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December 24, 2008

DiNapoli’s Audit Finds Employee Overpayments
at SUNY Downstate Medical Center

The State University of New York’s (SUNY) Downstate Medical Center allowed 118 current and former employees to collect salary payments totaling $490,257 to which they were not entitled because of poor controls over its payroll system, according to an audit by State Comptroller Thomas P. DiNapoli.

“Downstate Medical Center needs to make significant improvements to its payroll system,” DiNapoli said. “The state is facing massive budget gaps. We have to keep a close eye on every taxpayer dime, and $490,000 is a lot of dimes. The medical center needs to impose some fiscal discipline, and stopping paychecks to former employees and employees on unpaid leave is a good place to start.”

DiNapoli’s auditors found that Downstate officials allowed between nine and 253 days to elapse between the required paperwork submission date and the date Human Resources received the documentation. Some employees continued to be paid for as long as three months. The delays resulted from a lack of basic monitoring, inadequate procedures for processing changes and poor supervision at the work unit level.

Auditors found the medical center’s efforts to recover the overpayments, which took place between April 5, 2006 and March 8, 2007, were mixed. In an examination of 15 cases, full recoveries were made in six and partial recoveries were made in seven others. Downstate did not refer cases to the Attorney General’s Office for collection from two employees who made no restitution.

Of the 15 individuals examined, four had been terminated, six were on leave and five were still active employees. In one case, the employee was on leave without pay for 33 days and received an overpayment of $9,255 before the paperwork was submitted to stop the person’s paycheck. After the employee resigned, officials again failed to submit the paperwork in a timely manner, leading to another $27,485 in overpayments.

The audit recommends the medical center:

  • develop written policies and procedures for processing payroll changes;
  • develop detective controls such as time sheet tracking;
  • immediately notify all employees of an overpayment and send out repayment requests to overpayment recipients; and
  • develop a formal way of tracking overpayment actions

SUNY officials agreed with the audit’s findings and have begun taking steps to implement its recommendations.

Click here for a copy of the audit.


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