Pierce Transit gave extra paid leave to employees in violation of its own policies and had inadequate controls over its timekeeping system, the state Auditor’s Office reported Tuesday.
The Auditor’s Office said the transit agency handed out 2,025 hours of paid leave from 2009-13, in addition to regular approved vacation and sick time. The additional leave was valued at $120,615.
The underlying problem was that the elected Transit Board never created a policy that would allow the awarding of administrative leave — a problem that has now been corrected, according to Pierce Transit officials.
Most of the leave was reported as days worked when the employee wasn’t working, the report said. Each year, a total of five or six employees received the benefit.
“Pierce Transit’s award of additional leave to select employees during the last five years and the accrual of excess leave provided extra compensation that violated Pierce Transit’s policy on maximum compensation leave accruals and the state constitution,” the Auditor’s Office said.
From 2009-11, the extra leave was not reported through Pierce Transit’s electronic time reporting system, the audit said. (The transit agency responded that it didn’t have an electronic system until 2012.)
“The hours used were maintained and documented by the CEO (Lynne Griffith),” the report said. “This circumvented the controls of the timekeeping system.”
In its formal response to the audit finding, the transit system said it has awarded paid leave dating back to the year 2000. Griffith said in an email to The News Tribune that granting the paid time off was an “established practice” at the time she was hired in 2006.
“I fully believed my continuing an established practice was within my authority,” she said in the email. “But when informed otherwise, I appreciated the auditor working with me to correct the problem.”
Griffith herself receives 25 paid personal days per year under her contract approved by Pierce Transit’s board, in addition to three weeks of paid vacation. Griffith’s leave was not an issue in the audit, said Thomas Shapley, spokesman for the Auditor’s Office.
The audit release follows a volatile few years for Pierce Transit’s finances, which have attracted public attention and scrutiny.
After voters rejected a sales tax increase for the second time, Pierce Transit’s board last June approved a cut that would have slashed jobs and service hours. A month later, it rescinded the cut because the agency’s sales tax revenues rebounded beyond projections.
Awarding extra paid time off is a practice some employers use to compensate employees during tough budget times. Pierce Transit managers have generally not received cost-of-living raises since 2009.
But the practice of giving administrative leave has had a spinoff effect on Pierce Transit’s bottom line. Because they received the extra paid leave, some employees didn’t use all their regular vacation and cashed it out in some cases, Shapley said. As a result, Pierce Transit paid $43,758 in 629 “vacation buyback hours” from 2009-2012, the report said.
The elected Transit Board has not backed off its practice of granting paid leave. Last month, to conform with the audit recommendations, it approved awarding up to five days of paid leave to nonrepresented employees “upon achievement of certain outstanding specified performance goals.”
Board Chairwoman and Tacoma Mayor Marilyn Strickland said Tuesday that she doesn’t view the state audit as a challenge to the agency’s paid-leave practices.
“As stated by the auditor, the issue was the absence of a policy that gave the CEO authority to award additional paid leave,” Strickland said in an email to The News Tribune.
Under that new policy, any extra leave will be tracked by a code “in the agency’s electronic timekeeping system, have no cash value, and may not be rolled over,” according to Pierce Transit’s audit response.
The audit cited leave awarded to employees who reported directly to Griffith. It was given out in offers of employment, CEO memos, employee performance evaluations, offers of promotion and agreements for contract services.
Pierce Transit said one-half of the leave was awarded at the time employees were hired and thus did not violate the state constitution’s provision against extra compensation.
“However, the (Pierce Transit) board agrees that the time in question exceeded the leave allowed by the agency’s policies adopted in 2004,” the agency said in its audit response.
The eight-member board said Pierce Transit will revise administrative leave granted at the time employees were hired so that it does not exceed the transit agency’s policies.
Strickland said the board will likely review its policies for vacation and other paid leave this year.
The Auditor’s Office said it will follow up on the paid leave issues for the agency’s next audit, starting in March.Steve Maynard: 253-597-8647