Wednesday 17 January 2018

Civil servants owed the State at least €4.6m at end of 2016 with unreturned salary overpayments

Civil servants owed the State at least €4.6m at end of last year because of salary overpayments that had not been returned. Stock photo
Civil servants owed the State at least €4.6m at end of last year because of salary overpayments that had not been returned. Stock photo
Katherine Donnelly

Katherine Donnelly

Civil servants owed the State at least €4.6m at end of last year because of salary overpayments that had not been returned.

Many of the surplus payments arose because of the centralised payroll office was only told that an employee on sick leave was on reduced or zero pay, after a payroll was processed.

But, a probe by the public spending watchdog, also reveals a fundamental miscalculation in how absences have been recorded, which meant that some overpayments were not even on the radar.

The miscalculation is happening within the Department of Public Expenditure (DEPER).The details are set out in a report by the Comptroller and Auditor General (C&AG), on the management of salary overpayments by the National Shared Services Office (NSSO), which is a division of DEPER.

The NSSO delivers shared services, in the areas of human resources, payroll and pension, mainly for civil service departments, and, in 2016, processed payments for more than 102,000 employees.

The C&AG found that of €4.6m worth of overpayments outstanding at the end of 2016, there were no plans then in place for the recovery of €2.8m, including 388 cases, with a value of €1.1m, on the books for more than a year. 

The largest single overpayment in that category was for €38,000, which had been made in August. The remaining €1.8m represented the reducing balance in cases where recoupment plans are in place.

As well as those, there were another 648 cases where overpayments were identified, but not quantified, with an estimated overall value of €650,000, based on the average overpayment of about €1,000.

As part of its examination, the C&AG looked at a random 50 sample cases and found that late notification of a request for a payment reduction - sometimes weeks or months after it should have been made - accounted for 44pc of  overpayments.

But the report also highlights two ways in which overpayments were occurring, which were not being captured by the NSSO.It refers to changes in civil service payroll rules in 2011, at the height of the financial crisis, when DEPER instructed that deduction of pay for absences should be calculated on the basis of one-fifth of weekly pay, and not one-seventh.

It meant that staff on fortnightly salaries would have absences calculated as one-tenth of fortnightly pay, but, according to the C&AG, the NSSO payroll centre calculated deductions at the rate of one-fourteenth.

“As the rate of deduction using this method is less, an overpayment occurs each time but it is not currently recorded” the report states.According to the C&AG, the NSSO is in discussions with DEPER and “clarification of the deduction rule is being sought.”

The report also found that, while  assistant principal officers or higher grades appointed since 2011 were entitled to 30 days annual leave,  some were being allocated 32 days, resulting in a potential overpayment.

The C&AG was critical of NSSO systems on a number of  fronts, including a lack of key information to allow for effective management of salary overpayments and their inability to generate information relating to a date that has passed.

The report makes a series of recommendations, and also includes progress reports from the NSSO Accounting Officer in relation to their implementation.

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