Zurik: ‘Very high risk of payroll fraud’ at S&WB, says IG

Zurik: ‘Very high risk of payroll fraud’ at S&WB, says IG

NEW ORLEANS (WVUE) - For nearly six years, FOX 8 News has tracked sometimes unexplainable overtime by workers at the Sewerage and Water Board. We found that, since 2010, the amount paid in overtime grew to $9.7 million in 2014.

"I would say, if they operated more efficiently during the regular work day, they would probably not need as much overtime," noted one New Orleans resident in a 2015 interview.

That resident was shocked when we showed him our findings, including the 46 employees who earned more in extra pay than they did in base salary. One such worker had a base salary of $65,000, but made $100,000 in extra pay. We also found an employee who worked two straight 23-hours days, and another with a 24-hour work day.

"That is remarkable," our resident said. "I couldn't do that."

Last year, the city's inspector general released an audit, finding that there are basically no controls over overtime at S&WB. The IG also documented an employee averaging 26.5 hours on the job, every day.

"You lump these things altogether and that's what it came out to be," says Inspector General Ed Quatrevaux.

Following these investigations, the Sewerage and Water Board now wants to change its policies. But the proposed changes infuriate the inspector general.

Right now city policy puts a cap on the amount of overtime someone can earn in a year, 415 hours.  The Sewerage and Water Board wants the city council to raise it to 750 overtime hours.

"It's like me telling you, 'Lee, the bank you keep your money in has a hole in the wall and people are taking money out,' Quatrevaux says. "What are you going to do? Put more money in it?  Or it's like me saying, 'Lee, the bank you put your money in knows that there's a hole, and they've decided to enlarge the hole and line it with felt so it won't scratch the robbers so much.' This is absurd."

The Sewerage and Water Board also pays stand-by time for employees who may be called into work.  Quatrevaux says that's illegal.  So the Sewerage and Water Board is asking the city council to pass an ordinance to help legitimize it.

"You cannot give away money to employees for nothing," Quatrevaux insists. "And standby time as currently constructed has no restrictions at all on the employee. The employee could be at a Saints game; the employee could be asleep; the employee could be having dinner with friends; the employee can be drinking with his buddies.  But it doesn't matter; he still gets paid."

The Sewerage and Water Board did not respond to our request for an on camera interview.

The IG cites poor management at the agency. "When we asked them why is there so much overtime, one set of managers said, 'We don't have enough employees,' he recalls. "So we asked them, 'How many employees do you need?' And they told us, 'We don't know.'  Another manager said, 'We need more trucks, that's why we need overtime.' 'Well how many do you need?' 'Well, I don't know how many we need.' So this is some kind of shadow game or something."

The Sewerage and Water Board asked council members to pass the ordinances, writing, "to maintain our city's aged infrastructure, the board needs the time and the flexibility to utilize its workforce to protect the health, safety, and welfare of the public."

"We told them that there's a very high risk of payroll fraud at the Sewerage & Water Board," Quatrevaux says. "And after hearing those words, they decided to eliminate the controls and increase the hours. That's not the kind of response a good city manager makes."

The council has to approve both ordinances, but so far no vote has been scheduled.

It's a vote the inspector general hopes never takes place.

"This is the old New Orleans," Quatrevaux warns. "That's the way politicians and city officials used to act in New Orleans. It's the old New Orleans. We don't have time for that foolishness. There's too much money being spent at the Sewerage & Water Board to have loose controls. It's really not fair to the citizens who are paying the additional fees, not to control those resources."

The inspector general says, if the council passes the S&WB's ordinance, it will also allow for increased overtime hours by other city workers, such as the police. Quatrevaux says allowing that many overtime hours creates a safety issue for employees who, he says, could become tired on the job.

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