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Payroll, Benefits Examined at CAO

The House Inspector General is examining the Chief Administrative Officer’s payroll, benefits and finance divisions after Members complained of overdue reimbursements and high turnover.

The House Administration Committee recently asked acting IG Theresa Grafenstine to review the Payroll and Benefits Office and the Office of Financial Counseling, and IG officials have spent recent weeks interviewing CAO employees.

But committee spokesman Kyle Anderson denied that the IG’s actions constitute an “investigation.” Rather, he said, the committee asked the IG for an “advisory review” as defined by House rules.

“The Committee has requested the IG perform such an advisory review — not an investigation — into the operations of the Payroll & Benefits and Finance Office,” he said in an e-mail. “Proper stewardship of these offices is of highest importance to the Committee in performing its oversight of the CAO. This advisory will help inform that ongoing work.”

Concerns over the CAO’s financial services emerged in April, when Chiefs of Staff Association President George McElwee wrote a letter to the House Administration Committee citing communication problems with Chief Administrative Officer Dan Beard. In it, McElwee said financial and payroll counselors — who were once assigned to the same offices for an entire Congressional session — are now “arbitrarily reassigned outside of the standard end-of-Congress changes.” When a counselor is reassigned, it means staffers essentially have a new co-worker who must learn all the offices’ financial practices.

In an oversight hearing in May, Rep. Susan Davis (D-Calif.) alluded to other issues at the CAO, questioning Beard on “glitches” that “just don’t seem appropriate.” According to several sources, such problems include delayed paycheck changes, outdated online financial systems and a cumbersome reimbursement process.

But on Monday, CAO spokesman Jeff Ventura downplayed the IG’s involvement, calling the review “a routine request by our oversight Committee to examine internal processes and controls and advise on any potential improvements in these lines of business.”

“Such reviews are organic to the OIG’s mission,” he said in an e-mail, “and happen in all House Officer organizations.”

Ventura also pointed to low error rates in the CAO’s financial divisions. In Payroll and Benefits, he said, employees handle the paychecks of more than 11,000 individuals each month and maintain an error rate of 0.05 percent; in Financial Counseling, that number is less than 0.5 percent out of 250,000 reimbursement vouchers handled each year.

In January, the House Administration Committee passed stricter rules for reimbursement, such as requiring original receipts for purchases. The changes have added more layers of review for each reimbursement, but Ventura said the CAO still “exceeds industry best practices” by paying vouchers in an average of five days.

One of the issues the IG will also ostensibly look into is the CAO’s use of temporary employees to handle the payroll and benefits of House offices and committees. Currently, 15 of 43 employees in Payroll and Benefits are contractors.

Handling government payrolls and benefits can be a difficult task — and the House has its own quirks. Paychecks are monthly, for example, and Member offices have notoriously high turnover. The CAO’s payroll and benefits counselors must constantly add and delete employees from the system. Bonuses are also somewhat quirky: Rather than a one-time payout, Members might raise an employee’s salary for one month. In essence, it’s a complicated job to teach any employee, and temporary placements may only be employed for a few months.

For 2010, Ventura said, the CAO is projected to spend about $700,000 on temporary staffing throughout the CAO (and including Pay and Benefits). Such employees, he said, are used to “augment” staffing levels during special projects and busy work cycles, such as the transition to a new Congress.

“These contractors are highly specialized, skilled employees, many of whom are federal retirees who prefer contract status and who have many years of government payroll and benefits experience,” he said, adding that many full-time employees were once contractors.

As for the complaint that payroll, benefits and financial counselors are reassigned more often, Ventura said those moves are done to give employees “professional growth opportunities” and to “maximize operational efficiencies.”

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