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Hawaii Youth Prison Financial Audit Finds Excessive Overtime/Leave Abuses

A 2007 financial audit of the Hawaii Youth Correctional Facility (HYCF) found significant overtime costs and sick leave among guards, with 35 percent of gross compensation being earned through overtime pay in fiscal year 2004-2005.

Intense scrutiny of HYCF, the state?s only juvenile detention facility, prompted the Hawaii State Legislature in 2006, to request that the State Auditor conduct a financial audit of HYCF.

Auditors noted that in 1986, an HYCF audit found that its ?corrections policies and practices lacked clarity and consistency and failed to provide an adequate framework for effective program management.?
Additionally, ?Hawaii?s legislation created ambiguity in the roles and responsibilities of the three departments directly involved in providing services at? HYCF.

A May 2006 operational audit ?found that the Office of Youth Services has not provided? HYCF ?with adequate guidance and support to carry out its mission.? Additionally, ?the facility has left many critical positions vacant or temporarily filled, conducted job performance evaluations only sporadically, and has no formal or systematic training program.? See: Management Audit of the Hawaii Youth Correctional Facility,? Report No. 06-03 (May 2006).

The 2007 financial audit assessed selected fiscal issues such as sick leave, overtime, ward trust accounts, and procurement issues.

Auditors found that HYCF incurs significant overtime costs and sick leave usage among guards. During the 2004-2005 fiscal year, an average of 35 percent of guards? gross pay was earned through overtime compensation.
One guard?s base salary was $36,494, but he earned an additional $44,845 in overtime pay, for a total income of $81,339.

Additionally, auditors found that guards used an average of 164 hours of sick leave and 234 hours of compensatory time in lieu of sick leave during fiscal year 2004-2005. ?Facility personnel have indicated that they sometimes take sick leave because they ?need a break? from all the overtime,? according to the report.

Auditors determined a major cause of overtime and sick leave abuse is a high guard vacancy at HYCF. A 2007 security audit found severe and chronic staffing shortages, forcing maintenance workers to operate critical security posts normally filled by guards. See: Audit Reveals Continuing ?State of Chaos? at HYCF, (p. 16). ?As of June 30, there were 11 vacancies and seven positions that were filled by 89-day emergency hires,? according to the report. ?The high level of overtime could also lead to sick leave abuse, which is defined as taking sick leave when not actually sick.? Auditors recommended that guard vacancies be filled as soon as possible, and that HYCF ?develop and implement a formal system of monitoring overtime and sick leave usage among all employees.?

The report also faulted controls over the processing, disbursing and reporting of ward trust accounts. There was ?a lack of segregation of duties over the processing and record keeping of transactions in the wards? trust accounts and a weakness in the controls over disbursements from the wards? trust accounts,? found auditors. The report also ?noted noncompliance with the facility policy in providing wards with monthly statements of their transactions.? Auditors recommended that internal controls be reviewed and strengthened, and that wards ?be provided with a copy of a monthly statement of their account in accordance with? HYCF ?Policy #1.02.53, Section 4.4.?

Auditors also found that HYCF ?does not employ monitoring controls in the collection of salary overpayments,? and recommended that such controls be implemented and that a management level employee review all payroll records.

Finally, auditors recommended HYCF?s greater compliance with procurement laws and rules. ?19 of the 28 contracts reviewed lacked evidence of certain required approvals,? according to the report. See: ?Financial Audit of the Hawaii Youth Correctional Facility,? Report No. 07-01 (January 2007). The audit is posted on PLN?s website.

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