county departments to compare those costs of staff development and training within the county (Exhibit 2). As you will see, the jail had the highest cost for staff development and training, but that is because the County was addressing drastic staff shortages and the training was mostly done in-house. The jail now has filled 196 of its 200 positions.
Human Resources did a lot of training away from the courthouse campus. To prevent potential waste and abuse and conserve taxpayer dollars, internal controls are needed to ensure that training and travel expenses are not abused.
As an example, I refer to an airfare charge for a two-night trip to the NeoGov User Conference (October 12-14, 2016) in Las Vegas (Exhibit 3). There is a hotel bill for that time period for two employees at the Mirage Hotel. There were two rooms purchased as one male and one female traveled on the trip. Conferences like this are meant more for networking and less about training. NeoGov was brought online in late 2014 and used through 2015. This conference was not so much about training and seems to be excessive if not outright abusive. The total cost for the airfare, conference fees and hotels was $2,434.32. This total does not include meals. This seems excessive when the Department of Defense only allows $102 max for a hotel and a $166 dollar per diem total in Las Vegas (Exhibit 4).
A second example is an airfare charge that came two months after the Las Vegas trip. This trip was for a Worker’s Compensation Conference in New Orleans, LA. Two male Human Resource staff members were scheduled to go on this trip, but only one went. Interestingly, this staff member is one of the two who had just traveled to Las Vegas two months earlier. He stayed from 11/29/2016 until 12/2/2016 in New Orleans (Exhibit 6). The cost for airfare and hotel on this trip was $1,297.68. This cost does not include fees for the conference or meals. The Department of Defense per diem rate in New Orleans is $192-220, and the funds expended by the County appear to have been in excess of that allotment.
This same staffer is currently registered for a Harrisburg Worker’s Compensation Conference in June. This begs the question whether the New Orleans travel was really necessary as there are clearly conferences much closer. Also, how many training conferences does this employee need to be proficient in Worker’s Compensation?
The Controller’s office uses software for data analysis called ACL. This software has a user conference as well. In 2017 it is in Nashville, TN. While I would love to send my staff to this conference, it is would be a poor use of taxpayer money. We have instead formed a user group with several members of the Institute of Internal Auditors and that group meets at PP&L on a regular basis.
I am sure there are users of NeoGov in close geographic proximity to Northampton County where the Human Resource Office can apply a similar strategy to save taxpayer money. The next NeoGov User Conference is at the MGM Grand in Las Vegas in October of 2017. It is my hope that Council can work to convince the County Executive that sending people this year would be a waste of taxpayer money.
I decided to check what other counties do when travel expenses are approved. In Lehigh County it is largely a function of the department head to anticipate training and travel during the budget process. In Cambria County (Johnstown, PA), County Commissioners must approve all travel outside the state. Cambria County is a 4th class county. Allegheny County has a very strict policy on travel, which I have attached (Exhibit 5). You can see that they limit travel and require several approvals. Allegheny County is a 2nd class county. Finally, Dauphin County, who is a 3rd class county like we are, has the county commissioner vote on all travel outside the routine mileage taken by workers who are required to travel off site as part of their job duties.
The final highlight of these expenses would be a $7,050.00 bill paid to Northampton County Community College for five employees in the Human Resource Department to be trained (Exhibit 7). These trainings were titled:
• Effective Interactions
• Situational Leadership
• Conflict Resolution Strategies
• Managing the Performance of Others
• Coaching for Improved Performance
• Basic Management Skills
This cost was approximately $1,400 per employee. This is excessive. In 2016, we spent approximately $700.00 per correction officer at the jail for their training and staff development. Someone hired into a professional human resources position should be proficient in them before they are hired into that department.
I wanted to also note that there are several meals that seem to be purchased and paid for on these trips and at these conferences that look to be in violation of Northampton County’s Policy on Travel, Meal and Mileage Reimbursement (Code 3.708). However, I will address those in the Procurement Card Audit that will be beginning this month. Several of the meals purchased in the Human Resource Department and throughout the county are purchased using Procurement Cards. This way we can do a universal look at the reimbursement policy and make recommendations based on a larger countywide view.
In closing, it is important to bring this to your attention now since the cost for this line item is already at $19,906.26 (as of 4/12/2017). At the end of 2016 there was discussion of budget transfers to pay a vendor that ultimately led to that bill being paid in 2017. In the e-mail attached Doran Hamann said to one of the disbursement staff that there was no more money to move in 2016 (Exhibit 8). The bill was paid in the 1/06/2017 check run when there was money in the budget to cover the expense. The e-mail exchange was attached to the bill that was paid in 2017 as justification for holding the bill and delaying payment.
Clearly some of these 2017 expenses are not budgeted for and the budgeted amount for 2017 in Misc Employee Benefits in the Human Resource Department (which includes staff development) is only $35,000. That means that already 63% is spent for 2017, and we are only in April.
Alerting Council to this matter in advance highlights a potential problem. Hopefully, this memo will curb spending as more scrutiny is placed on these expenses and ultimately prevent the frivolous and abusive spending of taxpayer money. I also included a complete list of these costs for 2016 in Exhibit 9 and total for 2017 expenses as Exhibit 10. If there are any other items you would like reviewed or to inquire about you now have ready access to the information.
I also recommend that Council take a larger oversight role in travel matters that could lead to large costs. Something reasonable like council approval of all travel that is over 100 miles from the county (excluding the District Attorney, Courts, Sheriff duties for the Courts or routine travel in departments like CYF) would not be too burdensome and allow you greater oversight of the budget expenses which you approve as part of your duties under the Home Rule Charter. The 100 mile limit would not limit travel to places that county employees usual travel to for conferences and training (Philadelphia, Harrisburg, New York), but will provide oversight and an additional approval when airfare and additional taxpayer money would be required to be spent. Council may also want to consider adopting adherence to the DOD rates for travel and reimbursement.
Thank you for your diligent review of these concerns, and I would be happy to provide additional documentation if requested.