RALEIGH — A dozen state Health and Human Services employees who don’t normally qualify for overtime pay made an extra $580,000 in overtime over four years without written authorization, according to a state audit released Thursday.
Most of the overtime went to managers and executive-level job-holders working on the new Medicaid billing system.
More than 40 percent, $237,500, went to the Medicaid Management Information System Director Angie Sligh The audit did not identify employees by name. Only Sligh was identifiable because her position was singled out in the audit.
The audit did not say how many overtime hours were paid to individuals, but nine managers, including Sligh, took more than $510,000 in extra pay, and three staff people were paid a total of $70,523 extra.
Employees needed to work overtime to meet deadlines for the Medicaid billing system project, according to a draft policy the state Department of Health and Human Services gave the state personnel office in 2008.
The system, which was supposed to be working in mid-2011, is two years behind schedule and over budget. This is one of several state audits in the last two years critical of DHHS computer systems and their management.
Rep. Justin Burr, an Albemarle Republican who has criticized the delays and spending, said workers shouldn’t have received the extra pay.
“I don’t think there is justification for the overtime,” Burr said.
The audit found no written approval from the Office of State Personnel that allowed the employees to get the extra pay.
DHHS manually calculated the overtime pay and leave for the 12 employees because the state’s automated payroll system could not track it.
According to the audit, former state Personnel Director Thomas Wright, who worked under former Gov. Mike Easley, remembers verbally approving a plan for overtime, based on a DHHS 2008 draft policy that said the billing system was “time-sensitive and requires many extra staff hours in order to meet various deadlines.” Part of the justification was that the federal government would pay 90 percent of the cost, and the finished project would save the state $1.2 million a month.
State Auditor Beth Wood said the Office of State Personnel didn’t track whether the state was getting its money’s worth. The state personnel directors who succeeded Wright didn’t know about the overtime agreement, the audit said.
“The deadline has already been missed,” Wood said. “The results intended to be accomplished with this overtime were not met. The bottom line is there was no management oversight to make sure this stuff doesn’t happen.”
Wright did not return a telephone call. The overtime, which was for straight time rather than time-and-a-half, ended last month.
DHHS spokeswoman Julie Henry said that former DHHS assistant secretary Dan Stewart told legislators last year that the decision was made to pay overtime rather than let employees accrue hundreds of hours of comp time to take when the project was finished.
Wood said the Office of State Personnel should have documented the overtime approval and included an expiration date.
DHHS officials say the billing system will be ready July 1, about two years behind schedule.
The contract with Computer Sciences Corp. to develop the system ballooned to $196.6 million from the original $90.8 million. The five-year, $196.4 million agreement to run the system was extended two years for an extra $91.8 million.
Sligh’s office referred questions to the Health and Human Services public information office. As of Jan. 11, her annual salary was $107,944.
In a prepared statement, DHHS Secretary Aldona Wos thanked Wood for her work.
“We take these findings very seriously and have already taken steps to ensure improved accountability within the department,” the statement said.
The new billing system has a long history of setbacks, including a period of about three years where the state did not have a company building a new system.. In 2006, the state ended its contract with one vendor after a dispute.
In December 2008, it signed a contract with Computer Sciences Corp.
It is unclear why employees needed overtime in 2008, when the state did not have an active contract with a new billing system vendor for most of that year.