Implementing an effective Time and Attendance system at the Puerto Rico Department of Education
In September 2020, the Oversight Board became aware of and disclosed to the public that the Puerto Rico Department of Education (PRDE) made at least $80 million in payments over 13 years to employees who had resigned, are retired, deceased, or otherwise not working because it had not effectively implemented an automated time and attendance system that would ensure only employees who are working get paid.
The Oversight Board became aware of these incorrect payments as it continued to request more granular information about payroll spending, employee rosters, and time and attendance reports as part of its mandate to ensure fiscal responsibility and monitor implementation of the Certified Fiscal Plan for Puerto Rico.
As a result, in November 2020 the Oversight Board began working with the Department of Education, in collaboration with AAFAF and Hacienda, to implement the Time & Attendance (T&A) project. The project sought to fully implement PRDE’s T&A Policy, enforce the use of PRDE’s existing time reporting system (Kronos), and ensure that all payroll systems were automatically linked. By doing so, PRDE could ensure only active employees who worked were paid, while also directly impacting the wellbeing of public-school students – as students are unable to effectively engage in school or receive quality, consistent education without a teacher present.
The Certified Fiscal Plan requires the implementation of an effective automated time and attendance system that would prevent incorrect payments causing losses of millions of dollars each year. Starting with the pay period ending February 28, 2021, PRDE successfully launched the T&A project and implemented an effective automated time and attendance system. PRDE will now continue to enforce the T&A policy and use the automated system to ensure public funds are properly spent.
All findings will be officially validated through a forensic audit currently being conducted and expected to be completed in the coming weeks.
The Government of Puerto Rico must now focus on implementing similarly automated time and attendance projects in all Commonwealth agencies, as only then, the Government will be able to ensure that public funds allocated to payroll are properly managed, and fiscal accountability is restored, which is one of the main objectives of PROMESA.
The project has yielded significant savings and benefits to the Government, including:
Identified inactive employees to eliminate from payroll
973 employees (~2% of the total headcount) were identified as inactive but still receiving payment and included in the roster, representing approximately $27 million per year in payroll.
Reduction in time not registered
Approximately 77% reduction in the number of employees who have not registered their time and attendance between November 2020 (project initiation) and February 2021 (project launch).
Continous payroll savings
Continuous savings each pay period, as employees who do not record their time and attendance per PRDE’s T&A policy receive a payroll discount. For example, for the pay period ending May 15, 2021, 4,482 employees had time not registered, representing approximately $1.6 million in payroll reductions.