City council has overpaid staff £250k in past year
DOZENS of Birmingham City Council staff were overpaid last year, leaving the authority having to claw back nearly £250,000.
Some cases concerned people who had left the organisation but continued to be paid due to managers failing to inform payroll properly. In 2018/19 there were 30 salary overpayments worth more than £3,000 each with a combined value of nearly a quarter of a million pounds.
They typically occurred due to failures to record absence, reduction of hours worked, accumulated long-term sickness, maternity leave or contract terminations. The overpayments were revealed in the council’s annual fraud report, which said: “The circumstances surrounding each overpayment have been investigated to verify that the payments were not fraudulent and appropriate management action has been taken, particularly in respect of any code of conduct issues where it is established the employee has failed in their duty to report the fact they were being overpaid, or where managers have been negligent in their responsibilities.
“It is disappointing overpayments are still occurring on such a regular basis, particularly when they arise as a result of managers failing to input a termination date when an employee leaves, as this means payments continuing after the employee has left and requires additional resource in raising a debt to recover the overpayment.”
The report was presented to the Audit committee on Tuesday, prompting Cllr Meirion Jenkins (Cons, Sutton Mere Green) to call for the responsible managers to be penalised. He said: “If somebody forgets to tell payroll one of their staff has left let’s take the money back off the defaulting manager and I think you’ll find that compliance will swiftly improve.”
Council auditor Neil Farquharson stated recommendations were often made to directorates to take further action against managers but ‘in the vast majority of cases no action is ever taken’.
Cllr Jenkins asked whether people were obligated to repay money overpaid to them. In response Mr Farquharson said: “It’s a contractual obligation on the part of the employee to report any incident where they know they have been overpaid.
“Where we have cases where employees have been overpaid for a period of time and our investigations determine they probably didn’t know, clearly the overpayment is recovered over a longer period of time.”
The council’s corporate fraud team were notified of 109 ‘potential irregularities’ in 2018/19 relating to a range of issues but not including application-based fraud such as council tax exemption claims. Payroll/recruitment related-fraud accounted for 38 cases.